Climate Change is Driving More Extreme Weather Events

This has economic and political consequences, but it is still uncertain if they can be overcome.

There are many political and economic items on the agenda of business decision-makers and policymakers at the moment that are causing a lot of concern, ranging from the increasing trade tensions between the U.S. and China, the competitiveness of the European Union, the impact of the war in Ukraine and the Middle East, to the increase in geopolitical instability as the world order continues to become more multipolar. But a risk that has not gone away, but yet continues to impact everyday economic and political life, is climate change. This is particularly pronounced every time we are subject to extreme weather events, which now seem to occur more often.

Extreme weather events are typically understood as statistically rare events at a particular place and time of the year. Their occurrence is unexpected and unusual, compared to normally expected weather patterns based on historical weather records for any given area. They have caught communities off guard and caused significant loss, damage, and disruption. Extreme weather events include extreme heatwaves, unusual cold snaps, significant heavy downpours of rain, hurricanes, unexpected tornados, or tropical cyclones which can lead to extensive flooding, forest fires, long droughts, loss of life, and material damage.

Such events are becoming more common causing major disruptions for communities, many of whose infrastructures were not built for the twenty-first century. Recent examples of how they can wreak havoc around the world can be found in the recent floodings in Dubai, Brazil, and Texas, and the brutal heatwave experienced in Asia this month.

It is well established that the Earth’s climate has changed throughout history, but the current trend of global warming is unlike anything we've seen in thousands of years. It's happening fast, and it's clear that human activity since the 1800s is the cause. Human activities have produced the atmospheric gases that have trapped more of the Sun’s energy in the Earth system, which has created a greenhouse effect, warming the atmosphere and leading to rapid changes in climate. One of the key consequences of global warming is an increase in the frequency of extreme weather events.

It is the assessment of The United Nations International Panel on Climate Change (IPCC) that:

“Human-caused climate change is already affecting many weather and climate extremes in every region across the globe…. Human influence has likely increased the chance of compound extreme events since the 1950s, including increases in the frequency of concurrent heatwaves and droughts”

Why is this important?

As the climate continues to undergo significant change and weather patterns become more unpredictable, these extreme weather events are likely to have significant economic and political consequences which will likely grow in magnitude without sufficient and urgent economic and political solutions, that require international cooperation.

Disasters like floods and hurricanes can cause billions in damage to homes, businesses, and infrastructure, overwhelming local and national governments, and forcing them to divert funds at short notice from other programs towards recovery efforts. There is also the prospect of higher insurance costs for businesses and private homeowners. Droughts, floods, and heat waves can devastate crops and livestock, leading to food insecurity and price hikes, which can then have a knock-on effect on inflation, which influences interest rates.

Extreme weather events are also a cause of significant disruption to transportation networks and supply chains, leading to snarl-ups, and shortages of goods and services which in turn have consequences for the wider economy. Then there is also the uncertainty that more frequent extreme weather events could create when business decision-makers decide where (or not) to invest. Moreover, the prospect of more common extreme weather events will also impact the global tourist industry, where tourists may become discouraged from visiting certain regions and some operators may struggle to get affordable insurance.  

Maintaining our existing way of life will no doubt become more challenging. There will also be political consequences. If some areas of the world become uninhabitable people will need to move elsewhere bringing new immigration challenges to their destination countries and new political debates (and perhaps political polarisation) that often emerge with large arrivals of newcomers.

Adverse changes in our weather patterns may also impact security considerations, making some military equipment obsolete and some military installations redundant. Then, there is also the realistic possibility that climate change could nudge a significant shift in global power dynamics. In the future, countries may go to war over resources and world trade routes, with consequences for human life, business supply chains, and world order. There is a reason why some of the world's leading militaries are taking climate change seriously.

NATO has described climate change as an

'overarching challenge of our time' that will 'measurably' increase the risks to security and ‘worsen as the world warms further”.

What’s happening now?

The landmark multilateral Paris Agreement, adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France in 2015, is the framework that best provides for collective action in achieving the necessary greenhouse gas emissions reductions if the global community is going to manage to limit the worse consequences of climate change and avoid more extreme weather events in the future.

At Paris, the overarching goal agreed upon was to hold

“the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.”

However, the UN has since noted that, in recent years, world leaders have stressed the need to limit global warming to 1.5°C by the end of this century, because the UN’s Intergovernmental Panel on Climate Change indicates that crossing that threshold risks unleashing far more extreme weather events, such as severe droughts, heatwaves, and rainfall. To limit global warming to 1.5°C, greenhouse gas emissions must peak before 2025 at the latest and decline 43% by 2030. That’s just a few years away from now.

Source: Our World in Data, Greenhouse gas emissions | CC BY

The Paris Agreement was a triumph for international multilateralism and a big vindication of those who believe big global-scale political cooperation is possible. It is less certain if such an agreement could get over the line in today’s international political environment where geopolitical considerations more often than not reign supreme.

Still, since Paris, there has been a lot of progress in transitioning to a green economy with major initiatives in leading economies such as the IRA in the U.S., the European Green Deal in the EU, and the massive investment in green technology in China. These initiatives which seek to invest in clean energy and replace emission-producing fossil fuels, are promising. Given the progress, there is still every reason to believe that confronting the impact of climate change can prove to be an economic boon.

