Climate change will hurt globalisation
11 June 2016 12:03 pm
The world has been feeling the impact of climate change.
Australia's east coast is recovering from last weekend’s wild winds, waves and flooding, caused by a weather pattern known as an east coast low. Climate change didn’t exactly cause the storms but no-one can say it didn’t have an influence. For example, what is the impact of higher sea levels on storm surges? And how much have record warm sea temperatures contributed to rainfall and storm intensity? Sadly, several people died in the flooding and the insurance payouts will be in massive.
According to a recent report, natural disasters are creating billions of dollars of damages around the world.
The historic wildfire which caused catastrophic damage in the Canadian city of Fort McMurray throughout the month of May. The fire charred more than 580,000 hectares of land and destroyed at least 10 percent of Fort McMurray, including more than 2400 homes and other structures. Total economic damages will be well into the billions of dollars (USD). Insured losses including physical damage and business interruption were anticipated to be in excess of $C4 billion. This will be the costliest natural disaster in Canada’s history.
Convective storms and widespread flooding from a storm dubbed “Elvira” swept across parts of northern Europe between late May and early June, killing at least 17 people. The most considerable damage was noted in Germany, France, Austria, Poland and Belgium where floods impacted many major metropolitan regions – including Paris. Insurance industry associations in France and Germany preliminarily estimated combined minimum claims payouts to exceed 2 billion Euros. Tentative overall economic damage was estimated to approach 4 billion Euros.
No fewer than five outbreaks of severe convective storms impacted the United States during May. Parts of the Plains, Midwest, and Mississippi Valley were impacted by damaging tornadoes, straight-line winds, and large hail. Storm
-related flooding also caused major damage in portions of Texas during the latter part of the month. Total aggregated insured losses were estimated to exceed $US1 billion.
Severe weather events also impacted China, Myanmar, Bangladesh, and India in May.
All this has to affect globalisation. Manufacturing these days involves facilities in multiple countries. Each country has a sequential role in taking raw materials a step closer to being finished product.
But new research from the Potsdam Institute for Climate Impact Research tells us that global manufacturing is only as strong as the weakest link in the supply chain.
The study identified massive losses from heat stress–induced reductions in productivity under changing economic and climatic conditions between 1991 and 2011.
And that will affect the global economy and businesses around the world.