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Climate-changed rainfall dampens economic growth » Yale Climate Connections

Climate-changed rainfall dampens economic growth » Yale Climate Connections

Climate economists face a problem when estimating the costs that climate change will cause to societies. They cannot incorporate into models climate damages that have been quantified and well-understood. Authors of a Recent studyPublished in NatureResearchers have discovered previously unknown economic impacts that rainfall changes can have on the economy.

While an increase in worldwide rainfall is a known consequence of global warming and of a hotter atmosphere’s holding more water vapor, most prior climate-economics modeling had concluded that this change will have an insignificant impact on economic growth. Researchers at the Naturepaper found that the previous studies, which had a lower-resolution global perspective, missed some important nuances regarding how local precipitation patterns might change.

One of the most important effects is the increase in extreme daily precipitation totals, which can cause flooding and disrupt economies. Precipitation “shocks” like particularly dry months also tend to significantly reduce productivity in a number of sectors. And most subtly, the researchers found that even a seemingly benign effect like an increase in the number of wet days in a particular region can create a drag on that region’s economic growth.

As a result, they concluded, “recent findings are unlikely to realistically capture future costs” associated with climate-changed rainfall. Their paper serves as a reminder that climate economics models that include only well-understood impacts on climate will likely significantly underestimate the human-caused costs of climate change.

More wet days and shocks to the system are drags

Despite the importance of reliable water availability, the authors noted, “most macro-economic assessments of the costs of climate change have found precipitation changes to affect economic growth rates insignificantly.” They investigated this apparent contradiction in more detail by examining daily local rainfall measurements and comparing them to regional economic output data.

In line with previous macro-level research, they found that higher annual rainfall levels modestly help the economy, particularly in drier locations. The authors also concluded that monthly precipitation “shocks” are bad for economies. Although relatively wet months had only minor negative effects, dry months were particularly detrimental to economic growth. “Drought away from these [rainfall] norms is inherently damaging,” they concluded.

The study authors also identified two additional economic consequences of rainfall changes that they believe have not been adequately considered. The first is an increase in wet days per year that causes slow economic growth in the region. Although this assessment may seem counterintuitive due to the fact that higher annual precipitation benefits the economy, the devil is in all the details. Contacted via email, study co-author Leonie Wenz explained:

The implication is that the ‘optimum’ amount of rainfall occurs when the rain is concentrated in the middle of the distribution – enough to provide ample [precipitation]In the annual total, but spread over a few of more intense (but still not extreme) days to ensure that there are a minimum of wet and extremely dry days. Seen in this way, it’s quite subtle.

The study authors did not investigate why an increase in the number of wet days would hamper the economy, but Wenz suggested, “It seems plausible that the mere presence of a rainy day can have a disruptive effect on businesses, construction, transportation etc.”

Floods are inequitable.

The second discovery was more intuitive. An increase in the frequency and severity of extreme rain events results in further reductions in economic growth rates. This is because flooding can disrupt daily activities and cause disruptions. Another article is available on this topic. Neue paperPublished in Nature Climate ChangeAccording to the study, flooding currently costs the U.S. approximately $32 billion per annum and is expected to rise to over $40 billion per annum by 2050 due climate change.

The Nature Climate ChangeStudy authors discovered that flood risks are highly unevenly distributed. Flood risks in today’s world are heavily concentrated in the poorest, most predominantly White communities (e.g. the Appalachians). In contrast, the rise in flood risks in the future decades will be disproportionately felt by Black communities, like those along the Gulf Coast. Rising sea levels and more powerful hurricanes combined with intensifying rainfall will increase flooding in this region.

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Current annual loss (AAL), from flooding in U.S. County. (Source: Wing et al. 2022Nature Climate Change
Projected increase in the average annual flooding loss in U.S. County between now and 2050 (Source: Wing et al. 2022Nature Climate Change

Change can be good – climate change usually isn’t

These studies show the dangers posed by climate change. Research has shown that more extreme weather, such as hurricanes, droughts, floods, and flooding, will have a detrimental impact on society in inequitable ways, especially for the most vulnerable. Climate change will also cause economic decline in subtler ways. Even though it may seem benign, changes such as an increase in the number or dry months can have a negative impact on overall productivity and slow down economic growth. Peter Gleick from the Pacific Institute, who was not involved in the study, stated it:

The worse climate change is, the more we know about it. This study shows that even positive effects can be overwhelmed by negative ones that result in more frequent and wider-ranging extreme events.

The Earth’s climate and weather patterns have remained The past 10,000 year period has been relatively stableThis will allow human civilization to grow. The climate’s ongoing instability is causing weather patterns shift in ways that pose many challenges to all species, including humans and their built infrastructure. This new research on shifting rainfall patterns supports the view that the more humans disrupt Earth’s climate, the more likely it is that larger drags on regional and global economies will result in ways climate-economics models currently are unable to capture.

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