Climate Change-Driven Heat Waves Have Cost Global Economy Trillions Since the 1990s

Climate models and previous research have included heat waves among other extreme events resulting from climate change, such as more frequent flooding and greater storm intensity, Callahan says. But heat waves have a unique signature, he said. They occur on shorter timescales than droughts and the temperatures of the hottest days of the year are projected to increase much quicker than the global average temperature as human activity continues to drive climate change.

“Heat waves are one of the most direct and tangible effects of climate change that people feel, yet they have not been fully integrated into our assessments of what climate change has cost and will cost in the future,” Callahan said. “We live in a world that has already been altered by greenhouse gas emissions. I think our research helps demonstrate that.”

The study results underscore issues of climate justice and inequality, Mankin says. The economic costs of extreme heat—as well as the expense of adaptation—have been and will be disproportionately borne by the world’s poorest nations in the tropics and the Global South. Most of these countries have contributed the least to climate change.

The researchers found that while economic losses due to extreme heat events averaged 1.5% of gross domestic product per capita for the world’s wealthiest regions, low-income regions suffered a loss of 6.7% of GDP per capita.

Furthermore, the study revealed that to a certain point, wealthy subnational regions in Europe and North America—which are among the world’s biggest carbon emitters—could theoretically benefit economically by having periods of warmer days. The economies of other principal emitters such as China and India would be harmed by a greater intensity of extreme heat events given their regional baseline temperatures, the researchers found.

“We have a situation where the people causing global warming and changes in extreme heat have more resources to be resilient to those changes, and, in some rare cases, could benefit from it,” Mankin says. “It’s a massive international wealth transfer from the poorest countries in the world to the richest countries in the world through climate change—and that transfer needs to be reversed.”

In July, Mankin and Callahan published a paper in the journal Climatic Change that assessed the economic damages individual countries have caused to others by their contributions to climate warming. The study presented the scientific basis nations need to assess their legal standing for claiming economic damages due to emissions and warming.

In this latest publication, Mankin and Callahan indicate that the world’s principal emitters should foot large portions of the bill for adapting to extreme heat events, in addition to helping lower-income nations develop low-emission economies. In the global economy, sharing the costs of adaptation measures would benefit wealthy and developing nations alike, Mankin said.

“Almost no country on Earth has benefitted from the extreme heat that has occurred,” Mankin said. “Global events like the COVID-19 pandemic have revealed the close interconnectedness of the supply chain and the global economy. Low-income countries have disproportionate numbers of the outdoor workers who often generate the raw materials so crucial to the global supply chain—there is absolutely the potential for upward ripple effects.”