Global Climate Affecting Business Climate - Research Proposal Example

som Turning Down the Air Conditioning: How the Global Climate will Affect Business Climate Introduction. Despite the attempts of the Bush administration to ignore the dangers of global warming, there is an incontrovertibly large body of scientific research indicating that the planet is warming. Average global temperatures have risen by 0.6 degrees Celsius. Since records have been kept of global temperatures, the ten warmest years ever have all been since 1990 (Blackwell). There is some debate as to the actual cause for this increase in temperature. However, a large part of the scientific community agrees that the accumulation of greenhouse gases in the atmosphere has contributed to this increased temperature. These greenhouse gases, in large part, emanate from human activities, particularly the consumption of fossil fuels and the changes in the ways that land is used. But what does this have to do with business Consider the economic costs of the chaotic weather patterns that have broadened in scale over the past decades. Patterns of floods and drought that have devastated local areas have increased in their extremity. The severity and frequency of hurricanes and tornadoes, as well as in more mundane thunderstorms, have also increased. This can be attributed to the increase in global temperatures, and so one can see that increased production of greenhouse gases can have a lasting effect on business - particularly as those who owned businesses in Florida before it was hit by Hurricane Andrew, or in New Orleans before it was hit by Hurricane Katrina, can attest. The focus of this paper will be to measure the specific effects of climate change on the global economy. In other words, how will the current trend of climate change affect the world's productivity if it does not go unchecked Can the world accept President Bush's laissez-faire approach to climate control, or does the global economy demand more specific solutions Literature Search. I located five articles that represent a cross-section of the spectrum of thought about the ways that global climate change will affect the world's economy. Jennifer G. Hickey's essay entitled "Flaky climate data will cost U.S. dough - economic costs of global warming treaty" represents the side of the skeptics - those who feel that the science behind the idea that human activity has generated greenhouse gases that are causing higher global temperatures to be a fallacy. These skeptics generally tend to fall in the politically conservative ranks, and they see no reason for government to intervene in the affairs of business on the basis of iffy science. Implementing such measures as the Kyoto emissions treaty would have economic effects that are more easily measured and verified, in the writer's opinion, than the less tangible benefits of reduced emissions. One of the counterarguments that this essay puts forth in response to the call for reduced emissions is the idea that, between 1940 and 1970, carbon dioxide in the atmosphere increased dramatically, and yet the global temperature fell during that time frame (Hickey). This article goes through several economic projections of the financial effects of the Kyoto treaty on the American economy, which the Clinton Administration signed, but never sent to the Senate for formal ratification. Of interest is the fact that this article was written in 1997. During the intervening years, such writing as this has declined in the mainstream press, becoming relegated more and more to right-wing publications. It is still an argument that has its strong adherents, though, and would be an obstacle to implementing large-scale environmental regulations unless there were ironclad proof that greenhouse gas emissions directly caused global warming, and that global warming was certain to harm the economy in the future. Next, I found two sources by William D. Nordhaus. One is a brief analysis of the economic and environmental effects of the Kyoto Protocol, and the Kyoto-Bonn Accord, analyzed both with and without potential United States participation. The other is an online book that Dr. Nordhaus published at Yale, and it explains the RICE and DICE models, both of which were used to make economic and environmental projections about global warming, including its effect on the earth's climate, as well as its possible effects on the global economy. The major thrust of the analysis is an indictment of the United States for refusing even to participate in the Kyoto Protocol or its later agreements. Because the United States is such a large generator of greenhouse gases, this analysis argues that any attempt to reduce global emissions of greenhouse gases would be worthless without the participation of the United States. Even though the United States counters by asserting that the immunity of the developing nations (including China and India), Nordhaus argues that the primacy that the United States holds over the global economy gives their government the obligation to try the reduction process. The longer work is a look at the author's original DICE model, and the later RICE model. The analyses look at the economic costs of reducing emissions to 1990 levels, and also to 80% of 1990 levels. They also look at the potential results of reducing emissions to twice those of the pre-industrial era, as well as holding temperature gains to small margins. They compare and contrast these various simulations to come up with what they call the optimal policy, which combines environmental improvement with the least possible effect on the global economy. Ultimately, Nordhaus believes geoengineering to be the optimal policy, because of the net benefits to the economy. Other conclusions that were interesting included the assertion that carbon taxes should not exceed $10 per ton; current tax levels in the Kyoto Protocol are in the range of $100 per ton, which pushes emissions limitations past the point of passing a cost-benefit test. Also, the RICE model was less alarming in its prediction of future global climate change than the earlier DICE model, which would seem to indicate that the planet has some time to gradually reduce emissions before encountering drastic effects. The next source is an analysis of the place of climate change in the priorities of the 2006 meetings of the G8. Paul J. Saunders, in his article, notes that the Russians, in the role of president in this round of meetings, have a particular urgency to discuss the energy side of global climate, since it is basically the vast amount of oil to be found in Russia that brings them to the table of any worldwide economic discussion: using any other set of criteria, the Russians would not be taken seriously as economic contributors. Because energy is so closely linked to discussions about climate change, and because energy is also so closely linked to the economy, any meetings of substance about one of these topics automatically bring the other two the forefront. Finally, I found an examination of the place of the British economy in terms of environmental effect, in comparison to its actual ranking in economic indicators. The thrust of this essay, by John Blackwell, was that the British economy was consuming global resources at a rate far above what it should have been, both in proportion to the amount of resources available on the planet, as well as to the ranking of the British economy against those of other nations. And so the first question that comes to mind from this initial literature search concerns the actual scope and size of the global warming problem. While there is no way to dispute the rising temperature of the planet, there are still many disputes about the cause of the temperature change. Is it the result of the