Global supply chains amplify economic costs of future extreme heat risk

Global supply chains amplify economic costs of future extreme heat risk

13 March 2024 | Yida Sun, Shupeng Zhu, Daoping Wang, Jianping Duan, Hui Lu, Hao Yin, Chang Tan, Lingrui Zhang, Mengzhen Zhao, Wenjia Cai, Yong Wang, Yixin Hu, Shu Tao & Dabo Guan
The study examines the socioeconomic impacts of heat stress on global supply chains, integrating climate, epidemiological, and economic models. It estimates the mid-century socioeconomic consequences of heat stress, including health costs, labor productivity loss, and indirect economic losses due to supply chain disruptions. The results show that global annual incremental GDP losses increase exponentially from 0.03% to 0.15% during 2030-2040 and 2050-2060, respectively. By 2060, total economic losses reach 0.6% to 4.6%, with health loss accounting for 37-45%, labor productivity loss for 18-37%, and indirect losses for 12-43%. Small- and medium-sized developing countries in South-Central Africa and West Asia are particularly vulnerable to health and labor productivity losses, while manufacturing-heavy countries like China and the USA suffer significant supply-chain disruptions. The study highlights the need for targeted risk governance and regional cooperation to mitigate the impacts of heat stress on global supply chains.The study examines the socioeconomic impacts of heat stress on global supply chains, integrating climate, epidemiological, and economic models. It estimates the mid-century socioeconomic consequences of heat stress, including health costs, labor productivity loss, and indirect economic losses due to supply chain disruptions. The results show that global annual incremental GDP losses increase exponentially from 0.03% to 0.15% during 2030-2040 and 2050-2060, respectively. By 2060, total economic losses reach 0.6% to 4.6%, with health loss accounting for 37-45%, labor productivity loss for 18-37%, and indirect losses for 12-43%. Small- and medium-sized developing countries in South-Central Africa and West Asia are particularly vulnerable to health and labor productivity losses, while manufacturing-heavy countries like China and the USA suffer significant supply-chain disruptions. The study highlights the need for targeted risk governance and regional cooperation to mitigate the impacts of heat stress on global supply chains.
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[slides and audio] Global supply chains amplify economic costs of future extreme heat risk