Here’s how heat waves affect economies


Iit’s hot outside. Not just a hot, brutally hot summer. And it’s not just your area, it’s pretty much everywhere.

The Pacific Northwest hits records. New York and Philadelphia set new records. London has seen days of over 100 degrees Fahrenheit. Wichita Falls, Texas hit 115 on July 19. China has issued its highest heat alert for nearly 70 cities. And in India, the high in Delhi reached 121 in May, a temperature so hot that birds fell from the sky.

That’s a bit more than we expected in the warmer months of the year. And while that’s a great excuse to avoid mowing the grass or using the pool, the story for businesses is quite different. Extreme temperatures have an economic impact, and it’s bigger than you might imagine.

Although there are no estimates for the recent band of sweltering weather, the European Environment Agency (EEA) estimates that between 1980 and 2000, heat waves in 32 European countries cost up to $71 billion.

A more recent study, conducted in 2021 by European economists and climate experts, estimates that heat waves, again in Europe, have lowered annual gross domestic product by up to half a percent over the past decade. .

Part of the problem is productivity. They’re not called the lazy, foggy days of summer for no reason. The hotter it is outside, the less people want to work, which has an impact on their production. A recent survey found that states’ GDP drops 0.25% for every degree the thermometer moves above average summer temperatures.

In fact, the International Labor Organization predicts that by 2030, “the equivalent of more than 2% of the total number of hours worked worldwide [will] be lost each year, either because it is too hot to work or because workers have to work at a slower pace. This equates to the loss of 80 million full-time jobs, says Phys.org. And it costs $2.4 trillion, nearly 10 times the heat-related productivity loss of 1995.

In some tropical regions, in fact, working outdoors could become impossible by the end of the century for 250 days a year, according to the UN’s Intergovernmental Panel on Climate Change.

Of course, the human cost of heat is just as important (if not more). There are obvious examples, such as workers who, as part of their job, are required to be outdoors, increasing the risk of heat stroke, heat exhaustion or even death. Between 1998 and 2017, more than 166,000 people died from heat waves, according to the World Health Organization.

It’s also not a problem that should go away anytime soon. Rising global temperatures increase the risk of extreme heat waves in the years to come, which will put even more pressure on power grids and challenge workers in ways that will be increasingly difficult to overcome.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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