Climate variability's economic impact on Lima and Canberra

¶ … climate and economy in two world cities. There are six references used for this paper.

The world is currently undergoing a number of changes both in terms of the climate and the economy. It is important to look at Lima, Peru and Canberra, Australia and determine what effect the changing climates could have on the economies there.

Canberra, Australia

Canberra is the capital city of Australia and over the past eighty years has grown into a governmental powerhouse, as well as being home to "the Commonwealth Scientific and Industrial Research Organization, the Academy of Science and the National Science and Technology Centre (www.tomw.net.au/cnbst1.html)."

Economy

Australia enjoys a "prosperous Western-style capitalist economy, with a per capita GDP at the level of the four dominant West European economies (www.photius.com/wfb/wfb1999/australia/australia_economy.html)." Due the high level of natural resources available, the major exports of the country are "agricultural products, minerals, metals, and fossil fuels, which account for 57% of total exports (www.photius.com/wfb/wfb1999/australia/australia_economy.html)." This leaves the country vulnerable economically whenever there is a decline in commodity prices throughout the world.

While the country experienced "low growth and high unemployment in the early 1990s, the economy has expanded at reasonably steady rates in recent years. Canberra's emphasis on reforms is a key factor behind its economy's resilience to the regional crisis and its stronger than expected growth rate that reached 4.5% in 1998 (www.photius.com/wfb/wfb1999/australia/australia_economy.html)."

Impact of El Nino on Lima, Peru

The El Nino effect is responsible for shifting the weather patterns in Lima every three to seven years. "The phenomenon usually brings weather extremes - either torrential rain or severe drought, depending on the region - so the farmers have learned to change their planting schedules accordingly (Lama, 2003)."

In 1998, El Nino had a profound effect on the tropical rainforest in South America. During this time, "a high-pressure dome dominated weather patterns over the region, causing high temperatures and extensive drought. Tropical forests received less than 10% of normal rainfall amounts, and the typically humid forest fuels became tinder-dry (Cochrane, 2001)." This produced a number of fires, and the effect on the economy of the area was in the billions.

These fires can have a lasting impact on the environment and economy of the area, since they also "increase global carbon dioxide levels and threaten the health of those exposed to the resulting particulates, as well as causing extensive and long-lasting damage to the affected forests (Cochrane, 2001)."

Ocean Effects

The climate changes also affect the fishing industry of the country. During El Nino, there are "shortages of cold-water fish species and an increase in the availability of species from tropical climates brought by the warm ocean currents (Lama, 2003). The warmer temperatures reduce the amount of plankton in the water, which can result in a loss of millions of tons of fish for fishermen in Peru. While there is an increase in the number of fish used by the fishmeal industry such as anchovy and hake, recent markets have seen a decrease in the price for these varieties, thus further effecting Lima's economy (Lama, 2003).

Conclusion

The changing climate has the potential to affect the economies of both Lima, Peru and Canberra, Australia. There are currently studies underway in both cities to determine ways the climate changes can be used to benefit their economies.