A forthcoming heat wave poses a threat to France's economic expansion.
A new report by The Lancet Countdown 2022 reveals that the global economy could face a substantial impact due to heatwaves, with potential working hours lost and GDP growth reduced in affected countries.
The study warns of the temporary but significant material losses in developed countries and human losses in developing countries, particularly during extreme heat events. For instance, Europe as a whole is estimated to experience a GDP growth loss of about -0.5 percentage points (pp) due to recent heatwaves affecting Southern and Central regions.
Spain, which has experienced record-breaking temperatures, faces one of the highest estimated GDP losses at around -1.4pp. This is primarily due to direct productivity drops and severe impacts on crops like olives and grapes, as well as strain on water resources. Italy and Greece, also affected by heatwaves in the Mediterranean basin, face economic losses partly through reduced agricultural yields and disruptions in labor-intensive sectors such as tourism.
China is estimated to experience a heatwave impact on GDP of about -1.0pp, reflecting both direct labor productivity declines and potential disruptions in industrial production and agriculture. The United States is projected to face GDP growth reductions around -0.6pp due to heatwaves, reflecting widespread economic exposure and productivity losses.
Romania and other Eastern European countries also face agricultural productivity risks and infrastructure stresses from extreme heat events. While specific GDP loss figures are less cited, the study highlights the need for work hour adjustments in case of extreme heat.
The mechanisms of GDP impact during heatwaves include labor productivity drops, agricultural yield reductions, energy supply constraints, water resource stress, increased health-related costs and mortality, and tourism downturns.
Short-term warning and prevention can mitigate losses, but long-term structural adaptation is critical to reduce economic damage. This includes urban greening, adapting buildings and infrastructure, modifying working hours, and sector-specific climate adaptation investments to protect capital and labor productivity.
The report also warns against the misdirection of "productive destruction", which can give the impression that natural disasters related to heatwaves have a "positive impact on economic growth". The International Labour Organization (ILO) predicts that by 2030, the increase in heat stress will reduce the total number of potential working hours worldwide by 2.2%.
As temperatures continue to soar, with the formation of a new heat dome expected in Europe, it is crucial for countries to implement both short-term alert and prevention measures and long-term structural adaptation measures, such as accelerating urban greening and adapting workplaces to extreme heat, to minimise the economic impact of heatwaves.
- The impact of climate-change on the global economy, particularly through heatwaves, is a growing concern in environmental-science, as shown by the report from The Lancet Countdown 2022.
- The study reveals that several industries, such as agriculture and tourism, are vulnerable to heatwaves, leading to significant material losses and reduced GDP growth in developed countries, and human losses in developing countries.
- To mitigate these losses, it's essential for businesses and finance sectors to invest in long-term structural adaptation strategies, such as urban greening, adapting buildings and infrastructure, and modifying working hours in line with extreme heat events.
