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Climate change's impact on inflation and energy: A global perspective

Sep 18,2023 - Last updated at Sep 18,2023

Climate change presents an intriguing narrative because it was not a primary concern for humans until a few years ago. However, it has now become the focal point of attention for both elites and the general population. Before this shift, the common understanding of climate change was limited to notions of the ozone hole and its consequences for humans, the planet, the environment and the climate. Over the time, information about climate change has substantially grown, particularly in the Western world, including the United States of America and Europe. Interest in climate change has gradually expanded worldwide, even reaching the Middle East, though to a limited extent and without significant awareness among the general population. What has transpired in recent years is that the effects of climate change are no longer distant projections for the future. Instead, people in various nations now experience them as tangible realities. Essentially, the discourse and concern surrounding climate change have shifted from the realms of the elite and scientific communities to the everyday lives of ordinary people. This shift directly results from climate change's tangible impact on the rising costs of goods and people's livelihoods.

Climate change has manifested its effects across all continents, providing numerous examples of its impact. In the Middle East, Iraq, historically known for its abundant water resources, has experienced the consequences of climate change, including prolonged droughts. A striking image emerged months ago, depicting people crossing the Tigris River on foot, which indicates that the river or some of its banks dry up during certain periods of the year. Studies have even predicted that Iraq will become a country devoid of rivers by 2040, implying the drying up of the Tigris and Euphrates rivers. North African countries have also grappled with severe water scarcity and soaring temperatures. The shrinking of Lake Chad has had devastating effects on the surrounding African nations, leaving millions of citizens without livelihoods and plunging them into poverty.

In the past two years, even Europe has experienced the impacts of climate change on an unprecedented scale, with extreme heat waves, severe droughts and major floods occurring at a frequency unseen for decades, or even centuries. These events have also exposed remnants of weaponry, equipment and ships from the World War II.

The United States has not been exempt from the ravages of climate change. It has faced significant climate-related resulting in enormous financial losses estimated in the billions of dollars. Florida, one of the states most vulnerable to floods and hurricanes, suffered from Hurricane Ian, leading to extensive property and real estate destruction. Insurance costs skyrocketed to three times the rates in other states, causing six insurance companies to go bankrupt as they were unable to cover unexpected losses that were not accounted for in their feasibility studies.

Climate change has contributed to the exacerbation of inflation caused by the COVID-19 pandemic, particularly through its impact on the energy crisis. Droughts, floods and global warming in various parts of the world have disrupted numerous energy sources. For example, changes in wind patterns have led to decreased wind-generated electricity in certain regions. Additionally, drying rivers have reduced water-generated electricity, and high temperatures have affected nuclear power plants, as evidenced in France.

The rise in temperatures has also adversely affected crop production. For instance, coffee has experienced significant damage in exporting countries like Brazil due to elevated temperatures. Consequently, the supply of coffee has decreased, leading to a price increase of over 50 per cent.

In summary, climate change has transitioned from a concern confined to scientists and politicians to an immediate threat recognized by the general public in countries worldwide. Its effects have become tangible, impacting various regions and prompting a growing sense of urgency to address this global challenge.

 

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