Climate Change: A Threat to Global Supply Chain!
As if the ever-present pressure of global supply chains wasn’t enough, climate change has become yet another stress point for these complex, interwoven worldwide networks that produce and distribute goods for end-users. Supply chains are being disrupted at every turn owing to continual pandemic impacts, new overseas blockades, labor shortages, and a lack of transportation capacity, to mention but a few of the key stressors.
We can now add global warming to the list. The United Nations characterizes climate change as “long-term changes in temperatures and weather patterns,” which it says is caused by human activities. However, according to the report, since the 1800s, human activity has been the primary driver of climate change, particularly due to the use of fossil fuels such as coal, oil, and gas.
According to the UN, “Burning fossil fuels generates greenhouse gas emissions that act like a blanket wrapped around the earth, trapping solar heat and rising temperatures.” Carbon dioxide and methane are examples of greenhouse gases (GHGs) causing climate change.
“These are the result of driving a vehicle or heating a building with gasoline or coal,” it states. “Land and forests can also emit carbon dioxide as a result of clearing them. Landfills for waste are significant sources of methane emissions. The energy, manufacturing, transport, construction, agriculture, and land use sectors are among the top contributors to global warming.
The Link Between Climate Change and the Supply Chain
In Yale Environment 360, Jacques Leslie claims that while the worldwide pandemic has been attributed to most of the supply chain disruptions that have occurred over the last two years, climate change is a long-term problem that isn’t going to go away anytime soon.
He adds, “As an example, rising sea levels may be one of the most serious threats to supply chains. “Supply chain disruptions caused by hurricanes, floods, wildfires, and other types of increasingly severe weather are already jolting the global economy years before sea level rise begins flooding ports and other coastal infrastructure,” Leslie explains.
He references the Texas freeze, which caused the worst involuntary energy blackout in United States history; severe rainfall and snowmelt causing certain banks of the Rhine River to burst in Europe (causing a halt in river shipping for many days); and flooding throughout central China that disrupted commodity supply chains, including coal, pigs, and peanuts.
“Scientists predict that such climate-related disruptions will get more severe in the future as a result of global warming,” says Leslie. “Moreover, ports, rail lines, highways, and other transportation and supply infrastructure will be jeopardized by rises in sea level of 2 to 6 feet—and perhaps more—by 2100.”
With about 90% of the world’s freight transported by sea, rising seas will eventually endanger the majority of the world’s coastal ports. However, to most port managers, Leslie claims that risk still feels distant. “Only a few port operators have taken action to counter the danger and only a tiny fraction have attempted to understand it,” he adds.
A Disrupter in the Supply Chain
The supply side of the equation, where rapidly warming seas and increasingly severe weather have already started to impact several sectors, has also been disrupted. “As this development continues, certain supply chains will have fewer and fewer dependable sources for certain goods.”
The growing need for food is exacerbating the problems of climate change, according to a new study. Climate change also poses a threat to the workplaces that keep global supply chains operating. “The most basic method this would happen is through temperature-related worker tiredness and sickness,” it states. “For individuals outside or without air conditioning, every degree increase in temperature may reduce productivity by 1-3 percent.”
According to GlobalTradeMag, “those percentages may appear small now, but they will add up to the equivalent of 80 million job losses by 2030.” It continues, “That would result in global economic losses of $2.4 trillion.” Rising sea levels and severe weather would displace many employees, making it difficult for some warehouses and other facilities to maintain adequate staffing levels.”
While governments, companies, and individuals strive to better understand and address climate change, the UN states that while climate action necessitates significant government and business investments, “climate inaction” is considerably more costly.
“One important step is for developed countries to keep their promise to give $100 billion a year to developing nations so they can adapt and move toward greener economies,” according to the UN.