The global economy may face a costly impact of trillions of dollars due to El Niño.

A new study, published in the journal Science, has found that the economic impacts of El Niño events are far more expensive and long-lasting than was previously thought. Scientists have stated that an El Niño event is currently taking place and could be more expensive than those previously experienced. El Niño refers to the temporary warming of the subequatorial Pacific Ocean, which causes droughts, floods, and heatwaves worldwide. The study tallied the global toll of these events, focusing on lasting economic scars rather than more immediate impact. However, some outside economists have disputed the damage estimates highlighted in the research.

The study authors say that the average cost of an El Niño event is $3.4tn. The El Niño event of 1997-1998 cost the global economy $5.7tn. By focusing on long-term economic consequences, the Dartmouth researchers who conducted the research were able to highlight areas of lost opportunity brought about by the need to divert spending to recovery and rebuilding. By simulating a world without El Niño, they were able to explore the economic impacts, relative to global GDP.

Whilst El Niño events tend to have the greatest impact in northern winters, in southern summers, hurricane activity in the Atlantic typically decreases. Areas that often become wetter, following El Niño events, include much of the southern and western United States, Uruguay, Argentina, parts of Southeast Asia, and parts of eastern central Africa. Areas that become drier include southeastern Africa, northern Australia, southern Asia, and the Amazon, often with an accompanying increase in wildfires. Most of Asia, the Pacific Northwest of the United States, and Australia are likely to experience warmer weather.

The last strong El Niño event occurred in 2016, with such events occurring on average every three to five years. The study argues that understanding economic damage caused by El Niño events is of great importance in comprehending the larger scale impacts of human-induced climate change.

The study suggests that the global economy is poorly adjusted and adapted to climate change, and that the world is unprepared for worsening climate-related damage. Dartmouth’s study finds that trillions of dollars of economic output have been lost worldwide. Economist Gary Yohe, however, argues that the Dartmouth estimates are too high, describing them as unreliable. Other climate scientists have praised the study’s findings.

The economic impacts of El Niño events are particularly difficult for poorer countries to bear. If the upcoming event is as strong as those previously experienced, it could cause damage that lasts for years, particularly in the global south.

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