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CLIMATE CHANGE
In anticipation
of the macro and micro economic effects of global climate change, the rising of
sea levels, and the concomitant effects on the economic environment, PureData
will (from 2010 onwards) include a series of economic scenarios on Climate
Change, Sea Level Rises and Population Perceptions for each database and the
results of this on the market and financial forecasting matrices.
The scenarios
will cover various probabilities, as proposed and identified by the current
scientific consensus, and will include probability ranges as well as the
cascade effects of those scenarios on the macro-economic and the micro-economic
environments.
For example, if global warming melts the Greenland Glaciers
and/or Antarctic Ice Sheets by 2036, then sea levels will rise by 7 meters. In
these circumstances the following national markets will disappear or will be restricted
because their existing coastal infrastructure will have been inundated:-
Clearly the
situation for the less developed countries will be much graver than that for
the richer countries; however some of the (per capita) richest countries in the
world will be irrevocably damaged by global warming. The critical factors for
these countries include the existing ports and coastal infrastructure and the
financial ability of the country to undertake coastal defense schemes. The cost
/ benefit calculations of attempting to defend a coast will vary according to
each country and in many instances countries will have no option but to abandon
the inundated coastal areas.
Many developed
countries will experience substantial costs in protecting coastal areas and
will have to finance these costs in the long-term. It is unclear if the global
financial systems will be able to develop a global financial model to finance
the substantial coastal infrastructure construction projects which will be
necessary to allow the world economies to continue to function. There currently
exists no initiative amongst governments or central bankers to develop a global financial
system to underwrite the necessary coastal infrastructure construction schemes.
For example, a ‘7 meter Sea Rise Scenario’ will produce many
consequential macro and micro economic forecasting factors and economic effects,
including the following for the Netherlands:-
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Physical effect
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7 meter Sea Rise Scenario
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The
7 meter Sea Rise Scenario
shows the physicals effects on the Netherlands if remedial measures are not
implemented by the national government. The Dutch government are currently
planning for only a 1 meter sea rise and intend to augment sea defenses
accordingly. This limited sea defense protection will however impose a
current account burden on government finances and it is uncertain if the
Dutch government will be able to finance sea defense schemes in the event of
a higher than 1 meter sea level rise.
The area shaded in
pink represents the potential area of
inundation, flood, salination or groundwater pollution in the event of a 7
meter rise in sea level.
Clearly no national
government can allow the sea to inundate their country and thus the
government will be forced into action, irrespective of the costs, to attempt
to prevent or rectify the situation. The unknown factor is whether the
government would be able to raise or attract the necessary international financing of the
sea barrier and infrastructure construction projects.
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National Response
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Potential Political
Scenario Indicators
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Economic Forecast
Scenario
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Political response
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National physical response
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To
construct coastal sea barriers.
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Infrastructure costs
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Construction
of 1500 kms of sea barriers, inlet and river defenses = $200 billion.
Re-construction
of ports and coastal facilities = $100 billion.
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Increased government infrastructure spending. Decreased
government social spending. Disruption to existing economic models and
matrices. Creation of new forecasting parameters in the construction and
supporting industries.
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Economic response
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Taxation consequences
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Sharply
increased taxation on consumers and industry.
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Sharp decrease in domestic disposable incomes and corporate
profitability.
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Economic activity consequences
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Channeling
of government expenditure into coastal projects. Restrictions on capital movements.
Inflation pressures.
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Restrictions in public and private consumption of goods and
services and recession.
Movements of corporate and private funds.
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Civil consequences
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Government
direction / control of the population and employment factors.
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Emigration of productive workers and investors. Possible civil
unrest.
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International co-operation and
support
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Financing
from supra-national and international sources. Co-operation with neighboring
countries for coastal defence schemes.
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Long term debt and need for severe economic constraints on the
domestic economy.
Severe Balance of Trade deficits.
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Population response
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Consumer Financial consequences
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Government
measures to restrict consumer demand.
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Consumer finances depressed. Consumer investments values depressed.
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Employment consequences
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Government
attempts to maintain employment levels conflicts with need to raise taxation
revenues.
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Unemployment levels rise and demand suppression multipliers take
effect.
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Migration consequences
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Confused
Government policies regarding immigration and workforce replenishment.
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Emigration of professional and skilled workers.
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Socio-Economic consequences
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Government
measures to stabilize the socio-economic effects of the situation.
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Population uncertainty about financial security and continued
investment in country. Population migration to neighboring countries.
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Psychological and psychometric
response
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Government
measures to reduce public disquiet and uncertainty.
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Population disquiet about personal risk and safety if sea
defences fail.
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Industry Response
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Supply & Demand consequences
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Government
measures to stabilize industry and commerce.
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Disruption of existing supply and demand norms and forecasting
matrices.
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Investment consequences
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Government
measures to secure investments in industry and commerce.
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Reduction of investments and capital expenditure by industry and
commerce.
