The economics of climate change
BY consuming biased and false news from international television networks, including Sky News, Cable News Network (CNN), and the British Broadcasting Corporation (BBC), as well as surveys conducted by companies like Afro-Barometer and Numbeo, one could be led to believe there is no peace in Zimbabwe.
Contrary to the fake news, Zimbabwe boasts 45 years of peace and stability, stunning natural beauty and a stable political system.
When I visited the majestic Victoria Falls, popularly known as Mosi-oa-Tunya, or the smoke that thunders, during the festive season, I was introduced to one of the most amazing natural wonders in the world.
This encounter demonstrates Zimbabwe’s enduring popularity as a top tourist destination.
Situated in Southern Africa, Zimbabwe boasts a diverse range of landscapes, ranging from the lush plains of Hwange National Park to the wild terrain of the Matobo Hills.
The actual treasure, however, is the wellknown Victoria Falls, which mesmerises visitors with its thunderous cascades and misted rocks.
Zimbabwe stands out as a haven of peace and safety in the middle of a turbulent world, attracting tourists from all over the world who come to enjoy its natural beauty.
My visit to Victoria Falls during the festive season was a great experience.
The planes made crisscrossing flights, carrying guests to enjoy the tranquilly and beauty this location had to offer.
This writer was intrigued by a sizable group of people who appeared to be gathering together. After more research, it was discovered to be an American business known only as KCG International.
In celebration of a successful business year, the corporation had invited more than 90 employees from the United States, Latin America, Europe, Asia and Africa to meet in Victoria Falls.
This was a huge boost in the country’s foreign tourism as these visitors went back to their countries and told the truth on the ground about the peace prevailing in Zimbabwe.
After a few exchanges with some of the tourists from KVG International, they raised concern at the false information spreading through the international news organisations that demonise Zimbabwe.
The visitors confessed that when they came to Zimbabwe they had fear, but were surprised to find out that Zimbabwe was the most peaceful country.
They were surprised that people were going about their daily activities and that life was normal and serene and the people were very hospitable.
Ever since Zimbabwe embarked on the land reform programme, there have been bad publicity by some media organisations, especially
ECONOMICS deals with the allocation of scarce resources in the production, distribution and consumption towards satisfaction of an individual or collective need.
Economics deals with two sides, the supply side and the demand side and respectively looking at the presence of production and consumption or their absence.
It also seeks some kind of equilibrium where demand and supply intersect.
Climate change is primarily occasioned by anthropogenic activities, and we have rapped the environment for far too long and it is upset with humankind.
When it gets upset and in its frustration, it withholds and gives less or it gives more than required with devastating consequences in such eventualities.
Climate change via its primary and secondary impact affects both the demand and supply side of economics, and in order that we lay a solid foundation for a sustainable future, we need to critically interrogate this relationship through the lenses of mitigation and adaptation anchored on research and development that help us to be able to glean into the future and adapt as well as adopt.
The supply side
There is scarcity of resources occasioned by climate change or there is oversupply of the climate shocks that ultimately reduce the environment’s capacity to produce.
All climate shocks cause a decline in supply of goods directly or indirectly.
Drought has a direct negative bearing on harvests whereas excessive rains, flooding and storms will destroy the production infrastructure resulting in negative impact on food availability, accessibility and affordability.
One of the ecosystem services is that of provisioning; it provides, produces and makes available the goods and services that meet demand from the final consumer. Droughts, flooding, extreme temperatures and veld fires all affect production and supply from both forest services and agriculture both directly and indirectly.
This is done directly by destroying food crops and indirectly by destroying infrastructure that is used to produce and supply the goods and services to the final consumer.
Accessing markets sometimes is affected when certain places are cut off from producers or suppliers.
The other critical aspect of the ecosystem services is that of regulating the natural environment. For example, wetlands act as buffers, regulating excess water.
When we interfere with wetlands, we upset natural systems resulting in flooding or drying of rivers depending on the nature of interference from human beings.
Most river sources are wetlands and invasion of the same in search of water in cases of drought results in their drying up, reducing downstream agricultural activities.
