Extreme Heat Saps Trillions of Dollars From Developing Economies
Bloomberg News
,(Bloomberg) -- Heat is exhausting. When it’s hot, we honk more when driving and more readily descend into hate speech. Major League Baseball umpires call balls and strikes less accurately. Workers are likelier to fall off ladders.
How heat stress shows up in economic activity overall — and how climate change affects it — continues to draw research attention. A new peer-reviewed analysis by two researchers at Dartmouth College, published today in Science Advances, adds more detail by focusing on the economic effects of extreme heat. It finds that extreme heat caused trillions of dollars in damage to economies around the world between 1992 and 2013. Hot, poorer countries are most vulnerable: They lost a cumulative 6.7% of potential GDP to extreme heat, compared with 1.5% for developed, and cooler, northern countries.
The duo looked at the hottest five-day periods around the world in their 22-year window. Combining meteorological with economic data, they were able to develop a working relationship between heat and economic activity.
Christopher Callahan, a doctoral candidate in Dartmouth’s Department of Geography, and Justin Mankin, an assistant professor in the same department, came to three major conclusions: First, heat extremes “significantly” cut economic growth in warm, tropical areas. Effects on cooler mid-latitude areas are weaker. Second, climate change has made these extremes hotter and more common. And lastly, these trends have worsened inequality by hampering growth in countries already late to develop, which have contributed the least to climate pollution.
Cold places actually benefitted from more heat in the period they studied, while hot places suffered from it. A five-day heat wave in Brazil depresses economic growth by 0.63 percentage points, but in Norway, a heat wave of the same statistical significance increases growth by 0.62 percentage points.
Although the researchers considered average annual temperature rise, they also factored in the daily volatility of temperatures. If the average temperature rise in an area were the only thing that mattered, then similar averages should yield similar damage. But that’s not the case. For example, northeastern France had an average temperature of 50.6F in 2002 and 50.9F in 003. But in 2003, more than 50,000 people died in a catastrophic summer heat wave.
“There’s 365 days in a year. If five of those days are very impactful, they might not show up” in mean temperature rise, Callahan said. “The contribution of our study is to explicitly represent extreme heat in these economic analyses and place it alongside average temperature. You have to consider both of these things independently and additively.”
A better understanding of the relationship specifically between extreme heat and economic impacts has direct implications for decision-making about infrastructure, they said.
The electric power industry has long relied on so-called peaker plants, or generation capacity that’s mostly idle until the highest-demand hours or days of the year. That occurs usually during the summer heat, when everybody turns on and turns up air-conditioning.
The research suggests that analogous cooling infrastructure could meet the rising threat of heat waves — particularly in low-income countries that aren’t yet adapted to the current climate. That means cooling centers, water parks and water fountains and even more AC, on reserve for whenever the hot days come.
“Given finite resources, where do we put them to the greatest effect?” Mankin said. “From an adaptation standpoint, these five hottest days seem to have this very salient signal of economic damage associated with them.”
The study follows a major analysis Callahan and Mankin published in July, which looked country by country at the damage the rich world’s carbon emissions inflicted on developing nations over a similar time frame. The disproportionate climate impacts experienced by poorer nations are likely to be a focus of the UN climate summit taking place in Egypt next week.
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