Destructive El Niño causes trillions of euros in damage. And we will probably have to deal with it again this year

El Niño and its colder sister La Niña alternate every few years. A ‘super El Niño’ is expected this year. This warm Gulf Stream has enormous consequences for the weather, nature and society. The economic damage of El Niño runs into the trillions.

A flow of unusually warm ocean water around the equator, stretching from South America to Asia, is causing changing weather patterns all over the world, although we notice relatively little of this here in the Netherlands. The United States and certainly the tropical countries in and around the Pacific Ocean are more affected. For example, the west coast of the United States is experiencing warmer, wetter winters and more flooding and extreme droughts are occurring around the world. Fish populations are also collapsing and more tropical diseases are emerging. In general, El Nino causes global warming. That is a major problem for many countries. American researchers have therefore estimated the effect of the recurring El Nino Southern Oscillationimpact (ENSO) on tropical developing countries and the global economy as a whole.

Astronomical amounts
The consequences of the ENSO effect are enormous and, in the case of a ‘super El Niño’ such as those that occurred earlier in 1972-1973, 1982-1983 and 1997-1998, last for years. The costs run into the trillions of euros and are therefore much greater than previously thought, according to the new study of economic activity in the world after the severe El Ninos of the early 1980s and late 1990s. There appeared to be a ‘recurring pattern’ of slowed economic growth in the following five years. This cost the global economy $4100 billion and $5700 billion respectively. The bulk of these astronomical amounts are accounted for by the poorest countries in the tropics. Even more extreme: the economic losses for the entire 21st century amount to some $84,000 billion. This amount is independent of the economic consequences of global warming due to greenhouse gases.

Years of effect
“We can say with certainty that the economies will not just take a hit and recover. The damage after El Niño can reverberate for up to fourteen years,” said lead researcher Christopher Callahan Dartmouth College. “In places where the effects of the natural phenomenon hit hardest, a recurring pattern of growth slowdown can be seen, which will last at least five years. The total picture has never been examined. For this it is necessary to include all ‘lost’ growth, not just the damage in the months that El Niño actually wreaks havoc.”

GDP losses from 1997-98 El Niño
The percentage loss of GDP due to El Niño in 1997-1998. Poor countries were particularly hard hit. Image: Chris Callahan

“It is good that people are focusing on climate change and the costs that result from it. But if you do not include the devastating effect of El Niño, you are still underestimating the problem and the costs of global warming,” said American researcher Justin Mankin. “Our well-being depends on the global economy, and the economy is again linked to the climate. If you ask how much climate change is costing us, you can start by calculating the ENSO damage. We show that the alternation of El Niño and La Niña costs an enormous amount of money and is responsible for years of stagnation of economic growth. That is why we have to adjust the costs considerably upwards.”

The poorest lose the most
The gross domestic product (GDP) of the United States fell by about 3 percent in the five years after the ‘super El Niño’ of 1982-1983 due to the natural phenomenon. The same happened between 1997-1998 and 2003. The consequences were even greater for tropical countries such as Peru and Indonesia: their economic growth was more than 10 percent lower due to the effects of the warm Gulf Stream in 1997-1998. “El Niño further exacerbates the gaps between rich and poor that are already created by climate change. The least resilient people are hit the hardest,” said Mankin.

Sad record
The probability of another El Niño starting at the end of summer is estimated at 80 percent. “And that at a time when sea water temperatures have never been this high. The last major El Niño was in 2016 and helped to make that year go down in the books as the warmest ever. Since then, global warming has only accelerated. In addition, the world is currently coming out of an extended La Niña period,” says Callahan. The two phases normally reinforce each other, so El Niño will also hit harder.

“It looks like a real ‘super El Niño’ is coming this year. If that happens, it will undoubtedly take a heavy economic toll. Tropical countries will suffer for up to ten years. El Niño is once again going to cause trillions of dollars in damage. I wouldn’t be surprised if another sad record is broken,” concludes Callahan.

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