One of the biggest global challenges of the 21st century is climate change, which affects the environment, business, and communities. Warming, storms, and species declines pose risks to economies and inequality in many parts of the world, especially the most fragile ones. This paper focuses on a global challenge that has emerged as one of the most important issues on the agenda of politicians, companies, and societies — the search for harmony between sustainable development and economic growth.

Climate change is actually caused by an increase in the levels of greenhouse gases (GHGs) in the atmosphere due to human activities, for instance, burning fossil fuels, deforestation, and industrial processes. The IPCC has predicted that the global temperature has increased by 1.1°C from the baseline temperature before the industrial revolution. Natural disasters such as hurricanes, heat waves, and floods are happening more often and are more intense. Swiss Re estimates that in 2022, natural catastrophes and man-made disasters brought on by climate change incurred more than $313 billion in economic damages.

Climate change poses many economic risks and has implications across the economy. The agricultural sector, which is vulnerable to climate variability and change, records reduced yields and outputs arising from drought, erratic rainfall, and soil erosion. In sub-Saharan Africa, crop yields for key food crops such as maize and wheat may reduce by as much as 30% by the middle of the century, which is a big threat to food security. Likewise, the fisheries sub-sector is also vulnerable because changing water temperatures and increasing acidity affect the marine environment, which affects people’s income in coastal areas.

Infrastructure is another critical factor, as climate change impacts such as damages to roads, buildings, and energy are rising. Sea level rise is expected to range from 0.5 to 1 meter by the year 2100, putting the existence of coastal regions at risk. Mumbai, Jakarta, and Miami are spending billions of........

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