Fwd: How extreme heat torches GDP

[Loretta Lohman]

India shows why economies are suffering  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

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Extreme heat is impacting growth in some of the world’s fastest developing economies, and there’s no more important example than India, where millions of workers in construction to manufacturing spend hours either outdoors or in sweltering facilities that lack adequate cooling. Today’s newsletter examines the mounting economic risk posed by the nation’s scorching temperatures, and we also assess another potential threat to productivity and prices — an El Niño weather phenomenon forecast to become one of the strongest on record. Subscribe to Bloomberg to get unlimited access to all our stories. Too hot to work By Anup Roy and Shruti Srivastava In the scorching heat of Kanpur, the center of India’s leather industry, workers move slowly and deliberately as temperatures hit 46C (115F). Outside the H. Rehman Tanning Industries plant, young men hang strips of buffalo hide on makeshift drying racks, their heads wrapped in white cotton cloth against the sun. At the nearby factory of AKI India Ltd., the air is stifling despite the thrum of giant fans, as workers feed sheets of leather through pressing machines and stack them on the concrete floor. A man cools himself with water during hot weather in Allahabad, India. Photographer: Ritesh Shukla/Getty Images AKI Chief Executive Officer Asad K. Iraqi has his 100 workers drink oral rehydration salts solution twice a day, and he recently invested in additional cooling systems. But it’s not enough. Some workers are falling sick, while others are returning to their villages. “My productivity is down 40%,” Iraqi says, his brow glistening with sweat. “Workers can’t survive in this heat without proper hydration and cooling.” It’s a scene playing out across India as summers become increasingly unlivable. Heat and humidity have been rising for years, and on any given day last month, the vast majority, sometimes all, of the world’s 50 hottest cities were in India. The impact is showing up across the economy, from operating costs to inflation and power demand. In April, the federal government issued a heat advisory directing businesses to reschedule working hours, provide hydration breaks and rest areas, and slow the pace of work. Schools, most of which don’t have air conditioning, closed for summer vacations weeks earlier than usual in several states or revised timetables and shifted classes online. “The impact of heat is like death by a thousand cuts,” says Aditya Valiathan Pillai, a visiting fellow at the Sustainable Futures Collaborative think tank in New Delhi who researches climate adaptation, citing the hit to productivity. India is emerging as one of the clearest examples of how extreme heat can become a structural economic constraint, particularly for developing economies dependent on physical labor. Unlike richer countries where growth is increasingly driven by services and indoor work, large parts of India’s economy — from construction and manufacturing to agriculture and logistics — still rely on millions of workers spending long hours outdoors or in poorly cooled environments. Lost labor from rising heat and humidity could jeopardize 2.5% to 4.5% of India’s gross domestic product by 2030, according to a 2020 study by the McKinsey Global Institute. A University of Chicago study published in 2021 found factory output in India fell by about 2% for each 1C rise in temperature amid reduced worker productivity and increased absenteeism. The Lancet Countdown on Health and Climate Change estimated that 247 billion potential labor hours were lost in India due to heat exposure in 2024, an increase of 124% from the 1990-99 annual average. For Mumbai-based labor contractor Taposh Dey, soaring temperatures are reshaping construction work schedules. Outdoor work is routinely pushed to early mornings or late evenings, while developers who once planned mainly for monsoon disruptions are now also accounting for heat. “The 1 p.m. to 4 p.m. window is the most challenging, with labor fatigue, dehydration and safety risks forcing work to slow down or shift to later hours,” says Deben Moza of real estate advisory Knight Frank India. For Soumya Swaminathan, former chief scientist at the World Health Organization, working conditions themselves must improve. “We need more shaded areas, access to water, mandatory rest breaks and awareness campaigns so workers recognize early warning signs of heat stress,” says Swaminathan, who was last month named a fellow of the Royal Society, the UK’s national academy of sciences. A spokesman for the Ministry of Labor and Employment didn’t respond to an emailed request for comment. Almost half of the global population will be living with extreme heat by 2050 if the world reaches 2C of global warming above preindustrial levels, according to a University of Oxford study published in January. India will have the largest affected population, says urban climatologist Radhika Khosla, an associate professor who co-authored the study. “We know the impacts will be severe, and they are here already,” Khosla says, adding that India needs long-term urban planning focused on cooling and shade. Read more Lost productivity 247 billion The number of potential labor hours lost in India due to heat exposure in 2024, according to the Lancet Countdown on Health and Climate Change. Struggling staff “We can see the terrible effect it’s having on the health of our workers.” Abhinandan Jain Owner of Abhinandan Steels in New Delhi, where output has fallen 25% to 30% over the past two months El Niño’s economic threat By Lauren Rosenthal The last time El Niño emerged from the tropics, in 2023, nearly every corner of the economy felt its impact. Candy-bar makers reduced the amount of chocolate in their offerings, after drought in West Africa triggered higher cocoa bean prices. Some transatlantic flights got longer and others got shorter and bumpier, altering fuel consumption. Even soap prices bubbled up, as key ingredients became harder to source. The effects of the El Niño that just arrived threaten to be far