At the end of 2006, the British economist Nicholas Stern delivered a report that marked a turning point on the issue of climate change. He asserted that, if the cost necessary to achieve carbon neutrality in 2050 was ” significant “, that of doing nothing and letting global warming run wild was much higher. To the obvious environmental arguments for tackling rising global temperatures, he added an economic dimension: in the long term, the price of action would be lower than that of inaction.
Almost two decades later, with the planet having just experienced the hottest June and July in modern history, and ocean temperatures also hitting a record high, Allianz economists have been looking at the cost of the heat waves that hit the United States, China and southern Europe between 1er May and August 4.
They conclude that the world’s gross domestic product (GDP) lost 0.6%. China is particularly affected (1.3% of GDP evaporated), the United States much less (0.3%). Europe is in between: Greece and Spain respectively dropped 0.9% and 1% of GDP, ahead of Italy (0.5%) and France (0.1%) .
By Allianz’s own admission, these calculations are approximate and incomplete. They do not take into account the cost of natural disasters, such as forest fires, droughts or severe floods that have accompanied them. They focus only on the well-known effect of heat on productivity: a day that is too hot is likely to slow down a construction site, or even lead to its temporary closure. The same situation occurs on farms, where working conditions can become unbearable. However, employees who work in non-air-conditioned places are less efficient…
“The equivalent of half a day of strike”
Many studies have quantified this phenomenon and the economists of Allianz take up in particular one, carried out in the United States in 2021, which underlined that each day at more than 90 degrees Fahrenheit (32 ° C) caused a loss of 0.04% of wages. “It’s the equivalent of half a day of strike”notes Ludovic Subran, chief economist of Allianz.
By extrapolating this result to the number of days that have exceeded 32°C in the United States, Europe and China since the 1er May, the experts come to their conclusion of 0.6% of lost GDP. “Part of this growth will be caught up in the coming months, for example with construction sites that will be finished later, tempers Mr. Subran. But not everything: lost agricultural production, in particular, will never be recovered. In total, maybe 0.3% or 0.4% of GDP will not be recovered. »
You have 51.54% of this article left to read. The following is for subscribers only.