The Economic Fallout From Extreme Heat Will Rise Over Time
The Economic Fallout From Extreme Heat Will Rise Over Time - The New York Times
The Economic Fallout From Extreme Heat Will Rise Over Time
Among the costs of very high temperatures: reduced labor productivity, damaged crops, higher mortality rates, trade disruption and dampened investment.
The economic impact of the pitiless heat wave that is scorching southern Europe, the United States and much of the Northern Hemisphere may be short-lived in most spots, with the temporary closure of tourist sites, the abandonment of outdoor dining and a rise in electricity use related to air conditioning.
But over the longer term, the economic fallout caused by climate change is likely to be profound.
Devastating fires, floods and droughts tend to dominate the headlines. Other insidious effects may generate less attention but nonetheless take a toll. Researchers have found that extreme temperatures reduce labor productivity, damage crops, raise mortality rates, disrupt global trade and dampen investment.
An analysis by researchers associated with the Centre for Economic Policy Research found that in Europe, France, Italy, Spain, Romania and Germany have been most affected by climate-related disasters over the past 20 years. Central and Eastern European countries, however, have been increasingly hit with climate troubles.
Such developments put added pressure on public spending, as governments are called on to replace damaged infrastructure and provide subsidies and relief. The analysis notes that tax revenues could also shrink when climate changes disrupt economic activity.
Economic losses related to climate change are expected to significantly increase in the future, according to estimates from the European Union, although it noted that there is no mechanism in most member states to collect and assess the economic costs.
Analysts at Barclays estimated that the cost of each climate-related disaster has increased nearly 77 percent over the past half century.
Globally, the losses will broaden. One study published last year that sought to measure the impact of human-caused heat waves on global economic growth concluded that the cumulative loss between 1992 and 2013 reached between $5 trillion and $29.3 trillion globally.
Poor countries in hotter climates suffered the most. “Lower incomes make tropical economies less able to adapt to increases in extreme heat,” the study said.
Patricia Cohen is the global economics correspondent based in London. Since joining The Times in 1997, she has also written about theater, books and ideas. She is the author of “In Our Prime: The Fascinating History and Promising Future of Middle Age.” More about Patricia Cohen
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”