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The return of the climate phenomenon El Niño after almost four years is expected to bring “unprecedented devastation to the global economy”, points out Bloomberg Economics. According to modeling by the international agency, the change from the coldest phase of La Niña to a warming phase could “generate chaos, especially in rapidly growing emerging economies”.
The forecast comes at a time when the global economy is already fragile, still struggling to recover from Covid-19 and Russia's war in Ukraine. “Electrical networks are experiencing tension and blackouts are becoming more frequent. Extreme heat creates public health emergencies, while drought increases fire risks. Crops spoil, roads are flooded and homes are destroyed”, points out Bloomberg.
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Analysts recall that previous El Niño years resulted in a marked impact on global inflation, adding 3.9 percentage points to the prices of non-energy commodities and 3.5 percentage points to oil. The phenomenon also affected the growth of Gross Domestic Product (GDP), mainly in Brazil, Australia, India and other vulnerable countries.
“With the world struggling with high inflation and the risk of recession, El Niño arrives at exactly the wrong time. Central banks have more limited power,” said Bhargavi Sakthivel, an economist at Bloomberg Economics. According to him, while political interventions tend to manipulate demand, El Niño normally affects supply.
According to the agency, in India, for example, “reduced monsoons could affect harvests of rice, cotton, corn and soybeans. The United States will see deadly winter storms again, although there will be an overall drop in the number of hurricanes. Parts of western and southern Africa could be hit by drought, affecting cocoa and maize production.”
“Australia could suffer from severe droughts and bushfires, which would harm the production of wheat and other crops. In Brazil and Colombia, the villain will be drought, which can affect coffee production, but the opposite happens in Peru: widespread flooding and a reduction in anchovy fishing. In China, temperatures are already killing livestock and overloading energy grids,” he adds.
“When an El Niño occurs on top of the long-term warming trend, it's like a double shock,” said Katharine Hayhoe, chief scientist at The Nature Conservancy. The risks are most severe in the tropics and the Southern Hemisphere. El Niño could shave almost half a percentage point off annual GDP growth in India and Argentina, according to the Bloomberg Economics model.
The general increase in temperatures amplifies the effects of climate phenomena. The last three La Niña years – 2020 to 2023 – have been warmer than all El Niño years before 2015. The World Meteorological Organization calculates that there is a 98% chance that the combination of greenhouse gas accumulation and the return of El Niño will make the next five-year period the hottest yet, pushing global temperatures into uncharted territory.
“El Niño will only worsen the climate change impacts we are already experiencing – hotter heatwaves, more severe droughts and more extreme wildfires,” said Friederike Otto, senior lecturer at the Grantham Institute for Climate Change and the Environment.
Source: Leonardo Gottems | agrolink
