Impact of Climate Change on the Economy:A Review

Hadija Afiya J.M.

Department of Public Administration Kampala International University Uganda

ABSTRACT

In most developing countries, the impact of climate change is of great importance given the high temperature level, poor adaptation capacity, and lack of early warning system. Apart from the above, climate change affects economies whose economic activities are natural resource sensitive such as agricultural activities. Climate change will have an impact on the global economy; hence, this paper attempted to understand these impacts. Consequently, data indicates that, more extreme weather has the potential to weaken economic growth through damage to the capital stock and labor supply, and labor productivity will weaken as the world economy adjusts to higher temperatures. Similarly, inflation will rise through the growing cost of food, energy and insurance, just as monetary policy will be limited as it attempts to combat the stag factionary pressures of climate change. The general consensus, which is supported by a growing amount of evidence, suggests that economies should act sooner rather than later to avoid potential future costs. Successful mitigation policies will necessitate actions from all parties thus, this paper concluded that recognizing that quantifying the impact of climate change on shareholder’s investments is critical in creating an incentive to act, will enable stakeholders incorporate climate change effects into an extended long-run return forecast for different asset classes.

Keywords: Climate change, Economy, Impact, Labour supply, Stakeholders

CITE AS: Hadija Afiya J. M. (2024). Impact of Climate Change on the Economy: A Review. RESEARCH INVENTION JOURNAL OF CURRENT ISSUES IN ARTS AND MANAGEMENT 3(1):7-12.