The economic impact of the merciless heat wave scorching southern Europe, the United States and much of the Northern Hemisphere may be short-lived in most places, temporarily closing tourist sites, forgoing outdoor dining and power surges. Use related to air conditioning.
But in the long run, the economic fallout from climate change is likely to be profound.
Devastating fires, floods and droughts dominate the headlines. Other insidious effects may cause less attention but can nevertheless take a toll. Extreme temperatures reduce labor productivity, damage crops, increase mortality, disrupt global trade and discourage investment, the researchers found.
An analysis by researchers associated with the Center for Economic Policy Research found that Europe, France, Italy, Spain, Romania and Germany have been hit hardest by climate-related disasters over the past 20 years. However, the countries of Central and Eastern Europe are the most affected by the weather problems.
Such developments add pressure on public spending as governments are called upon to replace damaged infrastructure and provide subsidies and relief. The analysis notes that tax revenues may shrink when climate change disrupts economic activity.
Economic losses related to climate change are expected to increase significantly in the future, according to European Union estimates, which noted that most member states have no mechanism to collect and assess economic costs.
Analysts at Barclays estimate that the cost of each climate-related disaster has increased by about 77 percent over the past half century.
Globally, losses widen. A study published last year attempted to measure the impact of human-caused heat waves on global economic growth, concluding that cumulative losses between 1992 and 2013 reached between $5 trillion and $29.3 trillion globally.
Poor countries in hot climates suffered the most. “Lower incomes reduce the ability of tropical economies to adapt to extreme heat increases,” the study said.
