Economic impacts

Households will, in turn, increase spending at local businesses.

how to calculate economic impact of a business

The Direct Economic Impact is a measure of the total amount of additional expenditure within a defined geographical area, which can be directly attributed to staging an event. Read More In some countries, smaller scale commercial activities can suffer severe impacts following oil spills. Pindyck argues that these estimates of the economic impact of climate change have no foundation in economic theory.

Economic impacts of events

That is, if climate change doubles, its impacts more than double see figure 1. Oil spills can cause serious damage to fisheries and mariculture resources. Thus the initial net benefits of climate change are sunk benefits—that is, we will reap these benefits no matter what we do to our emissions. For example, marinas and harbours are usually protected by sea defence structures that can be difficult to clean once oiled and can therefore impede a rapid return to normal business activity. However, no one has credibly suggested that climate change will make us all blissfully happy. The induced effect is a measure of this increase in household-to-business activity. Clearly, 27 estimates are a thin basis for drawing definitive conclusions about the total welfare impacts of climate change. Indirect impacts can be observed through the interruption of fishing activities due to the presence of oil or clean-up operations.

However, more long term and damaging economic impacts can occur when public perception of prolonged and wide-scale pollution remains long after the oil has gone. Impact of Uncertainty The uncertainty about the estimates of the impact of climate change on total economic welfare is rather large.

Economic impacts

An economic impact analysis only covers specific types of economic activity. Some social impacts that affect a region's quality of lifesuch as safety and pollution, may be analyzed as part of a social impact assessmentbut not an economic impact analysis, even if the economic value of those factors could be quantified.

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Economic Effects