The price of energy will continue to rise
In 2010, the then Department of Energy and Climate Change (DECC) released a report which estimated that non-domestic medium-size energy users would see their electricity prices increase be 43% by 2020. This would largely be as a result of climate change and energy policies put forward by the government to meet carbon emission targets.
Environmental policies mean significant change for UK businesses; however, the fossil fuel market and its volatile nature has meant that the price of energy will inevitably keep increasing over a longer period of time. Increased costs in the energy industry will require that businesses manage them as optimally as possible. New ways will need to be considered to comply with these climate change policies and reduce energy consumption.
There are many ways to achieve this. Accessing smart meters for business is a great starting point. These meters will help you monitor your day-to-day usage and better understand your commercial energy bill.
Microgeneration involves the small-scale production of energy. Businesses will use the most familiar type of micro generation through the use of renewable energy systems. This enables companies to avoid expensive unit rates from suppliers as they will be creating their own energy through this process.
Controlling carbon emissions
Effects on international trade
The UK’s decision to leave the European Union will certainly have a colossal impact on international trade. There is also continued uncertainty from the COVID-19 pandemic to contend with too. The latter has a greater impact on the world as a whole, hopefully the successful rollout of a vaccine will alleviate most of these issues in due course. Even so, climate change isn’t temporary and is an order of magnitude above these two issues that will challenge the global economic landscape for decades and centuries to come.
The price of gas and electricity is highly likely to continue increasing in the coming years, inflation has a big part to play in this as the costs of transportation are also rising. Businesses may be able to moderately isolate themselves from some of these challenges if they are proactive in becoming energy efficient and self-sustainable today.
Any company that operates on an international level will have to jump through considerable challenges as different countries and markets will impose their own climate change policies affecting supply chains. Aside from price fluctuations, operational difficulties and economic uncertainty will be significant contributors to all of the above.
After leaving the EU, only time will tell if the UK continues to abide by the EU Emission Trading Scheme (EU ETS) carbon reduction targets that were previously established. China and India, two of the world’s largest emerging economies, may find it challenging to remain competitive as they still heavily rely on fossil fuels such as coal and oil. Policymakers have some big decisions to make in these two highly populated countries.
Corporate social responsibility
Changes to the environment
By 2050, it is estimated that hundreds of millions of people could be displaced. This is due to rising sea levels and other climate changes that may make some regions inhospitable. Over the next 40 years, sea levels are set to rise by several meters, this enormous amount of water is enough to flood coastal capital cities such as London and New York.
Countries that lack the necessary infrastructure and resources will find that their economies and governments will be even more dramatically impacted. Nonetheless, this doesn’t exclude coastal areas across the UK from being affected.
To conclude, climate change and global warming as a whole are set to have a vast impact on society and businesses across the world. The economic picture is shifting rapidly. Businesses that are slow to adopt sustainable policies could find themselves in difficulty. In the years to come, generating renewable energy and reducing carbon emissions will be the main goal for every country, especially those that have signed The Paris Agreement.