Heat waves have burnt down trillions of dollars, and now they could destroy the global economy

First author and Ph.D. student at Dartmouth College, Christopher Callahan told IE, “We find that these effects are strongest in the warmest parts of the world because even a little bit of extreme heat in an already-very-warm place can push that place into really dangerous territory. Because the warmest parts of the world in the global tropics are also disproportionately low-income, we find globally unequal effects of extreme heat, with the most vulnerable places suffering the most.”

Heat waves have become a universal threat

When a heat wave hits a particular region, the media and industry experts often talk in terms of deaths, agricultural losses, and the future of our planet. However, the way these events influence the economy of nations and the lifestyle of the current generation is not discussed much. The researchers claim that the current study is among the earliest research works that specifically highlight the economic impact of heat waves on a global scale.

Reports previously published by some prominent organizations have also suggested patterns similar to those highlighted by the current study. For instance, the Atlantic Council estimates that the US economy suffers a loss of $100 billion every year due to heat waves. Another report from the World Economic Forum reveals that between 1980 and 2000, heat waves and greenhouse emissions accounted for a loss of $71 billion in 32 European countries.

The scariest part of this problem is that there is not one country or one continent which is being affected by heat waves. Although the intensity could vary, almost every part of the world is facing the same problem. This year in January, thousands of households in Argentina had to experience power cuts due to high temperatures.

In March and April, India witnessed the hottest temperature ever recorded in history, and between June and August, various parts of the US, China, the UK, and Italy also witnessed never-before-seen heat waves. Even at present, numerous cities in South Africa are on red alert due to the possibility of fire danger situations resulting from increasing temperatures.

All these facts and figures clearly indicated that there is an urgent need to take action against our heat wave problem. When asked how we can mitigate the economic impact of heat waves, Callahan explained, “The most important policy action we can take to reduce the impacts of extreme heat is to reduce greenhouse gas emissions. Global greenhouse gas emissions have already increased the intensity of heat waves globally and will continue to do so in the future.”

He further added, “This is especially a priority for high-emitting developed countries which have contributed the most to global warming. For lower-income developing countries, there is an imperative to reduce their own emissions, continue pushing high-emitting nations to contribute to global mitigation and adaptation efforts, and locally adapt to extreme heat.”

According to the researchers, the adaptation measures could include expanded investment in environment-friendly air conditioning, heat early warning systems, and conversion of public spaces into cooling centers during heat waves.

We must act now

One of the limitations of the current study is that while calculating the economic losses, the researchers didn't consider many other costs of warming that are also very damaging. Heat waves are also associated with droughts, for example, which may have additional costs.

Extreme temperatures can also cause losses to, for example, species (consider coral reefs dying during very hot periods) that do not show up in simple economic data. Therefore, the costs of warming are always going to be higher and a major finding of the current research is also that the costs of recent global warming are higher than what is realized in many reports.

Since the economic toll of global warming has already emerged across the world in the form of extreme heat, there is an urgent need for policies and technologies that could protect humans and the global economy from heat waves.

The study is published in the journal Science Advances.