Heatwaves have cost world economy trillions in past two decades: Report
Massive economic losses due to sweltering temperatures brought on by human-caused climate change are not just a problem for the distant future.
Massive economic losses brought on by extreme heat induced by human-driven climate change are an issue now, not only in the distant future.
According to a study published in the journal Science Advances, since the early 1990s, increasingly extreme heat waves brought on by global warming have already cost the global economy trillions of dollars, with the poorest and lowest carbon-generating countries suffering the most.
Researchers from Dartmouth College coupled recently made available, comprehensive economic data for places all over the world with the average temperature for the hottest five days of the year for each region. They discovered that from 1992 to 2013, heat waves statistically correlated with changes in economic growth and that the negative effects of extreme heat on human health, productivity, and agricultural output cost an estimated USD 16 trillion.
The researchers note that the results highlight the urgent need for laws and technological advancements that safeguard citizens during the hottest days of the year, particularly in the world's hottest and most economically precarious nations.
"Accelerating adaptation measures within the hottest period of each year would deliver economic benefits now," said first author Christopher Callahan, a doctoral candidate in geography at Dartmouth. "The amount of money spent on adaptation measures should not be assessed just on the price tag of those measures, but relative to the cost of doing nothing. Our research identifies a substantial price tag to not doing anything."
The study is among the first to specifically examine how heat waves affect economic output, said senior author Justin Mankin, an assistant professor of geography at Dartmouth. "No one has shown an independent fingerprint for extreme heat and the intensity of that heat's impact on economic growth. The true costs of climate change are far higher than we've calculated so far," Mankin said.
"Our work shows that no place is well adapted to our current climate," Mankin said. "The regions with the lowest incomes globally are the ones that suffer most from these extreme heat events. As climate change increases the magnitude of extreme heat, it's a fair expectation that those costs will continue to accumulate."
Heat waves have been included in climate models and earlier research alongside other extreme occurrences brought on by climate change, such as more frequent flooding and more intense storms, according to Callahan. But according to him, heat waves have a distinct character. They happen more quickly than droughts do, and as long as human activity fuels climate change, the hottest days of the year are expected to warm up far more quickly than the average global temperature.
"Heat waves are one of the most direct and tangible effects of climate change that people feel, yet they have not been fully integrated into our assessments of what climate change has a cost and will cost in the future," Callahan said. "We live in a world that has already been altered by greenhouse gas emissions. I think our research helps demonstrate that."
According to Mankin and Callahan, the study's findings highlight the challenges of climate justice and inequality. The world's poorest countries in the tropics and the global South have and will continue to bear a disproportionate share of the economic consequences of excessive heat. The majority of these nations have made the smallest contributions to climate change.
The researchers discovered that whereas the world's wealthiest regions experienced economic losses from extreme heat events of 1.5 per cent of GDP per capita on average, low-income regions experienced losses of 6.7 per cent of GDP per capita.
Furthermore, the study revealed that to a certain point, wealthy subnational regions in Europe and North America -- which are among the world's biggest carbon emitters -- could theoretically benefit economically by having periods of warmer days.
“We have a situation where the people causing global warming and changes in extreme heat have more resources to be resilient to those changes, and, in some rare cases, could benefit from it,” Mankin said. “It's a massive international wealth transfer from the poorest countries in the world to the richest countries in the world through climate change -- and that transfer needs to be reversed.”
Mankin and Callahan evaluated the economic harm that certain nations have inflicted on others as a result of their contributions to global warming in a report that was published in the journal Climatic Change in July. The study provided the scientific evidence that countries need to judge their legal eligibility to make claims for financial losses caused by emissions and global warming.
In their most recent book, Mankin and Callahan argue that major polluters should shoulder a significant share of the cost of preparing for extreme heat events in addition to supporting the development of low-emission economies in low-income countries. Sharing the expenses of adaptation measures would help both developed and developing countries in the global economy, according to Mankin.
“Almost no country on Earth has benefitted from the extreme heat that has occurred,” Mankin said. “Global events like the COVID-19 pandemic have revealed the close interconnectedness of the supply chain and the global economy. Low-income countries have disproportionate numbers of outdoor workers who often generate the raw materials so crucial to the global supply chain – there is absolutely the potential for upward ripple effects.”