A person carrying an umbrella walks through a rainstorm.
Credit: Emmanuelkwizera, CC BY-SA 4.0

New research has suggested that a country’s economic output sags on soggy days.

A higher number of rainy days and more extreme daily rainfall deflate economic production worldwide, the latest work found.

High-income countries are the hardest hit by daily rainstorms because the bedrock industries of their economies—manufacturing and service—are sensitive to daily deluges. Low-income countries that rely on agriculture are still affected but to a lesser degree.

“When extreme daily rainfall increases, it’s bad for the economy.”

The analysis compared daily rainfall with the economic growth of more than 1,500 subnational regions from 77 countries over 40 years.

“When extreme daily rainfall increases, it’s bad for the economy,” said Ph.D. student Maximilian Kotz at the Potsdam Institute for Climate Impact Research in Potsdam, Germany, who led the research. “We know quite clearly from the climate science that this aspect is increasing globally.”

The United Nations climate report released last year projected that climate change will worsen extreme weather in the future: Precipitation events that happen only once every 10 years will be approximately twice as likely in a 2°C warmer world.

The study is the first to identify the daily effects of rain on economic output and suggests that costs from climate change may be higher than previous estimates.

Gauging Rain’s Consequences

Previous work by Kotz found that temperature variability from one day to the next reduces macroeconomic growth.

“Days with any considerable amount of rainfall constitute suboptimal economic conditions.”

The latest work found a similar connection between daily precipitation patterns and economic production. An increase in days with more than 1 millimeter of rain—a relatively small amount—showed a strong reduction in the rate of economic growth. “This suggests that days with any considerable amount of rainfall constitute suboptimal economic conditions,” wrote the authors in Nature. The relationship held even for days with just 0.1 millimeter of rain.

Days with very high amounts of rain—exceeding the 99.9th percentile of data spanning 40 years—further dampen growth.

Extreme rain disrupts daily life by washing out roads, flooding buildings, and causing power outages. Global economic losses from river floods will grow by 17% over the next 20 years without large-scale structural changes, according to a letter written by two of Kotz’s coauthors in the journal Nature Climate Change.

Key industrial regions at high latitudes around coastal and mountain regions are the most vulnerable to extreme weather, wrote the authors. These include the coastal United States, central Europe, China, Korea, and Japan.

Kotz isn’t sure why days with low or average rain would still hurt production. “It’s not something that’s being considered so much at the microeconomic level,” he said.

Weathering Years Ahead

Because the assessments of the macroeconomic effect of climate change are currently lacking daily rainfall impacts, these new findings will raise the estimated cost of anthropogenic climate change.

Annual averages alone can provide an “incomplete picture.”

Past work found that low-income countries that rely on agriculture benefit from more annual rainfall. This new analysis suggested that going off annual averages alone can provide an “incomplete picture of the economic effect of rainfall changes,” wrote the authors.

“This is an important first step in incorporating these costs into our estimates of the economic costs of greenhouse gas emissions, such as estimates of the social cost of carbon,” said environmental economist Frances Moore of the University of California, Davis, who did not participate in the research.

Future work will assess future economic damage along a given climate trajectory.

—Jenessa Duncombe (@jrdscience), Staff Writer

Citation: Duncombe, J. (2022), Rainy days dampen economic growth, Eos, 103, https://doi.org/10.1029/2022EO220034. Published on 12 January 2022.
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