Global Warming and a Major Impact on Businesses - Essay Example

?Global Warming Challenges to Governments and Business Introduction Global warming is one of the major concerns for most governments and environmentalists at present. Scientists are already pointing out that we are experiencing the effects of climate change in the form of our extreme weather conditions, our overall warmer temperature, and the increase in the frequency and intensity of our storms and typhoons. The impact of global warming is also apparent in our businesses and our government systems. This paper shall discuss and consider such effects and the challenges which governments and businesses face with the impact of global warming. Discussion Based on a report by Sir Nicholas Stern, a former World Bank economist, global warming may reduce the world’s annual economic output by as much as 20% (as cited by BBC News, 2006). Lord Stern further pointed out that the increasing levels of carbon dioxide and other toxic chemicals into our atmosphere seems to represent a ‘business-as-usual’ attitude which does not bode well for our environment. He calculates that every ton of carbon dioxide released into the atmosphere implies a $30 charge for the social cost and if not stopped, about 1-2% of our global GDP per year would be reduced. Our industries would also have to suffer the higher cost of climate change through adjustments in their carbon emissions (Meister, 2008). The tourist industry would also likely be impacted by global warming because businesses would incur losses or closures caused by waves, hurricanes, floods, and storms. These weather disturbances would likely reduce “international outbound and inbound tourist traffic” (Meister, 2008). Many heritage sites which are top tourist draws are also often damaged by these weather disturbances. In the end, these areas will lose their attractiveness; and as a result fewer tourists would visit these places (Meister, 2008). The challenge for the tourist industry would now be on how to stay economically viable despite global warming conditions. This would likely prompt these businesses to either find alternative sources of business or to help maintain such tourist spots and prevent them from deteriorating. The areas which would likely be impacted significantly by the global warming phenomenon are the third world nations like Bangladesh and areas like Mumbai in India and Indonesia; these areas have low coastlines and would likely be affected the most by global warming (Webber, 2002). The floods caused by monsoon rains as well as the droughts in some parts of the world are just some of the occurrences which are likely to be seen with more frequency in the coming years. The challenge for businesses in these areas would be on how to stay afloat amidst these weather disturbances which may destroy their crops and disrupt their supply chains. Insurers have a major share in companies, including those in the oil industry. The challenge for them is on the pressure they can exert on these companies in order to prompt them to recover their losses amidst natural disasters and also how these insurance companies can still gain profits (Webber, 2002). The challenge for businesses is on the switch to fuels which they have to implement in order to help reduce the emissions of toxic chemicals. The challenge is for them to use alternative sources of fuel which would create less greenhouse gases. Fuel switching would be a costly venture for most businesses because these sources of fuel are limited sources and would require more than the usual processing (Webber, 2002). Moreover, these alternative sources of fuel would cost millions to structure in to the industries. In the end, these financial costs are often passed to the consumers – consumers who are already undergoing various economic difficulties in recent years. Economists also point out that for companies who are located in areas which are often visited by droughts or floods, insurance companies may eventually find them uninsurable (Hagen, 2007). Many farmers would also likely invest in new areas which may be more agriculturally viable for them and to abandon the areas which are too warm or too flooded. In effect, some areas which made their living off of farming produce would likely lose the profits which they used to enjoy. Industries and companies would also experience changes in the demands for their products (Hagen, 2007). A higher demand for pharmaceutical products for diseases seen in tropical zones would be seen; such demands would cover other areas as well. Higher demands for energy efficient appliances and for vehicles, machines and equipment which use alternative sources of energy would also be seen (Hagen, 2007). The challenge for companies would be on how to fill these demands and how to ensure that the corporations would still profit from these changes in demands. These businesses would be faced with the challenge of facing and managing risks in their operations. Whereas before, they only made risk plans and contingencies for the usual business risks; they are now prompted to make contingencies for risks in relation to changes in weather patterns and similar occurrences (Hagen, 2007). It