Climate change, poverty and world economy

Introduction

There are now more environmental disasters than there were a few years back. For example, flooding affects many areas and leads to the destruction of life, livelihoods and valuable property. Each natural disaster caused by significant climate change drives some developing countries closer to poverty. The cumulative impact of environmental disasters caused by drastic changes in climate drags the global economy down, inhibiting its growth.

The world needs to understand the growing influence that climate change can have in regional and global economies. Understanding how a single climate-triggered event such as flooding can drag economics is crucial towards mapping out a strategy to negate such massive outcomes. This article connects the dot from environmental degradation and poverty to the growth or lack of growth of the world economy. Its based on reviewing facts put together by the World Bank.

One disaster away from poverty

No one would doubt that environmental issues are taking more attention from other issues in the society today. Rightfully, the effect of such occurrences go a long way both in changing lives and impacting economies. There is a direct connect between climate stability and economic prosperity. A huge environmental change could trigger an almost total change in how life and human activities happen in an area.

Flooding, for example is one environmental issue brought about by climate change. As our planet gets warmer, sea levels rise which could easily lead to overflowing of river banks and flooding of entire communities. Or a massive volume of rainfall over a short time could cause flooding too. Whatever causes it is immaterial but the death and destruction that flooding leaves in its trail changes everything for everyone living in that area.

Farmers for example would have their crops in the farmer all washed away. Livestock and other farm resources could be destroyed too. So when a climate-triggered event like flooding destroy food sources, then it means a lot for everyone. For the farmer, their means of livelihood is completely destroyed and they might take time to ever recover. For everyone that depends on the food produced from farms, there will be food shortages which will cause a hike in food prices. There is equally less input from the population as flooding disrupts all economic activity besides the loss of economic value. No one is able to produce or work in order to contribute to overall economic growth.

So from a single massive flooding event, farmers and food producers might have their entire wealth washed away. This could lead to poverty. Local businesses might also have their means of livelihood submerged in flood waters. Houses are destroyes, lives are lost and economic activity grinds to a halt. By the time the waters recede or dry up, the economic cost of this climate-induced disaster might be so huge that a once materially prosperous region might be sent down poverty lane.

Remember that flooding is just used as an example in the discussion above. There are several other environmental disasters that are triggered by climate change. The more such disasters happen in many different places, the more economy decline is felt in those areas. Add that all together, climate-triggered disasters lead to poverty of regions and slow down the growth of world economy.

Reversing the economic downturn

A lot needs to be done in order to slow down if not stop the effect of environmental disasters on the economy as they are triggered by climate change. Interestingly, the World Bank is leading countries toward the path of disaster preparedness and post-disaster recovery.

More funding of climate-related projects

When disaster happens, people in developing countries often suffer a lot. So the World Bank group is setting aside more financial resources to assist developing countries cope with the effects of climate-induced disasters. It announced a huge package of financing in its COP28 event in December 2023. Below is the new increased financial pledge:

First, an ambitious goal to devote 45 percent of our annual financing to climate by 2025 —around $9 billion more than the original target of 35 percent. This new goal makes certain that IBRD and IDA resources are deployed equally for mitigation and adaptation. source

This increased funding is important to organize and execute projects related to climate. For example, such projects might include giving farmers better crops and production methodology that will reduce the release of greenhouse gases to the environment like methane. The financing will also cover organising sensitization programs in these areas that are disaster-prone, to educate the masses green practices and reduce individual carbon footprints. There are many other projects that the funding would help to facilitate. At the end, increased funding for climate projects would go a long way in reducing the effect of environmental disasters on local and global economies.

Renewable power to 10m Africans

Another huge effort by the world bank is channelled specifically to the Africa continent. The World bank has planned a 7-year project starting from July 2024 designed to give bring sustainable electric power to up to 10 million Africans who are without power as a result of climate-triggered environmental disasters. More than 15 billion has been reserved for this massive energy project that would span many years. At the end of the project, beneficiaries would not just have access to power, but it must be environmental friendly.

The World Bank would be sourcing funds from all stakeholders in order to power the project. Member countries would be called upon to support the project and private investors would be called in too. With stable power supply, millions of Africans that are currently without light would be able to add more value to their local economies through production and work

Finally

Climate change is causing a massive challenge in terms of economic growth regionally and globally. However, the right steps by all stakeholders including the World Bank would make it possible to halt any economic changes caused by these environmental disasters. This way, a better world is in store for future generations.

Note: Thumbnail is from pixabay

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