Modelling the cyclic influence of climate change on the world economic system

Abstract

Global climate change has become one of the central problems of the world economy over last decades. Its impact on the economy forces it to adapt to the new conditions. Increasing carbon dioxide (CO2) emissions, resulting in the greenhouse effect, depletion of natural resources, pollutions and health problems directly caused by achievements of the industrial revolution have been catastrophic for the environment. The object of the research in this work is the world economic system. The aim of the research is to analyze the factors affecting climate change and to produce recommendations for preventing the negative impact of human economic activity on the world economic system. As a result of the research, four basic econometric models have been built: 1) dependence of temperature change on CO2 emissions; 2) dependence of the number of disasters on temperature change; 3) dependence of the world GDP on the number of disasters; 4) dependence of CO2 emissions on GDP. According to the results of econometric research, this study obtained working conceptual model, which describes cyclic influence of the four interrelated factors, forming a closed system. Thus, the work proves that there is a cyclic relationship between climate change and the state of the world economy.