Climate change and its effects are of great concern — governments are aiming to hit short- and long-term clean energy targets and curb pollution, many individuals are striving to live greener lives and automakers are beginning the transition toward electric vehicles.
Climate change has already had — and will continue to have — major impacts on our lives and ecosystems around the world.
Of course, as a result of all this, climate change will also have a significant impact on trade and the flow of goods (which, from a metals perspective, can only serve to drive up prices).
A 2009 report by the World Trade Organization and the United Nations Environment Programme included a brief section identifying two primary impacts of climate change on trade.
“First, climate change may alter countries’ comparative advantages and lead to shifts in the pattern of international trade,” the 2009 report states. “This effect will be stronger on those countries whose comparative advantage stems from climatic or geophysical reasons. Countries or regions that are more reliant on agriculture may experience a reduction in exports if future warming and more frequent extreme weather events result in a reduction in crop yields.”
The report also noted climate change’s impact on supply chains: “Second, climate change may increase the vulnerability of the supply, transport and distribution chains upon which international trade depends. … Extreme weather events (such as hurricanes) may temporarily close ports or transport routes and damage infrastructure critical to trade. Transportation routes in permafrost zones may be negatively affected by higher temperatures, which would shorten the length of time that roads would be passable during winters.”
Fast forward almost a decade, when the recent National Climate Assessment outlined the impact of climate change on various aspects of life, including transportation, air quality, land use and water, among other categories. The assessment is mandated by the Global Change Research Act of 1990, which requires the U.S. Global Change Research Program to submit a report to Congress and the president no less than every four years.
As many are by now aware, the ramifications of climate change — and inaction in the face of it — are dire.