The economic impact of the relentless heat wave scorching southern Europe, the United States and much of the northern hemisphere may be short-lived in most places, with the temporary closure of tourist spots, the abandonment of outdoor dining and a increase in electricity production. use in connection with air conditioning.
But in the longer term, the economic impact of climate change is likely to be significant.
Devastating fires, floods and drought dominate the headlines. Other insidious effects may attract less attention, but still take their toll. Researchers have found that extreme temperatures reduce labor productivity, damage crops, increase mortality rates, disrupt global trade and curb investment.
An analysis by researchers at the Center for Economic Policy Research found that France, Italy, Spain, Romania and Germany in Europe have been most affected by climate-related disasters over the past 20 years. However, Central and Eastern European countries are increasingly affected by climate problems.
Such developments put additional pressure on government spending as governments are called upon to replace damaged infrastructure and provide grants and aid. The analysis shows that tax revenues may also decrease when climate change disrupts economic activity.
The European Union estimates that economic losses related to climate change are expected to increase significantly in the future, although it noted that there is no mechanism in place in most member states to collect and assess economic costs.
Analysts at Barclays estimate that the cost of every climate-related disaster has risen nearly 77 percent over the past half century.
Global losses will increase. A study published last year that attempted to measure the impact of man-made heat waves on global economic growth concluded that the cumulative loss worldwide between 1992 and 2013 was between $5 trillion and $29.3 trillion.
“We think of extreme heat as a kind of local phenomenon,” said Justin Mankin, a Dartmouth College climate scientist and co-author of the study. “What’s so wild about the heat waves we’re in the middle of right now is not just their size, but the number of people they’re affecting at the same time.”
Mr Mankin said there are 32 million people working outside the home in the United States alone. The proportion of outdoor workers is much higher in developing countries, he noted. Extreme heat also strains power plants, causing rolling blackouts and sometimes even causing kinks in roads.
“We’ve built an economy and a set of practices coded to a past climate,” he said, “not the one that’s unfolding.”