There are numerous natural disasters throughout the world. Tornadoes, mudslides, forest fires, tsunamis, hurricanes, snow storms, volcanic eruptions, earthquakes and the list goes on and on. Many of these occur naturally on an annual basis and no one knows when to expect them for the most part other than some guesstimations by scientists and meteorologists. For the most part, we know when some will occur because of the way the seasons are. However, many are unforeseen and have devastating effects on the areas that are impacted by these disasters. As a direct impact of these disasters, the costs of products and services often skyrocket and damage pricing fluctuations so that as consumers, we end up paying more for goods that are often produced in the affected area or as a hit to the global economy all the way around.
Tsunamis and Earthquakes
It is estimated that up to 50 earthquakes a day occur and can be detected by scientists and National Earthquake Informational Centers. That is the equivalent of thousands per year. Some of these earthquakes are slight tremors and can go unnoticed and without detection. However, people may not just feel the ground shake, but it can stir up a shake among pricing of goods globally too.
For one example, in March 2011, a very destructive earthquake that was recorded as a 9.0 on the Richter scale was off the coast of Japan. As a result, this land that is a huge worldwide provider of technical products and even automobiles were shook up. Japan then faced cleaning up destruction and even a fear that a nuclear power plant would have another devastating catastrophe as a result of the land around it having seismic waves that left it unsettled. The country of Japan was on edge for many days and as a result, its production resulted in partial shortages as an effect of the tsunami and earthquake that had targeted that region. TIME Magazine indicated that such technical equipment such as computers, televisions, and phones were to shift in pricing as an effect of the natural disaster, with the prices rising as a result. During this time, many factories and manufacturers shut down due to the natural disaster disruption and business simply could not carry on for quite some time. These pricing shifts could be indicated several months down the road even.
Global Warming and the Greenhouse Effect
This factor is not old news. In fact, a lot of awareness has increased about it in the recent past, as it has been noted that the overall global temperature has increased a few degrees slightly in the most recent years. It has been somewhat of a gradual change but it has also been noted that glaciers have been melting and the oceans are becoming deeper, coastal lines are narrowing and this is all a direct result of the temperature increase.
The whole idea behind this, is the carbon footprint that all of us leave on the earth and includes pollution and smog and anything that can apparently change the ozone layer, making it thinner as a coverage over the earth and letting more sunlight in, which then in turn, makes the globe a warmer place over time. Shifts in eras are nothing new. Of course, we have proof that an ice age once occurred but that was before everything was more modernized on the planet and there was little to no focus on business but more of a focus on survival.
Since global warming is becoming more of a household term, prices have also taken a turn toward the more expensive side of the spectrum. Anytime that there is some sort of international panic or warning, prices have the tendency to do this. Now this is the first time that any changes like this have occurred during any of our lifetimes. However, the direct result in the global changes has impacted pricing of products. Politicians are getting involved on creating policies as to how to slow global warming (if that is even possible) and it has directly affected the international economy. Regardless of the environmental impact that each of us has on global warming, this will be an issue for several future generations. As global warming increases, so will prices on consumer goods.
Drought
For many years in our past history, there have been issues of drought and it can also result in unusually high temperatures in certain areas. At these times, certain areas that are well known for their agricultural productions, such as grapes, pumpkins, potatoes, oranges, and many other goods, drought has affected the pricing of goods. In almost any given season we hear of an area that has had drought. As a result of drought, producers cannot grow the typical harvest that they are used to and there is in turn a shortage of these goods. As a result of this shortage, products become in higher demand and the prices then skyrocket.
Many staple items grown globally are impacted. If a major rice grower has had a lack of rain, the crops cannot grow. If the dairy cows are short of grass, milk production halts. If the rain does not water the vines, the trees and other forms of plantation, there is no way for products to grow. As a direct result, many of these areas that are dependent on their staple items then experience famine. If they are a major exporter to other regions across the globe, these areas also do not have access to these products. If these products are able to grow in other areas, the prices jump up. It is practically an economic rule.
Torrential Downpours
Conversely to the subject of drought is that of torrential rains. At this point, some areas have an uncommon wet season which can also effect production. This is currently displayed in the butter crisis in Norway. They had a very wet summer which resulted in a change of the quality of grazing pastures for the cattle. This in turn affected the dairy products that were produced in Norway because the cows simply were not able to produce what they normally would due to lack of proper nutrition. As a result, Norway waited several weeks for butter imports and it in turn made the cost of butter surge.
Additionally, these heavy rains can also cause flooding. This can be devastating for areas that people live and work. As a result of the flooding, people have flooded homes, people cannot get to work and oftentimes, business production must be halted. This hurts the local and global economy because business cannot presume as usual.
Since the earth is constantly undergoing change due to daily natural disasters that are unforeseeable, it is a pattern that with any naturally occurring disaster that prices are directly affected. Many times lands are ruined and take a lot of time to repair and bounce back. People’s lives are devastated and many even parish. The government often does what they can to offer assistance but it comes at an economic price. The only way we can brace ourselves for these disasters is to be prepared and accept the fact that they will occur. It is just a matter of when and the time of ‘when’ comes about, we can try to soften the impact that it has on us and our global economy when these disasters hit.