current levels of greenhouse gas emissions If not, why did it not start increasing at the dawn of the Industrial Age Why did the factories of the late nineteenth and early twentieth centuries cause global warming Why has the problem seemingly accelerated since 1990, despite the fact that attempts have been made over the past twenty years to reverse the thoughtless dumping of those gases into the air for the previous century If a causal link can be established between the emission of greenhouse gases and global warming, and if it can be established that reducing emissions of those greenhouse gases would slow, or even reverse, the trend of global warming, then what would the best method be of reducing those emissions It is clear, in any event, that the G8 would need to take leadership in this process: Those eight countries account for 47% of all carbon dioxide emissions worldwide. An analysis of the British economy showed, in fact, that if the world's economy operated on the same scale as the British economy, the world's economy would need 3 planets the size of the Earth to provide the energy resources that this hypothetical world would need (Blackwell). This analysis went on to show how far the British economy lags even the high-performing global mean in such areas as GDP per capita, labor productivity, patent registrations, and average earnings, and so suggests that excessive use of global resources is not necessarily linked with affluent results. Further, the net effects of climate change can be expressed in clear economic terms. There have been several analyses on the ways that the changes in global climate will ultimately affect the economy. Such work as Nordhaus' RICE and DICE models have come up with varying projections as to the rapidity of global warming, as well as to the effects that reducing global emissions would have, both on economic output, as well as future economic production. Because of the high costs of reducing output on economies, it has been asserted that geoengineering is the solution that will be most cost-effective, and as such should be the initial step (Nordhaus 1999). Most analysts agree that some sort of reductive steps are needed, though. Some business management questions come to mind that would be ripe for research: What are the current environmental costs of the massive movements of people to and from work every morning and evening What are the environmental costs of building and maintaining the world's vast supply of office space What are the environmental costs of running millions and millions of computer network systems How much do perceived employee needs drive up those costs Could there be a way to lower perceived employee needs to a more cost-effective level, without reducing morale to the point where the company would have a hard time maintaining productivity levels Is office space used to the full extent of its productive capacity Should employers consider permitting telecommuting on a much wider scale Should the traditional 9-5 workday become a thing of the past What parts of the global economy could be productive at any time of the day For any research that would recommend global warming to be approved by the largest countries, particularly the United States, clear economic motivation would have to be established. In other words, there would have to be clear links between further global climate change and damage to the global economy sufficient to endure the cuts in production that reduced emissions would entail. Particularly as long as there is conservative government in the United States, the argument for affecting global climate will always have to be about the bottom line, and so research about economic damage from changing global climate must focus in that direction. In broad terms, my research question concerns the ways in which global climate change will affect the global economy. In more specific terms, how would increased instability in weather patterns, increased severity in flood and drought cycles, increased numbers of extreme weather events, and other concomitant effects tax the world's economy Other than the preservation of resources and the stewardship of the environment - both of which having proven to be insufficient motivation for altering patterns of human behavior with regard to the earth's resources - what economic motivation could the world have for working to reduce its greenhouse gas emissions I would examine existing models for the economic effects of the reduction of greenhouse gases, and I would also examine existing models for the effects that continued global warming would have on the global economy. This would include an examination of the logistical costs of maintaining working networks in more extreme climatic conditions, as well as the financial costs of the continued use of fossil fuels as those fossil fuels reach depletion. Current projections for oil, for example, suggest that we may reach the point where we have used more than half of the world's oil supply in the next ten to thirty years, and use in the developing nations is only going to accelerate if things do not change. Based on my research, I would select and implement a model that most closely fit the standards for valid scientific research and devise an estimate for the costs of continued global warming. Should this topic prove to be too broad, I would move to examine the economic costs of the continued use of fossil fuels, the fumes of which are one of the primary causes of greenhouse gas emissions. There are several limitations to the research. One set of limitations comes from the biases on both sides of the argument. The politically conservative argument tends to debunk the environmental science in favor of hard economic numbers, while the politically liberal argument tends to find ways to bash Big Business for destroying the habitats of thousands of species. One way to avoid this limitation is to make sure that the methods that I use are supported by groups not closely identified with either political wing. Both ends of the political spectrum have "scientists" in their pockets that will generate basically whatever research they are paid to generate, so finding groups with a reputation for neutrality and skill would be of paramount importance. Potential problems with the research could come from selecting the right set of assumptions. Are we about to run out of oil by 2015, or do we have enough to rely on it throughout the rest of the century Choosing the right assumptions also speaks to ethics, because assumptions about the effects of climate change could be said to hinge on one's personal beliefs. It will be crucial to use valid methods and stay away from opinion as much as possible. In sum, while this is a topic that could be treacherous as far as methodology, it could also prove to be tremendously rewarding as far as the future of not only the global economy is concerned, but the planet itself. Works Cited Blackwell, J 2006 "The business of climate change." Management Issues Vol. 6 No. 22. Accessed 13 December 2006 online at www.management-issues.com/2006/6/22/opinion/the-business-of-climate-change.asp Hickey J G 1997 "Flaky climate data will cost U.S. dough," Insight on the News Vol. 13, No. 46. Accessed 13 December 2006 online at http://www.findarticles.com/p/articles/mi_m1571/is_n46_v13/ai_20083165/print Nordhaus, W D 2001, "Global Warming Economics," Science Vol. 294, pp. 1283-1284. Nordhaus, W D 1999, Roll the DICE Again: The Economics of Global Warning. Accessed 13 December 2006 online at aida.econ.yale.edu/nordhaus/homepage/refs%20012899.PDF Saunders, P J 2006. "Warming to Climate Change." The National Interest Summer 2006. Accessed 13 December 2006 online at http://www.findarticles.com/p/articles/mi_m2751/is_84/ai_n16689819/print Read More