Extremes in rainfall — whether intense drought or flash floods — can catastrophically slow the global economy, researchers report in the Jan. 13 Nature. And those impacts are most felt by wealthy, industrialized nations, the researchers found.
A global analysis showed that episodes of intense drought led to the biggest shocks to economic productivity. But days with intense deluges — such as occurred in July 2021 in Europe — also produced strong shocks to the economic system (SN: 8/23/21). Most surprising, though, was that agricultural economies appeared to be relatively resilient against these types of shocks, says Maximilian Kotz, an environmental economist at the Potsdam Institute for Climate Impact Research in Germany. Instead, two other business sectors — manufacturing and services — were the most hard-hit.
As a result, the nations most affected by rainfall extremes weren’t those that tended to be poorer, with agriculture-dependent societies, but the wealthiest nations, whose economies are tied more heavily to manufacturing and services, such as banking, health care and entertainment.
It’s well established that rising temperatures can take a toll on economic productivity, for example by contributing to days lost at work or doctors’ visits (SN: 11/28/18). Extreme heat also has clear impacts on human behavior (SN: 8/18/21). But what effect climate change–caused shifts in rainfall might have on the global economy hasn’t been so straightforward.