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Archives of Business Review – Vol. 8, No.7
Publication Date: July 25, 2020
DOI: 10.14738/abr.87.8588.
Novak, D., & Symwoldt, C. (2020). Causes And Consequential Costs Of Anthropogenic Climate Change. Archives of Business Research,
8(7). 171-181.
Causes And Consequential Costs Of Anthropogenic Climate Change
David Novak
Fachbereich Technik, Diploma Fh Nordhessen,
Am Hegeberg, Bad SoodenAllendorf, Germany.
Christian Synwoldt
Fachbereich Technik, Diploma Fh Nordhessen,
Am Hegeberg, Bad SoodenAllendorf, Germany.
ABSTRACT
On the one hand, this paper examines the costs directly caused by
climate change, also comparing the possible costs for preventing
damage; on the other hand, it compares the effects of the radiation
propulsion caused by anthropogenic greenhouse gas emissions on
anthropogenic heat generation through the use of all types of fuels. In
addition to the global warming effect caused by anthropogenic heat
radiation, there are also local heat islands that are affected by a much
greater rise in temperature.
Purpose: A cost comparison of the damage caused by climate change
and a quantitative comparison of the direct heat development through
the use of fuels with the radiative forcing through anthropogenic
greenhouse gas emissions.
Design / methodology / approach: In both cases, the research method
is based on the analysis of public databases such as the International
Energy Agency (IAE), as well as published literature on global energy
supply and the Federal Statistical Office.
Results: The expected consequential damage caused by climate change
will probably present most states with insoluble financial burdens. The
radiation propulsion from anthropogenic greenhouse gas emissions
makes an 80 times greater contribution to global warming than the
anthropogenic heat generation from all types of fuels.
Research / practical implications: Future research should show the
consequences for the economy and the acquisition of money on the one
hand and on the other hand include the effects of global warming and
the heat islands, both of which lead to a loss of habitat.
Originality / Value: This paper has both the expected follow-up costs in
view as well as the causes and effects of anthropogenic greenhouse gas
emissions.
Keywords: Costs of climate damage, consequences of climate change due to
the radiation forcing.
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URL: http://dx.doi.org/10.14738/abr.86.8588 172
Novak, D., & Symwoldt, C. (2020). Causes And Consequential Costs Of Anthropogenic Climate Change. Archives of Business Research, 8(7). 171-181.
INTRODUCTION
Anthropogenic climate change (and its reasons) causes costs from a business perspective for
companies and from an economic perspective for the state and thus for taxpayers. It is interesting
to note that there are currently very few studies on the costs that are directly related to this. One
of the reasons for this may be that it is difficult to assess which costs are directly related and which
are only indirect. Sir Nicholas Stern (Stern, 2006) suspects that economic effects in this regard
could amount to up to 20% of GNP / GDP in 2100. It is also difficult to assess which costs could only
come from Germany, since illnesses and changes in mortality (OECD, 2004) can only be
incorporated into causal chains to a limited extent. Claudia Kemfert (Kemfert, 2007) calculated for
climate damage, adaptation measures and other costs of € 800 billion for 50 years. These are ex- post considerations.
Whether the costs for greenhouse gas reductions as an ex-ante approach are much lower as
claimed can (Edenhofer, et al, 2010), with the associated conditions such as close cooperation in
technological innovations and cross-border emissions trading, be limited to a total of 1% of global
economic output will be, although this total would certainly be very significant. Nevertheless, one
should assume that prevention (ex-ante) is cheaper than cure (ex-post), if that is still possible
(Kemfert, 2005).
It is also problematic to calculate costs that cannot be charged directly to a company, its insurance
company or the state. Victims of heat, natural disasters such as cyclones and floods, which are often
no longer insurable due to the high probability of occurrence, or the simple non-growth of plants,
due to drought and / or elevated temperatures, as well as future increasing flows of refugees (new
term "climate refugees"), here not included (Globalisierung). However, the costs for this arise.
