It’s only the middle of June, and large swaths of the country are already experiencing or preparing for major heatwaves. More than 70 million Americans are under extreme heat warnings, and temperatures in parts of the West have exceeded 100 degrees.
The Midwest and Northeast are the next two regions headed to the furnace.
During the winter months, we often hear about cold weather and snowstorms negatively impacting retail sales or other economic activities, but there is growing evidence that summer heat waves cause significant economic losses as well — and that their impact is increasing as the climate warms.
On a recent sweltering day, workers were repairing masonry work on the roof of the Emir of Jena’s building.
“And the chief contractor said, ‘During the hottest parts of the day, I’m not sending people to work,'” he said.
Gina, an assistant professor of public policy at the University of Chicago, said the contractor was concerned about health impacts on workers — and the potential for costly mistakes in the heat. So the crew took more time to finish the job.
“It might have taken two days, and it ended up only taking three or four days because they needed to stop,” he added.
This happens in many industries when temperatures become unbearable and working outside becomes unsafe.
“All aspects of the economy are slowing,” said Solomon Hsiang, a professor of public policy at the University of California, Berkeley.
He said the heat could lead to more accidents on the job. It can also increase health care costs, strain the power grid, reduce crop yields, and reduce overall economic output.
“The real challenge with this kind of slowdown is that we don’t usually see that we can catch up again,” he said.
After a heat wave, the economy can return to a normal baseline of productivity, but we often don’t make up for what we lose during hot weather, Hsiang said.
As more frequent and intense heat waves increase as the climate warms, this could have a lasting impact on the economy.
“Lots of small heatwaves can create this very large impact on overall economic performance over the long term,” he said.
We see that already. According to research from Dartmouth College, increasing heat waves have been eliminated by climate change At least $16 trillion of global GDP between 1992 and 2013.
Governments and companies are adapting by installing air conditioning in more warehouses and schools, putting in place warnings ahead of heat waves and reducing work hours when needed, said Justin Mankin, a professor at Dartmouth University who co-authored the paper.
“So you have to balance the cost of lost economic productivity with the costs of adaptation investments,” he said.
In general, he said, those investments are usually cheaper than the economic losses caused by the heat.
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