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Physical Factors
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Data
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Physical Consequence of this
Scenario
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Nominal
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Best Scenario
Success of
Sea Barriers
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Worst Scenario
Failure of
Sea Barriers
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Area:
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total: 41,526 sq km
land: 33,883 sq km
water: 7,643 sq km
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total: 41,526 sq km
land: 31,526 sq km
water:10,000 sq km
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total: 41,526 sq km
land: 13,883 sq km
water: 27,643 sq km
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Coastline:
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451
km
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451
km
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800
km
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Elevation extremes:
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lowest point: -7 m
highest point: 322 m
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lowest point: -7 m
highest point: 322 m
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lowest point: -14 m
highest point: 315 m
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Land use:
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arable land: 21.96%
permanent crops: 0.77%
other: 77.27%
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arable land: 18%
permanent crops: 1%
other: 81%
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arable land: 10%
permanent crops:1%
other: 89%
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Irrigated land:
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5,650
sq km
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7,000
sq km
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3,000
sq km
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*
simulated data for illustration
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Economic forecasting factors
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Data
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Consequence of this Scenario
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Norm
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Best Scenario
Success of
Sea Barriers
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Worst Scenario
Failure of
Sea Barriers
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GDP (PPP):
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$500
billion
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$450
billion
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$200
billion
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GDP (official):
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$600
billion
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$530
billion
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$230
billion
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GDP growth:
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1.5%
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0.5%
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-4%
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GDP/per capita (PPP):
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$30,000
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$25,000
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$15,000
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GDP - sectors:
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agriculture: 2.1%
industry: 24.4%
services: 73.6%
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agriculture: 2%
industry: 20%
services: 78%
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agriculture: 2%
industry: 15%
services: 83%
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Labor force:
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7.53
million
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7
million
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4
million
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Labor force - by
occupation:
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agriculture: 2%
industry: 19%
services: 79%
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agriculture: 3%
industry: 18%
services: 79%
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agriculture: 2%
industry: 12%
services: 86%
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Unemployment:
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6.6%
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9%
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15%
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Population poverty
line:
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10.5%
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14%
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18%
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Household income distribution:
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lowest 10%: 2.5%
highest 10%: 22.9%
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lowest 10%: 2%
highest 10%: 25%
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lowest 10%: 1.5%
highest 10%: 35%
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Gini index:
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30.9
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35
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45
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Inflation rate:
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1.7%
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5.5%
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9.5%
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Investments:
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19.5%
of GDP
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15%
of GDP
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9%
of GDP
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Budget:
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revenues: $291.8 billion
expenditures: $303.7 billion
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revenues: $200 billion
expenditures: $3000 billion
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revenues: $150 billion
expenditures: $3000 billion
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Public debt:
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52.7%
of GDP
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200%
of GDP
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800%
of GDP
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Agriculture -
products:
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grains,
potatoes, sugar beets, fruits, vegetables; livestock
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grains,
potatoes, sugar beets, fruits, vegetables
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fruits,
vegetables; livestock
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Industries:
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agroindustries,
metal and engineering products, electrical machinery and equipment,
chemicals, petroleum, construction, microelectronics, fishing
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agroindustries,
metal and engineering products, electrical machinery and equipment,
construction
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metal
and engineering products, electrical machinery and equipment, construction,
fishing
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Industry growth:
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-1.4%
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-5%
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-15%
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Current account:
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$39.95
billion
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-$300
billion
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-$600
billion
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Exports:
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$365.1
billion f.o.b.
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$330
billion f.o.b.
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$100
billion f.o.b.
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Exports - partners:
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Germany
25%, Belgium 13%, France 9.5%, UK 9%, Italy 5.5%, US 4.%, Spain 4%
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Germany 34%, Belgium 15%, France 9%, UK 9%, Italy 5%, US 2%, Spain 4%
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Germany 54%, Belgium 16%, France 5%, UK 5%, Italy 5%, US 2%, Spain 2%
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Imports:
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$326.6
billion f.o.b.
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$600
billion f.o.b.
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$250
billion f.o.b.
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Imports - commodities:
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machinery
and transport equipment, chemicals, fuels, foodstuffs, clothing
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machinery
and equipment, materials, fuels
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machinery,
fuels, foodstuffs, clothing
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Imports - partners:
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Germany 16.6%, Belgium 9%, China 9%, US 8%, UK 5.8%, France 5%, Russia 4%
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Germany 20%, Belgium 12%, China 4%, US 4%, UK 8%, France 6%, Russia 6%
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Germany 25%, Belgium 12%, China 4%, US 3%, UK 8%, France 7%, Russia 7%
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Foreign exchange:
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$20.54
billion
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$2
billion
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$0
billion
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Debt - external:
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$1,645
billion
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$3,000
billion
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$6,000
billion
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*
simulated data for illustration
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Demographic forecasting
factors
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Data
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Consequence of this Scenario
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Norm
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Best Scenario
Success of
Sea Barriers
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Worst Scenario
Failure of
Sea Barriers
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Population:
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16,500,000
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15,000,000
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9,000,000
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Age structure:
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0-14 years: 18%
15-64 years: 67.8%
65 years and over: 14.2%
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0-14 years: 16%
15-64 years: 66%
65 years and over: 18%
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0-14 years: 20%
15-64 years: 60%
65 years and over: 20%
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Median age:
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39.4
years
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38
years
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42
years
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Population growth
rate:
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0.49%
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-5%
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-15%
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Birth rate:
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10.9
births/1,000 population
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9
births/1,000 population
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6
births/1,000 population
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Death rate:
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8.68
deaths/1,000 population
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9
deaths/1,000 population
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12
deaths/1,000 population
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Net migration rate:
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2.72
migrant(s)/1,000 population
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-3
migrant(s)/1,000 population
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-9
migrant(s)/1,000 population
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Infant mortality:
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total: 4.96 deaths/1,000 live births
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total: 6 deaths/1,000 live births
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total: 9 deaths/1,000 live births
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Life expectancy at
birth:
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total population: 78.96 years
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total population: 71 years
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total population: 65 years
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Total fertility rate:
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1.66
children born/woman
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1.5
children born/woman
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1.1
children born/woman
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*
simulated data for illustration
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