Max Aurel (Aurel, 2016) writes that 10-12% of economic output should be seen as a loss if the
temperature rises by 4 ° C. The possible consequences will be very different, which also results in
the problem of the calculation. Changed crop yields on land and at sea are difficult to bill for. It
becomes even more difficult when changing tourism flows or when (non-) buying products due to
climate change. So-called “tipping points”, which will trigger selfreinforcing damage, are
particularly problematic. Even external effects or externalities are not measured here, so that there
will be losers (e.g. insolvent companies), which are not counted under climate change costs, but in
any case belong to them. The consequences will also become clear in the insurance sector. Even if
you ignore the usual fluctuations in the year, it is financially very difficult if the costs of
environmental damage at a local insurance company in Germany increase practically by 100%
from 2015 to 2016. According to calculations by the German Institute for Economic Affairs,
individual German federal states alone will face cumulative losses of € 100 billion (DIW, 2008).
PROBLEMS BETWEEN CLIMATE PROTECTION COSTS AND CLIMATE DAMAGE
Of particular interest here is a comparison of climate protection costs (ex-ante) compared to
climate damage that has already occurred (ex-post). Depending on whether the measures were
started in 2005 or will not start until 2025, the costs of the damage increase exponentially. Here,
too, it becomes clear that preventive measures are not only more sensible, but also simply cheaper
than those that are repaired afterwards (Venjakob, et al, 2013).
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Archives of Business Research (ABR) Vol.8, Issue 7, July-2020
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At the start of
climate protection
Results in
the year
Climate protection costs
and damage in bill €
2005
2050
400
1.400
2100
3.000
3.400
2025
2050
500
3.900
2100
3.400
15.400
Own illustration based on Venjakob et al. The values only refer to
Germany and are discounted to the year 2002.
Whether the scenario of the International Energy Agency (IEA) of 450ppm CO2 is feasible or what
happens if it is exceeded (possibly even significantly) should not even be discussed here. According
to its own calculations, the OECD assumes costs of around 5.5% of global GDP. However, these are
only the direct negative effects associated with the rise in temperature. A counter-calculation with
possible positive effects is not carried out, since these are probably still much more difficult to
assess.
Dyfed Loesche (Loesche, 2017) also focuses on the costs and the number of events because these
are probably easier to measure. The following graphic illustrates the trend towards both a larger
number of extreme weather events and larger losses due to these. Adjusted for price, the net
increase was around 53% in 10 years (own calculation by the autor).
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Novak, D., & Symwoldt, C. (2020). Causes And Consequential Costs Of Anthropogenic Climate Change. Archives of Business Research, 8(7). 171-181.
The numbers in the oval blue circles above show the number of extreme weather events, the
columns show the estimated losses in USD billion, both values per year and worldwide.
Stacy Morford's (Morford, 2018) long contribution refers to various scientists, both Kate Ricke
from the University of San Diego and the legendary paper by Dietz / Stern. According to Ken
Caldera, calculations at the Carnegie Institute of Science showed costs of USD 417 / ton worldwide.
By today's standards, a sum of direct and indirect costs or damage that can no longer be
represented by the global economy. If these authors even suspect this sum to be an undervaluation
because numerous developments in their model are not even taken into account, it becomes clear
which financial challenges also face global mankind.
Incidentally, the fact that the environmental damage is very likely to be distributed discontinuously
and the costs it will incur is another injustice that will affect the individual states. If one takes into
account in this regard that states usually do not pay external damage in other states (only to a
limited extent as an exception in the European Union via emergency aid funds), then it becomes
clear that there is also among the states from the perspective of financial climate consequences,
winners and will give losers, with all the associated consequences.
We come to the conclusion of the first part: According to different calculation models, several
hundred billion euros per country or up to 20% of GDP as damage to the environment of the
countries of the world. Different scientists from the USA and Europe calculated this independently
of each other, so that's probably the way it is. The costs for prevention (ex-ante) are probably much
lower than if one had to remedy the resulting climate damage (ex-post). There are numerous
climate impacts that cannot (or cannot) be measured, even if they are based directly or indirectly,
e.g. changed or disappeared vegetation, changed tourist flows and millions of climate refugees. As