Global warming is projected to have a serious negative impact on labor productivity this century. Here is a look at what we know.
In 2013, a NOAA study projected that “heat-stress related labor capacity losses will double globally by 2050 with a warming climate.” If we stay near our current greenhouse gas emissions pathway, then we face a potential 50 percent drop in labor capacity in peak months by century’s end.
Many recent studies project a collapse in labor productivity from business-as-usual carbon emissions and warming, with a cost to society that may well exceed that of all other costs of climate change combined. And, as one expert reviewing recent studies put it, “national output in several [non-agricultural] industries seemed to decline with temperature in a nonlinear way, declining more rapidly at very high daily temperatures.”
Here is the key chart from a 2010 Ziven-Neidell paper for the National Bureau of Economic Research, “Temperature and the Allocation of Time: Implications for Climate Change.” It plots “the number of minutes in a day that individuals (who work in outdoor or temperature-exposed sectors in the USA) spent working as a function of maximum temperature (in Fahrenheit) that day.”
Productivity starts to nose-dive at 90°F and falls off the cliff at 100°F.
As for the cumulative impact, here’s a key figure from the 2013 NOAA study, “Reductions in labour capacity from heat stress under climate warming.”
If carbon pollution remains unrestricted, we are risking catastrophic drops in labor productivity.
Andrew Gelman, director of the Applied Statistics Center at Columbia University, summed up the research this way in a 2012 post: “2% per degree Celsius … the magic number for how worker productivity responds to warm/hot temperatures.” The negative impact appears to start at about 26°C (79°F).
This loss of productivity is by no means the most life-threatening of climate impacts when compared to, say, Dust-Bowlification and its impact on food security. But it is one of the most important unmodeled climate impacts that makes the likely cost of climate change far higher than standard economic models suggest.
If we stay anywhere near our current path of carbon pollution emissions, then as we move towards the middle of the century, a larger and larger fraction of our summertimes will be intolerable outside.
In a 2011 post, “Mother Nature is Just Getting Warmed Up,” I discussed this trend and newly-released research forecasting permanently hotter summers:
The tropics and much of the Northern Hemisphere are likely to experience an irreversible rise in summer temperatures within the next 20 to 60 years if atmospheric greenhouse gas concentrations continue to increase, according to a new climate study by Stanford University scientists…
“According to our projections, large areas of the globe are likely to warm up so quickly that, by the middle of this century, even the coolest summers will be hotter than the hottest summers of the past 50 years,” said the study’s lead author, Noah Diffenbaugh.
It’s worth another look at projected days above 100°F on our current emissions path, via the National Climate Assessment (NCA):
Yes, absent a sharp and deep reduction in national and global emissions, much of Kansas (!) by century’s end could well be above 100°F for nearly the whole summer. Labor Day will mean a return to those pleasant mid-to-upper 90s.
By century’s end, much of the Southern U.S. will see temperatures above 90°F for five months of the year or more, which is just a stunning change from just the recent past (again via NCA):
It truly will be an endless summer over much of the South (see also NASA’s Hansen: “If We Stay on With Business as Usual, the Southern U.S. Will Become Almost Uninhabitable”).
So what does this mean for productivity? Prof. Solomon M. Hsiang wrote last year:
In my 2010 PNAS paper, I found that labor-intensive sectors of national economies decreased output by roughly 2.4% per degree C and argued that this looked suspiously like it came from reductions in worker output. Using a totally different method and dataset, Matt Neidell and Josh Graff Zivin found that labor supply in micro data fell by 1.8% per degree C. Both responses kicked in at around 26C.
Here is the key chart from Hsiang’s own work, which shows “national output in several [non-agricultural] industries … declining more rapidly at very high daily temperatures.”
Hsiang also directs us to a New York Times article in which a Japanese professor found that, indoors, “every degree rise in temperature above 25 Celsius (77 degrees Fahrenheit) resulted in a 2 percent drop in productivity.”
Thus, very different types of research using different data sets yield similar results. This research is essentially about adaptation — one key way that healthy people respond to high temperatures is simply to work less. NOAA notes an important caveat about its research, which tends to make the results conservative: “In focusing on the capacity of healthy, acclimated individuals, this study also severely underestimates heat stress implications for less-optimally acclimated individuals such as the young, old, and sick.”
Hsiang points out the bottom line:
It’s worth noting that reductions in worker output have never been included in economic models of future warming (see here and here) despite the fact that experiments fifty years ago showed that temperature has a strong impact on worker output (see here and here). In my dissertation I did some back-of-the-envelope estimates using the above numbers and found that productivity impacts alone might reduce per capita output by ~9% in 2080–2099 (in the absence of strong adaptation). This cost exceeds the combined cost of all other projected economic losses combined.
So the next time you see a projection of the economic cost from climate change — and a resulting social cost of carbon — you might want to double the numbers to get a more accurate picture of what we are risking by our callous inaction.