Exploring the Economic Impacts of Climate Change in Europe.

Introduction

Climate change is the world’s leading global issue, which has affected all sectors of life, including the economic sectors. The world climate is changing rapidly, mainly due to the increase in human activities through exploitation to make desired changes in investment. All countries globally have felt the impact of climate change, and Europe is not immune to it. Increased temperatures, extreme weather events and the change in precipitation patterns characterise this. These factors have significantly affected the European economy, and more impact is expected. The European economy is affected by climate change, negatively impacting the agricultural, tourism, manufacturing, and energy sectors. With increased effects, the challenges of climate change manifest in the European economy through increased costs, a change in the supply chain and a reduction in productivity. This essay will investigate the economic consequences of climate change, particularly in Europe. The main objective of this research is to assess the challenges and opportunities presented by climate change in the European economy. The research aims to answer the impacts of climate change in Europe.

Literature review.

Climate change poses complex economic impacts in European countries, cutting across different sectors. In the agricultural sector, the study by Menzel et al. (2020) examined the impacts of climate change on plants in Europe. The study holds a noticeable change in the planting patterns due to the increasing change in the temperature and the shift in the rainfall. The agricultural sector has reduced crop yield because they don’t get adequate nutrients in the poor climate (Menzel et al., 2020, p.1). Besides, inadequate feeds for livestock and droughts have attracted increased mortality cases. This eventually disrupts the agricultural supply chain, causing a food shortage and raising prices. This affects mainly low-income families and also destabilises the national economy.

In the energy sector, climate change has negative impacts as well. The increasing demand for energy due to the increased population affects the climate negatively. Solaun and Cerda’s (2019) research claims that producing non-renewable energy in the environment is the main contributor to the carbon gas in the atmosphere, contributing to climate change. Even though the world’s solution to climate change targets 2⁰C, more effort should be made to ensure the remedy to climate change is found by minimising the production of renewable energy (Solaun and Cerda, 2019, p.1). The increased demand for energy in European countries has led to a change in the heating patterns, thus affecting the residents. Besides, it increases society’s cooling needs due to high temperatures. The extreme weather events in the European regions disrupt energy production and change the energy infrastructure.

The tourism industry is also affected by climate change. The tourism sector is among the country’s income sources; however, the change in weather patterns affects the number of tourists visiting Europe. Studies by Scott et al. (2019) assert that regions vulnerable to climate change should be given attention because it affects tourists visiting the sites of their interest. Regions benefit differently from the tourists’ visits during the longer summer seasons and the milder winter. However, some regions might experience a different season than others due to extreme weather events and heat stress, which might keep tourists from visiting. Tourism has become part of the salient agenda in advancing the climate agenda, considering tourism is one of the promising sectors supporting the nation’s economy (Scott et al., 2019, p.50). Failure to mitigate climate change effects in Europe contributes to the decline in the economy.

Methodology

The research used a mixed approach in analysing the economic impacts of climate change in Europe. It used the systematic review of past publications with economic and climate data content. This data analysed the physical effects of climate change in Europe and also quantified the economic impact of climate change on different sectors that contribute to the economy. It also used a case study from Germany to demonstrate the impacts of climate change on various areas in Europe in given sectors of the economy. The findings were analysed, and the results will be discussed.

Results

Extreme weather events occur in Europe and manifest through heat waves, floods, and wildfires. Also, some regions experience drought due to poor agricultural produce due to changes in the weather pattern. This causes damage to the properties, affects farming, and impacts infrastructure. Also, the change in the precipitation pattern attracts droughts in the region. Besides, in some places, it leads to floods, which cause massive displacement of people, injuries and death. This affects the agricultural practices in the region and impacts hydropower generation. The change in the sea level is a threat to the coastal residents in Europe and also impacts the infrastructure. This contributes to the increased soil erosion in the land and, therefore, attracts flooding.

Climate change dramatically affects the agricultural sector in the European economy. Failure to produce enough food due to unfavourable weather leads to droughts in the community. Besides, the food shortage increases prices, which makes life expensive. In the manufacturing industry, with the increased climate change, the country will have a high cost of production in manufacturing products. Therefore, it would lead to increased energy costs and the destruction of the infrastructure. Eventually, the manufacturing supply chain will be affected and thus affect the nation’s economic stability. Tourism is another sector that impacts the economy with climate change. The areas that experience heat stress and high temperatures due to the change in the weather might scare tourists away from visiting the site due to the atmosphere, which could subject them to more health complications. Also, extreme weather events cause some areas to experience water scarcity, thus affecting the region’s normal operation on activities that demand enough water to stabilise the economy. Due to climate change, energy has yet to contribute to the economy as expected. The increased climate change has disrupted average energy production due to insufficient resources (Alola et al., 2019, 704). As a result, it has led to high energy prices, which some households can afford. Besides, some regions have experienced blackouts due to insufficient energy supply.

