Record temperatures are decreasing viable working hours for labor forces in South East Asia and pose a risk of $2 trillion in economic climate-related damages worldwide by 2030, a recent United Nations report states.
2016 is on track to surpass 2015’s standing as the hottest year in recorded history. The world is already experiencing the impacts of climate change as unprecedented heat and drought plague India’s farmers with famine and restrict working hours by 15 to 20 percent in other hot spots, the U.N paper said.
Industries and workers in construction, mining, agriculture, lumber and other outdoor sectors will be most affected, while indoor work forces that enjoy the comfort of climate controlled environments are unlikely to experience productivity losses.
The report speculates that demand for air conditioners and related products will follow rising temperature trends, which will likely increase demand for energy in impacted regions. Bloomberg points out that the report estimates a city as big as Bangkok – with roughly 10 million people – could require an additional two gigawatts of power capacity – that’s a facility the size of the Hoover Dam – for every 1.8 degree Fahrenheit (one degree Celsius) temperature increase.
Although their emissions marginally contributed to causing climate change, poor and middle-income countries will bear the bulk of heat-related economic damages. Wealthier nations, with the largest current and historical greenhouse emissions, will avoid most of these losses, the study found. More extreme winters could cause some losses in GDP for countries like Russia and Norway.
Between 1980 and 2012, over two million people died in more than 20 thousand natural disasters, collectively costing the global economy over $4 trillion. The cost of these disasters has been steadily increasing over time.
For over a decade, the insurance and reinsurance industries have accounted for climate change-related risks when pricing insurance premiums; however, credit rating agencies are just beginning to incorporate climate vulnerability assessments into solvency considerations for corporate and government issued securities.