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I’ve become reasonably immune, for better or worse, to most mind-numbing headlines. They seem to happen daily. The full list of issues that make up my daily media feed has been overflowing with disheartening news as we humans seem to gorge ourselves on an assortment of conflicts and controversies.
But two weekend headlines stopped me: record temperatures in India blow up toxic landfills as the country grapples with heatwaves, and a 17-story ‘mountain’ of garbage spontaneously burns for the Indian heat wave.
I don’t know which part of these titles I found more jaw-dropping – the 17-story dump, the toxics embedded in it, or the spontaneous combustion of the whole shebang. Without doubt, all of the above. Whatever the reason, it’s a harbinger of things to come.
In recent years, excessive heat attributed to climate change has gone from hypothetical to horrifying, as temperatures rise around the world. Impacts on health, crops, power grids, water supplies and other critical elements of human existence are also increasing. The same is true for impacts on company facilities, supply chains, employees and customers.
Welcome to heat as a new risk factor.
Despite the growing attention associated with the oppressive heat, most indications show that businesses and economies have not yet warmed to the risks.
In India last week, temperatures soared above 104 degrees Fahrenheit and are expected to reach 111 degrees over the weekend. Scorching temperatures put more than a billion people at risk for heat-related health impacts, scientists say. The heatwave is also causing power and water shortages in India, Bangladesh and Pakistan.
India hoped to take advantage of Russia’s war against Ukraine to boost its wheat exports. A few weeks ago, Prime Minister Narendra Modi boasted that Indian wheat could “feed the world”. But a scorching March and the hottest April in a century turned Modi’s vision into toast.
India is not alone: the climate crisis is contributing to worsening extreme weather events, including hotter and longer heat waves and prolonged droughts, with profound implications for businesses and economies. Over the past year, we’ve seen extreme heat in the Pacific Northwest of the United States and western Canada, where hundreds of people are believed to have died from the heat. Record temperatures in the North West last summer took a heavy toll on the economy, with businesses in the region – many still recovering from coronavirus shutdowns – shutting down, often to keep employees safe. California heat waves gave Hobson’s farmhands the choice of working in triple-digit temperatures or not getting paid. Last summer brought record-breaking heat to southern Europe, contributing to an estimated 2,300 “excess deaths” in Greece alone. In March, more than half of Mexico experienced temperatures above 104 degrees.
And the manifestations of climate change are just beginning. Last year, a UK government agency concluded that at 3 degrees F of warming (we’re currently at just over 1.8 degrees), the number of people affected by extreme heat stress – a life-threatening combination of heat and humidity – could be multiplied by fifteen. , from 68 million today to around 1 billion worldwide. A rise of 4 degrees could affect “nearly half of the world’s population”.
Despite the growing attention associated with the oppressive heat, most indications show that businesses and economies have not yet warmed to the risks. The economic disruption ahead could be significant.
Take energy, for example. According to the Center for Climate and Energy Solutions:
Warmer temperatures are affecting many aspects of the US energy system, including generation, transmission, and demand. While higher summer temperatures increase the demand for electricity for cooling, at the same time they can reduce the ability of transmission lines to carry electricity, which can lead to electricity reliability issues like power outages during heat waves. Although warmer winters will reduce the need for heating, modeling suggests that total US energy consumption will increase in a warmer future. Also, as rivers and lakes warm, their ability to absorb waste heat from power plants decreases.
Or agricultural. In California, where excessive heat is taking its toll on farmworkers, a study has found that the number of hazardous workdays for farmworkers will double by mid-century. Florida, which experiences both high heat and humidity, could be dangerous for entire growing seasons. Miami-Dade County recently became the first jurisdiction in the world to appoint a heat officer to lead on climate and extreme heat issues.
The suffering and carnage, along with the economic toll, is beginning to attract the attention of regulators, insurers and others.
Last year, ratings agency Moody’s listed how the climate crisis poses physical risks to certain sectors. “Based on an analysis of over 5,000 publicly traded companies and their approximately 2 million underlying facilities, heat stress and water stress threaten the greatest proportion of assets across all industries, with multifaceted impacts on human health, resource demand and operations,” he said.
Moody’s has identified manufacturing, transportation and warehousing, utilities, food, mining and construction as the sectors most vulnerable to heat hazards. In the food sector, for example, between 55% and 60% of installations in the sector present a risk of “lowest exposure” to heat stress.
There are good reasons to worry on Wall Street. Research from the University of California, Davis concluded that extreme hot weather spells drive down market value, especially in the southern and southeastern United States. The researchers found that stock markets suffered a loss of 0.42% in the first 20 days after the start of a heat wave and around 0.68% during longer heat waves. Investor losses reached 1.38% for more expensive events. The most exposed companies lost 1-2% of their market value.
Of course, the most devastating impacts are usually for employees. Last month, the Biden administration announced a new heat-illness prevention campaign and enforcement program. It is also developing a national heat stress standard for workers. Currently, only California, Minnesota and Washington State have such standards.
Attention to heat is long overdue. And while one might question the wisdom of treating the symptom (excessive heat) and not the disease itself (climate change), we need to do both, and quickly. As we head into another summer season in the Global North, with its attendant wildfires, droughts and scorching heat, businesses will need to prepare their facilities, supply chains, workforce and infrastructure.
It’s a warming world, and we all have to deal with it.
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