The European economy can focus on potential opportunities, such as investing in renewable energy. Europe is advanced, and they should look for enough resources to help sustain renewable energy in different places. This will reduce energy costs, improve the atmosphere, and keep the air free from greenhouse gases. Improving energy efficiency is an opportunity that helps minimise energy consumption and limits the greenhouse gases emitted into the air (Giannakis and Zittis, 2021, p.622). This will have a long-term impact on the economy and ensure the next generation will not have more economic dangers due to climate change. Investing in green infrastructure is essential. This means harvesting rainwater and using green roofing to conserve the environment.

Consider the carbon pricing strategy to mitigate these climate changes in the European economy. Most European countries have used the carbon tax strategy and the emission trading scheme to reduce the carbon emitted into the atmosphere (Fawzy et al., 2020, p.2071). The tax imposed on the investors discourages them from using carbon and thus goes for technology with less carbon. Also, employ the subsidies on renewable energy. This subsidy makes renewable energy more affordable to users and is given a top priority over fossil fuels. Having regulations that deal with energy efficiency is essential. European countries have considered these regulations purposely to minimise energy consumption and also reduce greenhouse gas emissions.

In the case study, Germany is known as the climate change champion. It’s among the world’s leading countries promoting a green environment and using renewable energy. It has earned a positive reputation for supporting climate change in Europe and the world. The country has designed strategies and measures to minimise greenhouse gas emissions in the atmosphere to conserve the environment. Generally, Germany has served as a role model in the mitigation of the effects of climate change.

Discussion

From the results, it is clear that climate change has become a threat to the world economy, especially in the European countries. The most commonly affected sectors in the economy are the agricultural sector, which lacks enough rainfall due to deforestation and the change in the weather pattern (Santos et al., 2020, p.6). When there is inadequate food production, it leads to food shortage and drought, in which a country is forced to import and sell food products at higher prices. Besides, the tourism and energy industries are affected as well. In this aspect, when the weather pattern has more extreme events, it shuts down tourist activities. The non-renewable energy in Europe has contributed to greenhouse gases, which trigger health complications from the inhaled greenhouse gases in the air. Designing effective strategies to mitigate the effects of climate change with approaches such as carbon taxes and energy efficiency will have a lasting solution to the European economy.

Conclusion

Climate change has many challenges connected to extreme weather events, rising temperatures and precipitation patterns. Europe’s economic cost of climate change is billions of euros every year. However, it is expected to increase unless a solution is found to manage climate change. The European nations have designed strategies to deal with the climatic conditions that affect the entire economy. However, more should be done to cater to future generations affected by climate change. The country’s economic stability will depend on how well they are prepared to deal with the climate change issue and ensure all sectors contributing to the economy are moving swiftly.

Reference list

Alola, AA, Bekun, FV & Sarkodie, SA 2019, ‘Dynamic impact of trade policy, economic growth, fertility rate, renewable and non-renewable energy consumption on the ecological footprint in Europe’, Science of The Total Environment, vol. 685, pp. 702–709. https://doi.org/10.1016/j.scitotenv.2019.05.139.

Fawzy, S., Osman, A.I., Doran, J. and Rooney, D.W., 2020. Strategies for mitigation of climate change: a review. Environmental Chemistry Letters, 18, pp.2069-2094. https://link.springer.com/article/10.1007/s10311-020-01059-w.

Menzel, A, Yuan, Y, Matiu, M, Sparks, T, Scheifinger, H, Gehrig, R & Estrella, N 2020, ‘Climate change fingerprints in recent European plant phenology’, Global Change Biology, vol. 26, no. 4, pp. 2599–2612. https://doi.org/10.1111/gcb.15000.

Santos, JA, Fraga, H, Malheiro, AC, Moutinho-Pereira, J, Dinis, L-T, Correia, C, Moriondo, M, Leolini, L, Dibari, C, Costafreda-Aumedes, S, Kartschall, T, Menz, C, Molitor, D, Junk, J, Beyer, M & Schultz, HR 2020, ‘A Review of the Potential Climate Change Impacts and Adaptation Options for European Viticulture’, Applied Sciences, vol. 10, no. 9, p. 3092. https://doi.org/10.3390/app10093092.

Scott, D, Hall, CM & Gössling, S 2019, ‘Global tourism vulnerability to climate change’, Annals of Tourism Research, vol. 77, no. 77, pp. 49–61. https://doi.org/10.1016/j.annals.2019.05.007.

Solaun, K & Cerdá, E 2019, ‘Climate change impacts renewable energy generation. A review of quantitative projections’, Renewable and Sustainable Energy Reviews, vol. 116, no. 116, p. 109415. https://doi.org/10.1016/j.rser.2019.109415.

Giannakis, E. and Zittis, G., 2021. Assessing the economic structure, climate change and decarbonisation in Europe. Earth systems and environment, 5, pp.621-633. https://doi.org/10.1007/s41748-021-00232-7.

Gallego-Schmid, A., Chen, H.M., Sharmina, M. and Mendoza, J.M.F., 2020. Links between circular economy and climate change mitigation in the built environment. Journal of Cleaner Production, 260, p.121115. https://doi.org/10.1016/j.jclepro.2020.121115