The current focus on heatwaves in the UK and Europe is casting a spotlight on one of the hidden costs of the failure to keep climate change in check – the loss of productivity.
The UK’s Office for National Statistics (ONS) estimates that hot days in Great Britain over the past few decades led to an average annual loss in Gross Value Added of £1.2 billion, rising to £5.3 billion or approximately 0.2% of GDP in 2020, when temperatures were particularly high.
Hot days are defined in this study as those where temperatures rise above 28 degrees Celsius. In these conditions, increased body temperature causes fatigue, reduced cognitive function, and difficulty concentrating.
The lower productivity that results from rising global temperatures means reduced wealth and standards of living for nations and individuals, and is of serious concern in UK, which already suffers from low productivity.
Worryingly, the impact on productivity of climate change is expected to rise dramatically, unless there is a serious effort to invest in mitigation.
According to a recent study by the Boston Consulting Group (BCG) if global warming increases by 3°C by 2100 this will reduce cumulative economic output by between15% and 34%.
While taking effective action to combat climate change is likely to be costly, BCG’s paper “Too hot to think, too cold to panic: Why Investing in Climate Action Makes Good Economic Sense” warns that net cost of inaction will be much greater.
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