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The Looming El Niño Could Cost the World Trillions of Dollars

Looming El Niño waves may present socioeconomic implications all over the world.
Looming El Niño waves may present socioeconomic implications all over the world. Credit: Jon Sullivan / Wikimedia Commons / Public Domain

The Pacific Ocean has moved away from La Niña conditions, which occur when a long band of cold water forms near the coast of South America. Now, it is heading towards a different phase called El Niño, where a warm band appears instead.

Scientists predict that El Niño will happen in the next few months, and there is a 55% chance that it will be a particularly strong occurrence. This shift has the potential to raise global temperatures beyond the warming threshold of 1.5 degrees Celsius set by the Paris Agreement.

Moreover, it will impact weather patterns worldwide, leading to severe droughts in some regions and intense rainfall in others.

Economic consequences of El Niño

Researchers are warning about the economic consequences that could unfold in the coming years. They predict a staggering $3 trillion loss, affecting various nations, particularly low-income tropical countries.

The findings, published in the prestigious journal Science, indicate that previous El Niño occurrences in 1982-83 and 1997-98 resulted in global losses amounting to $4.1 trillion and $5.7 trillion respectively.

These financial setbacks continued for more than five years even after the climatic events had subsided. Looking ahead, it is projected that by the end of this century, the cumulative economic toll of El Niños could reach a staggering $84 trillion.

The University of Sydney agricultural economist David Ubilava, who studies the economic impacts of El Niño, explains that these countries have comprehensive policies in place to mitigate the adverse effects of weather shocks on farmers.

However, the situation is quite different in most low- and middle-income countries, where such safety nets are not as robust.

Tropical countries can bear the brunt of the consequences

As the waters of El Niño warm up in the Pacific Ocean, it is tropical countries that bear the brunt of the subsequent consequences. Peru, in particular, tends to experience intensified rainfall during an El Niño event, leading to damaging effects on infrastructure and waterlogging of crops.

Typically, the upwelling process near Peru’s coastline brings up essential nutrients that sustain fisheries. However, this natural churning process slows down during El Niño. Furthermore, marine heatwaves associated with El Niño events result in the depletion of fish populations, depriving local communities of an important source of income.

However, as El Niño extends further east, it can have contrasting consequences. In the Amazon rainforest, which has already suffered from human development and fires, El Niño can trigger severe droughts.

Challenges faced by the Pacific Ocean

The opposite side of the Pacific Ocean could also confront the challenges of drought. According to Callahan, an expert in the field, countries like Indonesia and Australia are expected to experience dry conditions, which can have severe economic consequences.

A striking example is the El Niño event in 1998, where extensive wildfires ravaged Southeast Asia, particularly in Indonesia. The combination of drought and elevated temperatures created the perfect conditions for these devastating wildfires.

Notably, Indonesia possesses vast areas of carbon-rich peat, notorious for its resistance to extinguishing once ignited. As a result, wildfires in this region have the potential to significantly increase carbon emissions, contributing to the acceleration of climate change.

Timing and severity of El Niño

Scientists are unable to precisely determine the timing and severity of El Niño occurrences, as well as the exact changes in rainfall patterns for specific countries in the upcoming year. Therefore, predicting the impact of an El Niño-induced drought on rice harvests in Asia, for example, is impossible with certainty.

Given this uncertainty, it becomes even more crucial to initiate international aid planning for low-income countries as early as possible, as suggested by Ubilava.

Starting preparations even a few months in advance can yield significant positive effects in the future, considering the higher likelihood of suffering in these countries.

An El Niño event acts as a stress test for our warming planet, given that climate change intensifies heatwaves, wildfires, droughts, and rainfall patterns. However, it also presents an opportunity for governments to enhance their preparations for extreme weather events.

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