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Global Warming Effects on Business


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Global Warming refers to the increase in the average temperature of Earth’s near surface air and oceans since the mid 20th century and its projected continuation. Global warming, caused not only by natural occurrences but also by human activities, is a heated concern; it affects business, commerce, health and the environment and changes the dynamics of the global economy as we know it today.

Unfortunately, Global warming effects on the business are not only negative but rather devastating, and few only see some positive effects.


Let us briefly examine the Global warming effects on three major business sectors, Agriculture, Insurance and Tourism and on several other sectors such as real-estate, clothing, consumption and health.

A-     Agricultural Sector

By far, the agricultural sector is the most affected sector by global warming which is causing serious disruptions in the weather, which will have a domino effect on other factors.

The direct dependence on climate makes the agriculture sector sensitive to global warming. Increases in global temperature and greater variability will force farmers to adopt new management practices. They will have to invest in new areas, where the climate has warmed enough to make agriculture viable, and may have to abandon other areas that have become too hot, too dry, or too wet.

Global warming will also cause a global shift to the agricultural crops around the world. Types of crops grown in a particular place will most likely change. It will also alter agricultural methods based on the distribution of rainfall; water storage and irrigation to assure water is stored for the summer where the quality of the crops could be affected due to an increase in drought or heat waves.

Unfortunately, even the insurance industry is fearful of the effects of climate change. Certain sectors began taking out newly designed types of insurance policies like weather derivatives and catastrophe bonds to cope with the developing effects of climate change and fulfill the changing customer demands. So with the new demand on insurance policies for risk transfer, insurance companies have the opportunity for more business.

B- Tourism and Travel Sector

It is often said that farmers are on the front lines dealing with global warming; however tour operators and resort owners are not far behind. The Tourism and Travel Sector is highly affected by Global Warming for several reasons. First of all, people are going more “green” nowadays, choosing eco-tours and eco-hotels to minimize their carbon footprint as they travel.  Second, the increase in bad weather events, landslides and erosion will all keep tourists away. Third, many countries that depend on tourism will be affected by the sea level rise or the lack of decent snow or even water shortages, thus resulting in the closing of many beachside tourist spots, ski resorts and golfing hotels.

C - Other Sectors

In addition to the above mentioned effects of global warming on main business sectors, it is essential to mention, even briefly its effects on other sectors:

1-      Real-estate sector: The prices of the equatorial and low-latitude areas of the world becoming  hotter and less desirable as places of habitation will decrease, as well as properties located on coasts affected by storms where it could become more difficult and costly to obtain insurance.

2-      Clothing sector: The clothing industry must cope with weather changes; it should protect itself against loss due to weather. Winter clothes will not be sold out enough in a mild season. However, more summer clothes will be of demand.

3-      Consumption sector: Consumer trends and behavior are also dependent on climate change. If it is too hot in summer, fewer people go out. Same is the case in more severe winters. The weather also has an effect on when people go shopping and what they go out to buy.

4-      Health sector: The climate could also bring a change in our general health. The quality and type of food we eat, the water we drink and our homes are all dependent on our climate and weather. It is feared that warmer climates may see the emergence of some conditions and diseases not found today.

Climate change has a significant effect on most businesses, whether it is negative or slightly positive, even if they are not directly affected by environmental factors. They may be indirectly affected in their supply chain, transportation, or consumer market.

It is important that businesses realize the need to plan for climate change and adopt new suitable strategies to cope with this quick change. We finally say with Elliot Spitzer: “Global warming threatens our health, our economy, our natural resources, and our children’s future. It is clear we must act”.   

The Business Lobby Team

3  available comment(s)

Commented By: hashjh
that is horrible.....

Commented By: Keyla
Such a deep answer! GD&RVVF

Commented By: top seo guys
Thank you for your blog.Really thank you! Keep writing.

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