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It’s no secret that life is getting more expensive, and it turns out the climate crisis has a worrying role in the rise of prices around the world.
As Ken Gillingham writes for the International Monetary Fund, “While the extent of the economic damage cannot be known for certain, strong evidence suggests it could be quite severe.”
The Further statements by the IMF that “climate change has potential to do significant economic harm, and poses worrying tail risks”.
Here’s what climate change could mean for you.
Delicious food at the table
Food This is a key resource that climate changes are affecting. Crops and Livestock Heat stress, which is the increase in temperature that occurs when there are more people than usual, can have a negative impact on both of these.
Heat stress has an impact on yield and Quality of meat and dairy productsA lack of water can cause dehydration. diminish grazingLand for livestock and lower yields of crops.
It also affects the quality of fruits, vegetables, and other crops. TasteTexture andNutritional composition
Ocean acidification,Excessive carbon dioxide emissions that are absorbed into the seas, disintegrates shells shellfish,Fishes are also at risk from damage to reefs and marine plants.
Even coffeeThis industry, which employs more than 100 million people in 80 different countries, is under threat.
The Extreme weather eventsThis happens more often as a result of Climate change Along with heat stress, they also affect the labour productivity of farmers, making them work fewer hours.
A Study by Frontiers On farm workers and climate change identified farmers as a particularly vulnerable population who are at increased risk of developing health conditions from rising global temperature.
“Climate events could trigger harvest failure in multiple breadbasket locations”, leading to rising food prices, according to a McKinsey & Co. report The socioeconomic effects of climate change.
Extreme weather events can also slow down supply chains and make logistics more difficult. Supply chains are disrupted when product yields fall and demand rises. Consumers will feel the pinch as prices rise and are subject to increased pressure.
The clothes on the backs
The fashion industry expects an average of 5% growth this year. Price Increase of 3% caused by material shortages and shipping costs – and climate change could make clothing even more expensive.
Fashion is another sector that relies heavily on agriculture. Just like food, the climate crisis is threatening apparel crops such cotton.
Its State of Fashion report 2022McKinsey warns that all stages of the apparel supply chains are at risk from climate changes.
The effects of heat stress on cotton farmers and decreases in water supply are both detrimental to cotton’s viability. 2020 McKinsey estimated that India, which produces around 24% of the world’s cotton, “could become one of the first places in the world to experience heat waves” that humans cannot survive.
“Moreover, rising heat and humidity levels will impact labour productivity and economic growth in an economy that relies substantially on outdoor work.”
From India, cotton is transported to Southeast Asia’s manufacturing plants. These plants are located in Bangladesh and Vietnam, which are under threat from flooding. Extreme weather eventsClimate change has caused these changes.
“This could significantly disrupt fashion supply chains and affect business continuity, not to mention raise the volatility of demand in these key consumer markets,” McKinsey’sFashion in the PresentReport findings.
Not only is fashion affected by climate change, but it’s also a significant contributor to the climate crisis – in 2018, the industry produced 2.1 billion tonnes of GHG emissions (4% of the global total) and the equivalent to the combined GHG emissions of France, Germany and the United Kingdom annually, McKinsey.
Fashion must take decisive actions to reduce its environmental impact in order to be both sustainable for consumers and the environment. If this is not done, prices will continue climbing, the climate crisis continues to worsen, and shoppers will be bearing the consequences.
Your future is secure
Insurance companies know that extreme weather events, such as floods or storms, are becoming more dangerous every day.
In 2019, IMF foresaw rising insurance costs as a result of the climate crisis, saying that policies are “likely to become more expensive or even unavailable in at-risk areas of the world”.
A Deloitte report states that “with losses mounting, insurers can no longer avoid or postpone addressing the impact of changing climate on their underwriting, pricing, and investment decisions, as well as their bottom lines” as “losses linked directly or indirectly to climate-related risks are likely to keep increasing”.
These events are more likely to occur as a result climate change. Insurance companies will likely to be able to offer insurance. Their prices should be raisedDepending on how at-risk an asset may be.
Even if insurance is not available, the costs of repairing extreme weather damage will increase as more homes are exposed to the effects of climate changes.
Deloitte was also involved.The climate crisis will lead to an increase in healthcare and insurance costs.
“The changes to the physical environment are expected to increase the total cost of healthcare services and delivery borne by the economy,” the report says.
“The financial cost of climate-related health conditions and illnesses will drive up the total cost of care, thereby dragging down the bottom lines of both health systems and health plans alike.”
Keep the lights on
South Africa’s load shedding woes are keenly felt throughout the country, but the climate crisis is forcing the world to consider the consequences of coal-generated energy.
If SA continuesInvest in coal-based power taxpayers would likely foot the bill as new investments into this form of power generation to meet the nation’s demands beyond 2030 “would incur additional costs of at least R23-billion or a 0.5% increase in the electricity price”, the Energy Systems Research Group discovered.
As the climate crisis continues, households are likely to spend more on cooling their homes. In fact, households that have air conditioning spend more than they used to. Electricity: Up to 35%-42% than homes that don’t have it.
One study in AmericaThe study found that Americans are likely to use more electricity for air conditioning and spend more on power. Another study in ChinaIt is stated that households will need to adapt their income and energy consumption so that cooling appliances are used more often.
It is evident that products such as food, clothing, and electricity are becoming more expensive due to many factors, not just the climate crisis.
However, costs will only continue to spiral as the climate change continues to accelerate and if it isn’t slowed down, time will tell. DM/ML/OBP
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