Intensified El Niño Phenomenon Could Lead to Trillions of Dollars in Costs for the Global Economy.

An El Niño event is expected soon and a recent study has found that the impact of this climate pattern could cost trillions of dollars to the global economy, with effects that could last for years. The study, published in the Science journal, estimates that some of the most intense El Niño events in history have cost the world economy over $4 trillion in the years that followed. With the frequency and intensity of El Niño events likely to increase due to climate change, the study predicts that global economic losses could reach $84 trillion by the end of the 21st century, even if current commitments to cut carbon emissions are met. Low-income countries will be hit hardest, as has typically been the case with such events.

Rising sea temperatures in the central Pacific region generate this phenomenon, with extreme weather patterns triggered around the world for up to a year. These include landslides caused by overwhelming rainfall, droughts in areas such as Indonesia and Southeast Asia, and devastating wildfires. North America may also be affected, with floods, crop losses, surges in tropical diseases and depleted fish populations impacting both local and global economies. NOAA forecasters expect a strong El Niño event in the second half of 2023, with ocean temperatures already reaching record highs this year, while a new study warns that the 2023 event could cap the global economy by $3 trillion over the next five years.

El Niño events have historically caused significant impacts on the global economy. The study reveals that about 56% of countries experienced a significant drop in GDP growth five years after the El Niño event, while losses due to two of the largest El Niño events in the last 60 years, which occurred in 1982-1983 and 1997-1998, totalled $4.1 trillion and $5.7 trillion respectively, despite occurring during financial crises that also contributed to the decline. Even when crises were excluded from the analysis, global GDP still fell significantly, with most of the losses felt in developing countries and low-income people. El Niño events are expected to cost much more than previously believed.

The study predicts that the economic losses due to future El Niño events could reach $84 trillion by the end of the century. This includes the vulnerable people across the planet. The study underscores the need to invest in climate change and emissions reduction efforts, as well as adaptation and resilience efforts. However, it leaves a lot of room for adjustment as it relies on models that depict the frequency and severity of future El Niño events, which are still flawed in many ways. It depends largely on how much countries reduce or reduce their greenhouse gas emissions.

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