The net effect is that the environment’s natural capacity to supply in terms of forest services and agricultural produce suffers or declines.
Any decline in supply when you hold other factors constant, from the perspective of availability and accessibility, will push prices up with a negative bearing on affordability.
Resources supply with respect to reconstruction, disaster risk reduction and other relief efforts means there is a reduction in resources that are meant for the productive sectors in light of the inevitable redirection and reallocation.
From that perspective, economic growth suffers; the Gross National Product (GNP), and the current account is usually in a negative position on account of food imports coming in to ameliorate the local deficit.
The demand side
This represents the consumption side of the equation. Ceteris paribus, drought reduces supply and the net effect is that prices will go up with the same population chasing after too few goods.
This speaks to induced inflation. The worst of them all, in the case of extreme droughts, is when the environment cannot supply enough food for the existing population.
When it cannot feed the population, it is called environmental overshoot.
There is also the risk of imported inflation when locals begin to bring in imports from outside the borders to deal with local deficits.
Locally, there could be areas that would have been spared from the negative impacts of climate change.
A seller’s market is created and this pushes prices up with constant supply to deal with excess demand.
The market is at the mercy of very few suppliers who will determine the price.
Even as we interrogate the carbon credits market, there is need to strike a balance between the supply and demand of the same if ever this intervention is going to bring forth the desired results.
Greenhouse emissions and climate change impact response programmes have led to the buying and selling of carbon credits in our quest to avoid, reduce and remove greenhouse gases. There is supply and demand of the same.
Mitigation
“The human intervention to reduce the sources or enhance the sinks of greenhouse gases” (Climate Reality Project, 2019) deals with the causes of global warming and climate change, and this can either be direct (primary) or indirect (secondary) mitigation. Also referred to as abatement strategies. We talk mitigation so that we attend to the supply side of the economics equation.
Climate change impact is such that it reduces the productive capacity, destroys ecosystem services and therefore has a bearing on supply resulting in shortages.
The carbon credits agenda is a mitigatory measure that is meant to promote decarbonisation through nature-based and technology-driven interventions that are meant to attend to the carbon sinks via afforestation, reforestation and any such carbon capture and sequestration technologies that support negative emissions.
Adaptation
“An adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficiary opportunities” (UNFCCC, Adaptation of Fund, 2015), also referred to as secondary prevention, deals and responds to the effects or impacts of climate change, and builds capacity to provide some coping mechanisms and resilience. It speaks to the steps that are taken to minimise and live with the effects of climate change.
This can be classified as planned, anticipatory or autonomous (spontaneous).
We adapt and adopt new ways to leave with the effects of climate change in a way that does not impact negatively on the supply side of the economics equation.
Climate proofing is meant to increase yields in the face of climate shocks.
Pfumvudza/Intwasa is one such deliberate and planned intervention that is meant to climate-proof. Research and development that is meant to improve yields and thus the supply side in the face of climate shocks, speaks to anticipatory adaptation.
Climate change economics & sustainability
In the face of climate change and climate shocks, sustainable development is threatened on account of the imbalance on the supply and demand side of the development equation occasioned by scarcity.
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs is the fulcrum and pith of the Brundtland Report with respect to sustainable development.
The Stern Review (2006) is a good and progressive improvement towards some kind of refining. It is an attempt to balance intra and inter-generational equity in the context of climate change, climate justice, welfarism, utilitarianism, stewardship, consequentialism, energy and the net-zero transition.
The Stern Review’s main conclusion is that the benefits of strong, early action on climate change far outweigh the costs of not acting, the socio-economic costs and benefits that is. The review points to the potential impacts of climate change on water resources, food production, health and the environment. The Impact (direct and indirect) in this case relates to the supply, availability and affordability of food services.
We all have a role to play, duty-bound and obligated to save planet earth through mitigation as well as planned and anticipatory adaptation that is meant to support food supply, security, availability and affordability.
The Second Republic, through the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development as well as the Ministry of Environment, Climate, Tourism, and Hospitality Industry and the Ministry of Higher and Tertiary Education through innovation hubs, are intersecting to attend, mitigate and adapt to the current and expected challenges of our time.
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