PBS on Killer Heat Waves

Expecting an extreme heat event in the upper Midwest starting tomorrow.
PBS program is worth a look. The problem is bigger, and coming sooner, than you think. For some highly populated areas, it’s here today.

Bloomberg:

Fossil fuel emissions have been warming the Earth steadily in recent decades, but 2024, which was the hottest year on record, in retrospect appears to have been a turning point for the vast apparatus that evaluates and prepares for financial risk.

In its latest annual report on emerging insurance risks, Swiss Re, the Zurich-based reinsurance firm, focused in-depth on extreme heat – a natural catastrophe we don’t normally associate with insurers.

As extreme heat events happen more often, and studies are conducted on them, we’re beginning to better understand the consequences. The Swiss Re report makes clear those impacts are scarier than we previously understood.

“Up to half a million people globally succumb to the effects of extreme heat each year, according to recent scientific research,” the report noted, “exceeding the combined impact of floods, earthquakes and hurricanes.

And it’s not just the extent that heat stress kills and sickens people, there are increasingly other impacts that are of concern if you are in the insurance business.

These include the cascading effects of heat on drought and wildfire, for example. Heat waves contributed to dried flammable vegetation and other conditions that helped propel $78.5 billion in insured wildfire losses globally from 2015-2024, Swiss Re said. And that doesn’t include the Los Angeles wildfires, which occurred this year. A study from the UCLA Anderson School of Business estimates insured losses for these fires to be as much as $45 billion.

Extreme heat can also contribute to subsidence, which causes fissures and cracks in homes, another rising concern in the property market.

Marketplace:

It’s only mid-June, and huge swaths of the country are already experiencing — or bracing for — major heat waves. More than 70 million Americans are under extreme heat alerts, and temperatures in parts of the West have been above 100 degrees.

The Midwest and Northeast are the next regions headed into the oven.

During the winter months, we often hear about cold weather and snowstorms playing havoc with retail sales or other economic activity, but there’s growing evidence that summer heat waves take a big economic toll too — and that their impact is growing as the climate warms.

On a recent really hot day, workers were fixing masonry on the roof of Amir Jina’s building.

“And the head contractor said, ‘During the hotter parts of the day, I’m just not going to send out people to work,’” he said.

Jina, who’s an assistant professor of public policy at the University of Chicago, said the contractor was worried about the health effects on the workers — and the potential for costly errors amid the heat. So the crew took more time to finish the job. 

“Probably would have taken two days, ended up taking three or four days just because they needed to stop,” he said.

This happens in a lot of industries when temperatures become unbearable and it’s unsafe to work outdoors.

“All aspects of the economy slow down,” said Solomon Hsiang, a public policy professor at the University of California, Berkeley. 

He said heat can lead to more accidents on the job. It can also increase health care costs, strain the electricity grid, reduce crop yields and depress overall economic output.

“The real challenge with this kind of slowdown is that we don’t usually see that we ever catch up again,” he said.

Hsiang said that after a heat wave, the economy can get back to its normal baseline of productivity, but we often don’t make up for what we lost while it was hot. 

And with more intense and frequent heat waves as the climate warms, that could have a lasting impact on the economy.