is therefore important for businesses to be as updated as possible in terms of weather forecasts, climate projection, and weather patterns, as well as access to research in order to ensure enough time between the calamity or risk and the emergency response (Hagen, 2007). Global warming also poses a challenge to government agencies and authorities to impose regulations for the control and management of greenhouse gases in the form of higher taxes for fossil fuels (Hagen, 2007). The government is also faced with the challenge of imposing such regulations for vehicles and buildings in order to promote efficient consumption. As the highest authority in most countries, the government also has the added pressure of setting forth regulations for its territories in order to ensure that adequate and appropriate regulations are available for the protection of our environment. The challenge is for the government to strictly impose such regulations in order to ensure that the standards which help protect the environment are followed by the industries which pose a danger to the environment. Globally concerted efforts to manage the issue of global warming have been set forth by the United Nations and other international organizations. The Kyoto Protocol or the United Nations Climate Change Conference is the main channel by which the different members of the UN have come together in order to manage the emission of greenhouse gases (Gourley, 2007). A meeting in 2006 was conducted with 6000 delegates from 180 nations attending. The US has not ratified this treaty as yet. However, the UN has taken important steps in order to address the issue of global warming through the management of emissions reductions and global cooperation in order to manage climate change (Gourley, 2007). These policies have included the Emissions Trading, Joint Implementation, and Clean Development Mechanism. These policies have been implemented in some developing and developed states. Moreover, Australia, India, Japan, China, and South Korea have formed partnerships with the Asia Pacific Partnership in order to minimize the promotion of technologies which help support a clean environment (Gourley, 2007). The challenge for the government is on the establishment of bonds and regional cooperation groups with other nations in order to help increase the efficacy of their pollution reduction activities. Yearly economic and political summits for the Group of 8 (Canada, France, Germany, Italy, Japan, Russia, the UK, and the US are being carried out in order to discuss joint economic development, poverty management, delivery of modern energy services, and protection of local and global environmental quality (Gourley, 2007). These meetings help ensure that the most powerful and economically viable nations in the world are discussing means by which to address the major issues which are plaguing the world in general. The challenge for these governments is on how to conceptualize policies on global warming which can be implemented outside their boundaries. Other poorer nations would not be able to afford the adjustments to their industries which have to be carried out in order to manage global warming. The challenge is for these countries to come up with policies which can be implemented on a global scale and can be afforded by other countries as well. Conclusion Global warming has a major impact on businesses mostly because of the loss of profit it represents for most corporations. As climate change also causes extreme weather conditions and lead to devastating weather disturbances, the frequency of droughts and floods, as well as storms would likely increase. These weather disturbances would impact on tourism activities, farming, and similar business enterprises. The challenge for most businesses is on how to comply with the different standards for environmental protection. Their challenge is also on how to stay afloat despite the fact that they would likely be losing much of their profits to these environmental disasters. For government authorities, the challenge imposed upon them is on the policies they are meant to impose on businesses and industries in order to minimize the impact of global warming. Their challenge is also on how to strictly impose these policies in order to adequately regulate the conduct of businesses and to eventually ensure that these businesses would not exacerbate the global warming issue. Works Cited Gourley, B. (2007). Government Policies. Climate Change. Retrieved 10 March 2011 from http://climatechange.ws/government/ Hagen, K. (2007). How Global Warming Affects Your Business Strategy: Changes, Risks, and Opportunities. Associated Content. Retrieved 10 March 2011 from http://www.associatedcontent.com/article/493635/how_global_warming_affects_your_business_pg4.html?cat=3 Meister, J. (2008). Lord Nicholas Stern Calls for Action on Climate and Development in Third Annual Sabot Lecture. Center for Global Development. Retrieved 10 March 2011 from http://blogs.cgdev.org/globaldevelopment/2008/06/lord-nicholas-stern-calls-for.php Webber, M. (2002). The economic impact of global warming. BBC News. Retrieved 10 March 2011 from http://news.bbc.co.uk/2/hi/business/2327795.stm Read More