Extreme heat threatens the global economy. Gregorio Borgia/AP
The extreme heat harms people’s health and labor productivity.
These impacts come with economic costs, and researchers are now beginning to understand the grand total.
According to one study, the global economy lost an estimated $16 trillion on average between 1992 and 2013.
This is a machine translation of an article by our US colleagues at Insider. It was automatically translated and checked by a real editor. We welcome feedback at the end of the article.
There is no question that the extreme heat sweeping the globe is costing the economy as hazardous conditions force workers to stay home or shorten their work day and businesses are forced to close temporarily.
The full cost is only just beginning to become apparent, however, as new research shows the cost of scorching temperatures is far greater than previously thought.
“Many studies have examined the effects of extreme heat on health and mortality risk, as well as on labor productivity in specific sectors such as agriculture and construction,” Justin Mankin, associate professor of geography at Dartmouth College, told Business Insider. Newly available economic data and more advanced climate models now make it possible to measure how extreme heat is damaging the global economy.
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$16 trillion lost to heat
Between 1993 and 2013, the world lost an estimated $16 trillion on average to extreme heat caused by the climate crisis. Losses were much higher in poor tropical countries, amounting to up to 6.7 percent of GDP per capita. In wealthier regions, per capita GDP fell by 1.5 percent.
The findings underscored the unequal burden of the climate crisis, largely because rich countries are the biggest culprits, Mankin said. Economies in low-income countries tend to be more vulnerable to extreme heat and other disasters because they are agricultural, a large proportion of the workforce works outdoors, and energy infrastructure is not resilient.
The study also highlights the costs of inaction, he added.
“The economic costs of extreme heat don’t encompass the entirety of the economic costs of climate change,” Mankin said, “so that means our economy and the wealth that we secure through our economy are much more sensitive to climate than we’ve previously understood.” have.”
July was the hottest month on record
Headlines around the world are evidence of this sensitivity, particularly in July, which is set to be the hottest month on record.
In the US, researchers found that reduced labor productivity alone in hot weather is costing the country $100 billion annually. That amount could double by 2030, accounting for an estimated 0.5% of GDP, according to a study by the Adrienne Arsht-Rockefeller Foundation Resilience Center. Adding to the costs are lower crop yields on farms and negative impacts on people’s health.
Heat harms tourism
Texas’ gross domestic product could lose $9.5 billion this year, slowing the growth rate to 0.47%.
Extreme heat has also hit southern Europe and northern Africa this year, including Italy, Spain, Greece and Tunisia. The heat is hurting tourism and workers are walking out in some cities, CNN reported.
The European Union lost more than $600 trillion (€547.737 trillion) between 1980 and 2021 due to extreme weather, with heatwaves accounting for 13 percent of the cost, the Union Environment Agency found.
Those losses could end up being even greater, Mankin said.
“As average temperatures rise, statistically more and more places will experience extreme heat,” Mankin said. “What’s special about extreme heat is the number of people affected. It lasts longer and spreads over larger regions.
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