I briefly contemplated making the world go into an ice age, but during ice ages, certain areas of the world become much more fertile, for example, equatorial deserts, and having grown up in Florida, I have a feeling a cool off would have made a lot of people in the Fire Nation very happy. It wouldn't really have made civilization disintegrate the way plants just not growing and animals including people just not being born.

All manufacture is rare all over the whole world. Since almost all time is spent trying to obtain food, no one has time to learn metallurgy, or weaving, or what have you. The manufactured goods that remain are remnants of the time before Aang was frozen, or the years just after, when it wasn't as bad yet.