El Niño, the natural warming of Pacific waters, can have a major impact on the global economy, causing trillions of dollars in damages around the world.
Warm water typical of El Niño moves through the Pacific Ocean
Ocean conditions that are precursors to the onset of El Niño have been captured by NOAA satellites in recent weeks.
The beginning of an El Niño weather pattern has been officially declared by federal forecasters, and there are signs it could become “very strong” and very costly.
In fact, El Niño, the natural warming of Pacific waters, could have devastating effects on the global economy, reaching trillions of dollars worldwide, and the current pattern is likely to continue as well.
For example, a 2023 study suggests that the 1982-1983 El Niño caused a global income loss of $4.1 trillion, and the 1997-1998 El Niño cost about $5.7 trillion.
“Current projections suggest this could be the most damaging El Niño on record,” said Justin Mankin, an associate professor of geography at Dartmouth who studies El Niño’s economic impact.
What impact will El Niño have on the global economy?
El Niño tends to slow global economic growth and cause trillions of dollars in losses, mainly due to the fact that it causes destructive weather patterns that affect agriculture, infrastructure, and supply chains.
Experts say El Niño causes widespread changes in weather and climate patterns in the years it occurs, resulting in a range of global disasters, including devastating floods, crop-killing droughts, decimated fish populations and an increase in tropical diseases around the world.
“El Niño significantly influences the world’s weather and climate patterns,” World Meteorological Organization Director-General Celeste Sauro said in a recent statement. “El Niño’s footprint extends far beyond its source in the Pacific Ocean, impacting agriculture, energy supplies, trade, water resources, supply chains and livelihoods across the region.”
How does El Niño damage stack up?
It is important to recognize that the trillions of dollars in losses are not primarily due to direct disaster damage. In his research, Mankin found that these events permanently inhibit economic growth long after they occur.
While El Niño-induced disasters such as droughts, floods, heat waves, and wildfires cause immediate damage, the following lasting costs arise from El Niño’s impact on the foundations of growth:
- Agricultural losses are carried into later seasons
- interruption of labor
- Schooling and early childhood development interrupted, emerging into the workforce years later
- Disruption to commodity markets and the transport sector
- Investments that never materialize due to shocks
How much damage will this El Niño cause?
“We know from observation that El Niño can cause trillions of dollars in damage and productivity losses to the global economy,” Mankin told USA TODAY. “These costs occur over many years and disproportionately impact countries whose weather and climate are most associated with El Niño.”
“We know that past El Niño events like 1997-1998 cost the economy more than $7 trillion by 2003.”
Mankin said the current cost of El Niño is estimated to be in the trillions of dollars worldwide, with more than $1.8 trillion in the United States alone by 2032.
Because we don’t know exactly how strong this El Niño phenomenon will become, we don’t know how much damage it will cause, he said.
Could this El Niño be the most damaging in history?
“Certainly in absolute dollar terms, current projections suggest this could be the most damaging El Niño on record,” Mankin said. “The current forecast is for El Niño to intensify above 2 degrees Celsius, so if El Niño goes well, it will be a very strong phenomenon.”
At the same time, he said, this phenomenon is having a bigger impact on the global economy than the previous El Niño event, and the damage will be even greater. Both of these factors make the 1997-1998 event more expensive than the 1982-1983 event. But the true total will not be known for many years, as losses increase over time while the probability and impact of more powerful events increases.
“In terms of its relative impact (for example, as a percentage of the current global economy), it really depends on how powerful this event ends up being.”
Specific impacts to be aware of
- Low rainfall is bad news for some crops. “El Niño is likely to have a negative impact on crop yields in Southeast Asia and India,” said Kyle Tapley, director of enterprise sales at Vaisala ExWeather’s Weather Desk. “El Niño is typically associated with below-normal rainfall.” Meanwhile, Indonesian rice farmers are racing to bring forward their annual planting schedule while battling the threat of this year’s prolonged drought. Malaysia’s economy minister has warned that El Nino could reduce crop yields by an average of 8% to 10% this year.
- I’m worried about the lack of fertilizer. “Super El Niño, coupled with the current Middle East conflict and associated fertilizer shortages, could have a synergistic effect on wheat, rice and corn, which are already at risk due to reduced availability of fertilizer during the planting season,” said Saskia van Ghent, chief sustainability officer at supply chain management company Blue Yonder, USA. said in an email to TODAY. “This will lead to short-term shortages and price increases, with long-term effects as these crops are used for animal feed and processed food.”
- Flooding is also a concern in some areas. “Flooding is predicted to increase during El Niño periods due to increased rainfall, which could reduce transport speeds and lead to increased travel costs,” Van Gent said. “In other regions, El Niño could exacerbate droughts and restrict waterways. In 2023-2024, El Niño reduced water levels and restricted traffic through the Panama Canal.”
I have good news. In some regions, El Niño has actually boosted agriculture, Van Ghent said, and “in some agricultural regions (eastern Brazil, Uruguay, Italy, Romania, and the Caspian Sea region), higher temperatures and increased precipitation could lead to higher crop yields.” “Historically, soybean yields have increased during El Niño events.”
And experts say the negative effects of El Niño won’t be felt right away. “While it typically takes months for crop disruptions to translate into higher retail food prices, consumers may experience early and compounded cost increases due to fertilizer shortages,” Van Ghent said. “The World Economic Forum predicts that the current fertilizer shortage will take six months to a year to impact food supplies.”
What is El Niño?
El Niño is a natural climate pattern in which ocean waters in the central and eastern tropical Pacific Ocean are warmer than average. El Niño and its counterpart La Niña can influence storms and weather patterns around the world, including hurricanes.
According to the National Oceanic and Atmospheric Administration, El Niños occur on average about every three to five years and can vary in intensity.
Here in the United States, El Niño causes wetter, warmer winters on the West Coast and milder hurricane season on the Atlantic Coast.
Contributed by: Reuters
Doyle Rice is a national correspondent for USA TODAY, focusing on weather and climate.
