Supply chain disruption due to climate change: the importance of business-led adaptation in the Nordics

Climate Change Disruptions Risk Global Supply Chains and Business Operations

Extreme weather events and degraded ecosystems have a significant impact on global supply chains, as highlighted by Mikaelsson. These disruptions are exacerbated by climate change and pose risks such as shortages of essential goods, halted production, and rising prices. These consequences could have severe implications for food security, healthcare access, and business operations in the Nordic region.

Europe is particularly vulnerable due to its heavy reliance on imports and critical production being concentrated in climate-vulnerable regions. For instance, the EU depends heavily on agricultural and pharmaceutical imports from outside its borders, putting essential sectors at risk in the face of climate volatility.

Recent research by UCL has shown that the global GDP loss from climate change could increase significantly when considering the cascading impacts on supply chains. The study introduces the concept of “indirect economic losses” from climate change and projects potential net economic losses of between USD 3.75 trillion and 24.7 trillion by 2060 in adjusted 2020 dollars.

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