“El Niño’s Trillion-Dollar Impact on Global Economy: What You Need to Know”

With an El Niño expected to develop in the coming months, new research shows that the naturally occurring climate pattern could cost the global economy trillions of dollars as its effects linger over years. The study, published in the journal Science, found that some of the most intense past El Niño events cost the global economy more than $4 trillion over the following years. As climate change could increase the frequency and strength of future El Niño events, the study authors project that global economic losses could amount to $84 trillion dollars by the end of the 21st century, even if current pledges to reduce carbon emissions are met. The impact will most burden lower-income nations.

About every three to five years, ocean temperatures in the eastern and central Pacific Ocean heat up, signaling an El Niño event, and create a domino effect of extreme weather across the globe. This can lead to above-average rain, landslides, drought, wildfires, floods, dying crops, tropical diseases, and plunging fish populations, affecting local and global economies.

Forecasters at the National Oceanic and Atmospheric Administration are anticipating a strong El Niño event later in 2023, as ocean temperatures have already hit record highs this year. The last El Niño in 2016 coincided with the hottest global temperatures on record, wildfires, and polar ice melt. The authors of the new study estimate that the 2023 El Niño event could hold back the global economy by $3 trillion over the next five years.

The study’s authors analyzed the growth in national gross domestic product per capita from 1960 to 2019, focusing on the years following El Niño events. They found that around 56 percent of countries experienced significant decreases in growth even five years after an El Niño event. La Niña events sometimes showed benefits in the global economy, but those increases were heavily outweighed by losses from El Niño events.

The two largest El Niño events over the last 60 years occurred in 1982-83 and 1997-98, resulting in losses of $4.1 trillion and $5.7 trillion, respectively, more than five years later. Most of the losses were felt by nations in closer proximity to the phenomenon, often developing or lower-income countries.

The study’s loss estimate for the 1997-98 El Niño was sometimes 100 times higher than previous estimates that did not account for cumulative losses in following years. Even the United States experienced about a 3 percent loss in income growth following these events.

The team projected that future El Niño events could lead to an $84 trillion loss from 2020 to 2099, even if current greenhouse gas pledges are met. Certain countries could experience higher costs and losses, with vulnerable populations being most affected.

While the study’s projections leave room for uncertainty, it emphasizes the need for both climate and emission mitigation efforts, as well as investment in adaptation and resilience initiatives. The economic toll of future El Niño events will depend on how nations reduce their greenhouse gas emissions and how climate models evolve.

Overall, the study sheds light on the significant economic impact of El Niño events and the importance of preparing for the potential consequences, whether they are severe or more subdued.