Climate Change and Economy

Summer 2020 in South Korea. Several disasters, such as unusually long and scary heavy rains, landslides and flooding, have made us feel the climate “crisis” with our very skin. Unusual downpours globally, typhoons and frequent wildfires in California also show our lives in an increasingly hot world.

The climate does change naturally by the rules of nature. The Earth experienced climate changes leading to the Paleozoic, Mesozoic, Ice Age and Interglacial Period. However, the current situation is not a mere change, it is a crisis. Just as Jeju’s globular trees have become extinct and squid sardines have disappeared in the southern sea, many species fall behind when climate change progresses rapidly. Supply of food, water, and energy becomes unstable. The biggest cause of the climate crisis is carbon emission. The by-products of coal, oil, and gas, which has been the main energy sources since the Industrial Revolution, are raising the Earth temperature, threatening people’s lives.

Climate change has a huge impact on human economic activity. Hong Jong-ho, a professor at Seoul National University, predicted economic damage by injecting the estimated precipitation on the Korean Peninsula into the economic model by 2060. The result was that by 2060, annual damage could reach up to 23.7 trillion won. Natural disasters caused by climate change can destroy economic activity. Rising global temperatures, for example, will reduce agricultural productivity, which will cause massive price spikes and conflicts and therefore lower overall industrial productivity. According to environmental writer Mark Lynas and climatologists, a one degree rise in the average temperature of the Earth will cause disasters in mountains and fields, with ice caps disappearing or desertification deepening. If the temperature rises by 2 degrees, there will be a global drought and flood, and if the temperature rises by 3 degrees, 50% of Amazon’s forests will disappear. A rise of 4 degrees will flood the globe with climate refugees, and a rise of 5 degrees will lead to a struggle to secure food and water. Lynas said a six-degree rise would result in the extinction of all plants and animals. Many climatologists say that the earth has already crossed an irreversible path. There is not much time to save mankind.

So far, the history of economic growth has correlated with the history of fossil fuel use. Human economic activity using fossil fuels after the Industrial Revolution had lead to the prosperity of human civilization; at the same time, it is causing rapid climate change and destroying the economy. 

Carbon, the main culprit of climate change, has no borders and no passports. This is a common problem for mankind as a whole. Although climate change is still considered an environmental issue simply about polar bears in South Korea, it is internationally addressed as an economic and social system transition. The Paris Climate Convention recommended that countries continue to make active efforts to reduce carbon emissions by 2030. The United States and Europe are pushing for a Green New Deal that calls for a change in the overall operation of economic activities from fossil fuel-based economies to more sustainable economies and renewable energy proliferation. South Korea also adopted the Green New Deal. The Green New Deal calls for measures by cooperation between countries. For example, it requires the transfer of resources and support of technology from developed countries that have historically produced a lot of carbon, to developing countries to aid sustainable development.

About the situation in Korea, people think only fiscal investment and job creation are important because the economy needs to recover quickly from the Covid-19 crisis. However, the climate issue should not be deprioritized in relation to economic recovery. There are several ways to catch the two rabbits of tackling climate change and economic recovery simultaneously. First, the government should seek to expand domestic and foreign private investment with international cooperation, leading the discussion on sustainable finance. Secondly, in the process of transitioning to a low carbon economy, support for fossil fuel-based industrial workers and energy-poor people is needed to decline and encourage local government participation. Third, it is necessary to find convergence and complex fields that can apply digital technology to a wide range of fields. Fourth, strategies presented domestically should be reviewed in terms of overseas expansion, and measures should be considered to substantially support the green transition of developing countries.

Of course, the government’s efforts are not everything. Two hunters are needed to catch two rabbits. It’s even better if there are more than two hunters. In addition to government-level policymaking and implementation, individual changes in behavior should be made simultaneously in agreement with and cooperating with the purpose of the international Green New Deal. Everyone should keep in mind that if we don’t act now, we can never overcome the pain and burden that our children’s generation cannot afford.


Climate Change and Disaster. (2020, September 29). Green Korea. 

Kim, J. (2020, July 14). ‘Climate change’ causes mass death of globular trees on Hallasan Mountain.Jeju Ilbo.   

Lynas, M. (2008). Six Degrees: Our Future on a Hotter Planet. National Geographic.

Lee, M., Hong, J. H., & Kim, K. Y. (2017). Estimating Damage Costs from Natural Disasters in Korea. Natural Hazards Review, 18(4), 04017016. 

The Paris Agreement, Adopted Dec. 12, 2015; entered into force Nov. 4, 2016   

Gornall, J., Betts, R., Burke, E., Clark, R., Camp, J., Willett, K., & Wiltshire, A. (2010). Implications of climate change for agricultural productivity in the early twenty-first century. Philosophical Transactions of the Royal Society B: Biological Sciences, 365(1554), 2973–2989. 

Moon, J., Na, S., Lee S., Kim, E. (2020, August 1) The international community’s response to the Green New Deal and its Implications. Korean Institute for International Economic Policy.

Lee, Y. (2020, March 1). Climate change policy paradigm: the status of the Green New Deal. Korea Policy Planning Committee.

Friedman, L. (2021, February 11). What Is the Green New Deal? A Climate Proposal, Explained. The New York Times. 

Categories: Society