Climate change: The effect of rainfall changes on economic production

An increase in the number of wet days a region experiences may lead to a reduction in economic growth, suggests a global study published in Nature. The findings highlight the potential negative impact that human-induced climate change could have on the global economy.

Changes in the Earth’s hydrological cycle are anticipated as a result of anthropogenic climate change. Water availability affects agricultural productivity, labour outcomes and conflict, and flash flooding can cause damage and impact economic output. However, rainfall changes are difficult to model or are assessed on a single country basis, making it difficult to estimate the global economic cost of rainfall induced by climate change.

Leonie Wenz and colleagues combined data on daily rainfall with subnational economic output for 1,544 regions across 77 countries over the past 40 years to model the impact of rainfall change on economic growth. The authors found that an increase in the number of wet days or extreme daily rainfall — the annual total of rain on days that exceed the 99.9th percentile of the distribution of daily rainfall between 1979–2019 — leads to a reduction in economic growth. They suggest that higher-income nations and the service and manufacturing sectors are most strongly hindered by increases in daily rainfall. Their analysis also indicates that droughts that differ from historical monthly means may lead to economic losses.

The authors argue that their findings demonstrate that our previous understanding of the economic effects of rainfall changes was incomplete. They conclude that further research is needed to quantify the impacts of future changes in rainfall on economic growth.