worse. The US Climate Prediction Center said on Thursday the conditions, which it calculates emerged in May, will continue gathering strength and peak over the winter, raising the risk of punishing heat waves, severe drops in rainfall and devastating deluges in various corners of the world. That doesn’t bode well for governments, businesses and households already struggling with higher inflation linked to the US and Israel’s war in Iran. Flooding in northern Peru during a hyperlocal coastal El Niño in 2017. Photographer: Ernesto Benavides/AFP/Getty Images Even before the CPC declared the event’s official arrival, the US Department of Agriculture had said it sees domestic food prices increasing by as much as 4.7% in 2026 from a year earlier, the biggest leap in three years. For products made from sugar and cocoa — the two crops most at risk from El Niño droughts, according to Marex Group, a financial-services firm in London — the USDA expects prices to jump as much as 8.4%. The last time the world faced such a strong El Niño, in 2015 and 2016, the result was more than $7.8 trillion in lost productivity, based on a Dartmouth College study, with the economic effects continuing to ripple for years afterward. El Niño — or “the child” in Spanish, named for baby Jesus because Peruvian fishermen in the 1600s first noticed the phenomenon around Christmastime — is a weather pattern that occurs with sustained warming of Pacific Ocean surface temperatures. Trade winds weaken and sometimes even run backward, which in turn further increases the temperature of the ocean. This leads to patterns of high and low pressure that translate into excessive rains in some parts of the world and drought in others. It’s a normal, cyclical event that used to come and go with little fanfare, except in the rarest of years. Climate change — which loads the atmosphere with additional heat and moisture — can amplify its impact. In fact, forecasters have had to change their methods for measuring El Niño to account for the oceans getting significantly hotter. On the new scale, this episode looks as though it will be, at its peak, nearly or equally as strong as major outbreaks in the early 1980s and late ’90s, making it one of the most significant events in modern history. Some forecasters are going so far as to call it a “super” El Niño. “The simple thing I say is: Expect more volatility with an El Niño,” says JPMorgan & Chase Co.’s global head of climate advisory, Sarah Kapnick, and not just in areas we think of as traditionally vulnerable. Read more Technology transit By Azman Usmani Global efforts to transition away from fossil fuels are running into a new challenge: clean energy equipment is getting more complex, hazardous and too big to transport easily. The complexity of moving giant wind turbine components or batteries that carry fire risks is a challenge for a new energy business which logistics giant DHL Group expects to see grow revenue to €3 billion ($3.5 billion) by 2030 from about €600 million last year, according to Chief Executive Officer Tobias Meyer. Wind turbine blades. Photographer: Darren Staples/Bloomberg “Large wind turbines now have blades of astonishing dimensions,” Meyer told reporters Thursday, speaking on a video briefing from Amsterdam. “These large cargoes create high wind loads for vessels, require stacking and specialized rigs to transport, as they are also quite vulnerable.” Dongfang Electric Corp. last year began production of a 26-megawatt wind turbine with blades measuring 153 meters (502 feet), while Ming Yang Smart Energy Group has worked on a mammoth, two-headed 50-megawatt model. Manufacturers are developing giant rotors, which capture more energy, to expand sales into markets with low wind speeds — though installing the super-size equipment typically requires specialized trucks and wide roads. Rising battery demand, including from the booming stationary storage sector, is propelling exports of lithium-ion cells. Yet moving the components can be logistically complex: any unit over 35 kilograms (77.2 pounds) is classified as dangerous goods because of the potential fire risks. Compounding that hazard is a fragmented web of international aviation rules, making the air transport of large batteries the industry’s “single largest gap,” Meyer said. Keep reading This week’s Zero Zero Ben Cohen Regrets Making Ben & Jerry’s Public Ben & Jerry’s isn’t just known for ice cream, but also its support for social causes. With over $1 billion in sales last year, it’s an asset for its owner Magnum. So why has one of its founders quit, and the other launched a campaign to make Ben & Jerry’s independent? Bloomberg’s Akshat Rathi sits down with co-founder Ben Cohen to ask about the Free Ben & Jerry’s campaign, why businesses should pursue social causes, and the future of ice cream on a warming planet. Listen now, and subscribe on Apple, Spotify or YouTube to get new episodes of Zero every Thursday. More from Green Scientists Urge Countries to Look Beyond CO2 to Tackle Warming Some “indirect” greenhouse gases play a larger role than previously understood.  Chinese Region Promotes Coal Chemicals as Energy Security Fix The practice poses a rising threat to the country’s climate goals. Why Your Summer Tomatoes Cost So Much Prices are soaring after crop losses in Mexico and Florida, offering a glimpse of how climate disruptions could make food inflation longer lasting. More from Bloomberg Business of Food for a weekly look at how the world feeds itself in a changing economy and climate, from farming to supply chains to consumer trends Energy Daily for a daily guide to the energy and commodities markets that power the global economy Tech In Depth for analysis and scoops about the business of technology Explore all Bloomberg newsletters. We’re improving your newsletter experience and we’d love your feedback. If something looks off, help us fine-tune your experience by reporting it here. Follow Us You received this message because you are subscribed to Bloomberg’s Green Daily newsletter. If a friend forwarded you this message, sign up here to get it in your inbox. Unsubscribe Bloomberg.com Contact Us Bloomberg L.P. 731 Lexington Avenue New York, NY 10022 |