Will Climate Change Affect The Economy?

The start of the new decade marks the start of a new era as climate change causes disruption in all areas of the economy. And such disruption will continue as we are forced to think differently about how we live.

A new agenda

Climate change will dominate the agenda for the next decade, as governments come to terms with the impact of taking and not taking action. The damage inflicted on the planet will be felt as people struggle with the day-to-day consequences of more regular and severe weather events. One significant outcome is already evident as the migration of people from all parts of the world takes place. And as the world’s population climbs to eight billion the number of refugees will spiral as water and habitable land trigger conflict and, at times, war.

Climate change will force governments to make unpopular decisions, as national and international actions are taken to mitigate the damage. And there is plenty of support for those who deny the negative effects, as commercial interests lobby to stifle any meaningful progress. The difficulty faced by those who support the climate change agenda is that they threaten a commercial model based on a lucrative carbon driven economy, which is desperately protected by a whole range of special interest parties. And opposition to climate change will intensify, as politics moves to the right supported by well-funded pressure groups. The real battle of course will be fought at the ballot box through local and national elections and the outworking of the democratic process. But it will not be a repeat of traditional elections, as social media campaigns financed by a variety of actors influence outcomes in every country around the world.

Growing inequality

The negative impact of climate change is also creating a divided and unequal society. Differences between rich and poor have reached unsustainable levels, as the economy rewards those at the top while punishing those on the fringes who struggle to make a modest living. The effect of such inequality is worrying as those who succeed gain tremendous wealth and garner greater levels of influence on the decision-making process and the distribution of the tax burden. They also possess sufficient resources to protect against the worst effects while others have no choice but to suffer the consequences of decisions made without their voice. And such entrenched pockets of advantage are passed between generations, which further embeds disadvantage amongst those left behind. Not least, because they are excluded from a system that disproportionately rewards those at the top.

So, the hope of a new decade is tempered by the reality of climate change, as it starts to have a profound and long-term effect on how we live.