A new study shared to “Database” by the Potsdam Institute for Climate Impact Research (PIK) and Columbia University has shown for the first time how enhanced connectivity of the global network of supply can amplify production losses and these losses can spread more easily across countries.
The study also revealed that the susceptibility of the global economic network to workers’ heat-stress has doubled in the last decade, lead Potsdam-Institute for Climate Impact Research (PIK) author Leonie Wenz said, as he explained that climate damages do not only depend on the warming of our planet, but also on the resilience of our societies and economies.
“Our study shows that, since the beginning of the 21st century, the structure of our economic system has changed in a way that production losses in one place can more easily cause further losses elsewhere,” Wenz said.
“What is self-evident for us today is really a phenomenon of the past two decades,” Wenz explained, adding that the study examined the example of local heat stress-related productivity reductions causing global effects.
“Across the world, production is interlinked,” he argued.
According to the PIK study, Supertyphoon Haiyan in the Philippines destroyed more than half the world’s production of coconut oil, which is one of the two most commonly used vegetable fats in food production worldwide.
The study also mentioned that the 2011 flood in Queensland stopped production in the fourth- biggest coal-exploration site on Earth for weeks, with economic repercussions well beyond Australia.
PIK and Columbia University researchers focused on the effects of small daily perturbations due to extreme temperatures that lead to heat-stress among workers in construction, agriculture and other economic sectors. “While single major shocks to economic networks like these illustrate how economic activity is globally linked, previous research showed that increasing temperatures decrease productivity because, for instance, workers get exhausted more rapidly,” the researchers said.
Combining data on temperature, population and the global economic network from 1991 to 2011 and based on existing research on temperature effects on workers, the scientists run computer simulations of heat-stress consequences in order to find out more about the network’s vulnerability to the propagation of production losses in each year.
The study covers economic flows between 26 industry sectors from mining and quarrying to textiles and wearing apparel, and to post and telecommunications, as well as final demand in 186 countries.
“With unabated climate change, the rise in global mean temperature will have severe impacts on natural and societal systems,” coauthor Anders Levermann said.
He pointed out: “To estimate the costs of future climate change, we need to assess global economic impacts of more frequent heat extremes and meteorological impacts, such as floods and tropical storms, and understand their relation to the economic network’s structure.”
“This is the basis for implementing appropriate adaptation measures in a warming world and with more intense weather extremes, it is likely that society needs to become more resilient and more flexible,” Levermann said.
He explained that links in global economic chains and world markets mean that extreme weather in one place can have repercussions elsewhere. For example, a combination of exceptional rainfall and Cyclone Yasi in 2010–2011 paralyzed the world’s fourth-largest region of coal exploration in Queensland, Australia. Cooking coal prices rose the following year by 25 percent. In 2011 droughts and floods in Russia, Pakistan and Australia caused global food prices to climb, possibly contributing to the escalation of civil unrest in Egypt, Syria and Saudi Arabia.
“Yet, the impacts of adverse weather on supply chains are missing from the assessments of the Intergovernmental Panel on Climate Change and, with a few exceptions, are being ignored in discussions around adaptation. This is a mistake. Adaptation requires a global strategy, not just local ones,” Levermann pointed out.
Stressing further, he said: “It is these unanticipated and sudden shocks from extreme weather events on global trade that are most disruptive for society; gradual changes can be foreseen and are easier to adapt to. Sitting in a bathtub with the tap running, it is easy to stop the floor getting wet, as the water rises by placing a few towels (up to a point).
“But the effect of climate change is like throwing rocks into the water. Our interlinked societies, the dynamics of which we are only beginning to understand, are like dominos lined up on the edge of the tub. One wave can make them all tumble.”
To reach the writer, e-mail cecilio.arillo@gmail.com.