Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Germany
Hong Kong
USA
Switzerland
Singapore
United Kingdom
Severe climate events cause significant damage to economies around the world and research by scientists from US-based Dartmouth College estimates that El Nino economic impact around the globe would amount to losses of $3 tn.
The authors Christopher Callahan and Justin Mankin place emphasis on how climate variability can affect economic growth. They combined climate variability and economic growth from 1960 to 2019 and compared GDP growth in different parts of the world before and after El Nino. Their study found that global economic growth was reduced by $4.1 tn in 1982-1983 and a powerful episode in 1997-1998 shrunk the world GDP by $5.7 tn.
The extreme weather brought by El Nino aggregated into a globally persistent macroeconomic effect. Consistent declines in growth after events suggest that there is a causal relationship between El Nino and depressions in economic growth, as per Callahan.
According to the UN’s World Meteorological Organisation, there is a 98% likelihood that at least one of the next five years will be the warmest on record. While the US Climate Prediction Centre said there is a chance beyond 90% that an El Nino will form later this year.
El Nino affects local weather from Australia to South America and other parts of the world. It influences the strength and speed of ocean currents, ocean temperatures and the condition of coastal fisheries. The periodic cycle of El Nino happens every two to seven years, however, in an unpredictable manner.
El Nino causes droughts in Australia and Indonesia while bringing rain to South America. As reservoirs dry up and rivers carry less water, these droughts pose a threat to the area’s water resources. Agriculture is in danger since it depends on water for irrigation.
El Nino economic impact on the East
According to Japan’s weather bureau, the equatorial portion of the Pacific is nearing experience the El Nino phenomenon, and there was an 80% chance that it would be visible by the summer in the northern hemisphere.
Drought has been a persistent concern in China. Over 3.5 million people had little access to drinking water as a result of the 2011 drought that devastated the Yangtze River. A total of 6.5 million hectares of land were threatened by the 2009 drought, which affected 60 million people. Droughts caused the country to suffer annual direct economic losses of an estimated $8 bn between 2004 and 2007.
India’s Ministry of Finance has said that the country could see lower agricultural output and higher inflation. The abnormal monsoon and increasing temperatures could take a toll on the economy.
Southeast Asia is more susceptible to the severe effects of El Nino. A special report by Intergovernmental Panel on Climate Change stated that Southeast Asia will suffer increasingly dry and hot conditions that will cause severe droughts and heat waves as global temperatures rise. The 1997-1998 El Nino brought droughts in the Philippines, Indonesia and Malaysia.
In Thailand, the second-largest rice exporter in the world, farmers are asked to cultivate just one crop this year rather than two as a potential El Nino threatens to reduce rainfall. Whereas, Malaysian authorities cited extreme weather as one of the top risks to the price outlook.
-reporting by Jovan Thomas