However, it does not seem to be happening on a global scale, and at the speed that is needed. Nine years have passed since the agreement and despite the progress, it is still not at all certain if the goals agreed to in Paris will be met and if governments around the world continue to have the will or capacity to make it happen.

Investment in the green economy is critical, however, despite the growth in ESG investing in some regions such as Europe, new research this month shows that the world’s big banks have financed nearly $7tn in funding to the fossil fuel industry since the Paris Agreement. Moreover, the practice of ESG investing has also become entangled in Washington’s polarized politics.

Current trends suggest it's becoming more unlikely, even under optimistic scenarios, that the agreement will achieve its goal of limiting global warming at 1.5°C above pre-industrial levels.

The IPCC has said that

“global warming will continue to increase in the near term (2021-2040) mainly due to increased cumulative CO2 emissions”.

In their estimation, under a very low emissions scenario, they believe that global warming is “more likely than not” to reach an increase of 1.5°C and “likely or very likely to exceed 1.5°C under higher emissions scenarios”, making extreme weather events more likely.

Recent research from Climate Action Tracker, an independent scientific project that tracks government climate action and measures it against the globally agreed Paris Agreement, has found that current policies in place around the world could result in warming well above that target, as high as about 2.7°C warming above pre-industrial levels.

The current state of play seems to be one of a lot done but, still, much more to do in reducing human-induced climate change. If these figures prove true in the coming years then climate change is likely to continue to drive more extreme weather events, perhaps with more intensity, and bring with it all the consequences that it would entail.

Final thoughts

There are times when international political cooperation on certain issues does not serve a country’s best interests, but tackling climate change is not one of them. No matter how polarized international politics becomes in the coming years, and how much geopolitical considerations trump everything else, climate change is not going away and will remain a global problem, a special case, where national self-interests on climate can only be best served by aligning them with shared global interests. States that don’t trust each other will still need to find a way to cooperate on climate because, ideally, there can be no true national climate security without global climate security.

There are two key approaches to international politics, the politics of what ought to be and the politics of what is, the politics of the ideal, and the politics of the real. The international political environment is one of anarchy. Yes, it has developed international organisations to foster cooperation such as the United Nations, but there is no global government that can enforce the law. Progress on global issues can only be made through compromise and cooperation. Anarchy is what states make of it, so if states choose the default position of self-interest and the pursuit of relative gains over cooperation on the climate change problem, then it will not be solved. Climate change is a unique problem for countries where self-interest and global interests are on the same page and the pursuit of relative gains is an illusion. International political cooperation has its challenges, there are often differing priorities and economic burdens, but it still offers the best chance to mitigate the impact of climate change.

The Paris Agreement is the framework that best provides for collective action in achieving the required greenhouse gas emissions reductions to limit the effects of climate change that exists right now. This legally binding climate agreement proved that the international political community had what it takes to agree on common climate goals. Under the agreement, parties are now obliged to submit plans outlining their emissions reduction goals, update them every five years, and report regularly on their progress.

However, that was the easier part, promises after all cost very little. The harder part of fully implementing the agreement remains an open question. This is so because there remains the incentive for some countries to free-ride and let others do the heavy lifting. For example, there is a valid concern that because the Paris Agreement lacks an enforcement mechanism, there remains the incentive for some countries to succumb to local social pressures which might tempt political leaders to promise emission cuts they (or their successors) are unwilling or even unable to deliver.

This has already been the case in the U.S. where the previous Trump administration withdrew from the Paris Agreement in 2020 that the Obama administration signed in 2015, only for the Biden administration to rejoin again in 2021. If Trump wins the US election in November, the world's largest economy may exit the agreement again and perhaps even go further by hindering future presidents from re-entering it. In Europe, the green agenda played a central role in EU policymaking over the last five years, but now there is something of a political backlash against some climate policies, particularly in agriculture, as the European Parliament elections approach this June. Meanwhile, China has made massive investments in green technology, but given its population size, it is overall the world’s largest emitter of greenhouse gases, in absolute terms.

It is still not too late to mitigate future damage if the political will can be found to follow through on promises. Civil society has an important role in nudging political leaders to take action toward achieving climate goals. Demographic trends also seem supportive of sustainable investment in the long run. But as the British economist John Maynard Keynes once said, in the long run, we are all dead. So we shouldn’t wait for the long term to arrive and at the very least, neglect the pressing issue of achieving greenhouse gas declines of 43% by 2030 as the IPCC has advised.

If the goals agreed in Paris are ultimately not achieved, if no way can be found to put in place effective enforcement mechanisms, accelerate technological advancement, avoid green technology becoming entangled in international trade disputes, avoid green investing becoming entangled with polarized political debates, better help developing nations make the green transition or moreover, foster the political will for intensified international cooperation focused on faster outcomes, especially amongst the biggest polluters, then our best strategy is to begin planning for a very different scenario, a world where many of our assumptions, values, and cultures will be significantly challenged by the failure of international politics to cooperate and prevent a world that is increasingly challenged by extreme weather events and the disruptions that they cause.