Climate change could worsen issues with the supply chain


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Grace Smith | September 13, 2022

A record-setting drought across China in August led to many immensely disrupted economic activities by stopping supply chains for automobiles, electronics, and more. This drought-induced interruption in the supply chain likely won’t the be last supply chain issue caused by climate change.

The severe drought in China caused rivers to dry up, negatively affecting hydropower. The lack of water flow is impacting areas in China that rely heavily on water power, including Sichuan, which gets over 80 percent of its energy from hydropower. The drought also forced many companies to halt business operations and stop shipping. 

White House economics said climate change-caused natural disasters like droughts and wildfires becoming more frequent would likely disrupt delivery on a global scale and worsen supply shortages, as seen in examples of U.S. natural disasters in the past few years:

  • Droughts in the western portion of the U.S. has put additional stress on agricultural exports.
  • Wildfires in the western U.S. have harmed the planning and logistics of larger delivery companies like Amazon. 
  • Texas winter storms in February 2021 shut down semiconductor plants, causing a shortage of chips across the world.

“What we just went through with [COVID-19] is a window to what climate could do,” Kyle Meng, associate professor of environmental economics in California told the New York Times.

The National Centers for Environmental Information calculated the number of billion-dollar natural disasters in America has grown to an average of 20 in the past two years. These increased disasters and high temperatures could create competition for food and prompt new policies that stop the exports of food.