The global economic impact of weather variability on rich and poor

Temperature and precipitation variability and extremes affect production worldwide. These production disruptions will change with future warming and affect consumers both locally and remotely through supply chains. Given the potentially non-linear economic response, trade impacts are difficult to quantify; rather, empirical assessments focus on the direct uneven impacts of weather extremes. Here, simulating the global economic interactions of profit-maximizing firms and utility-optimizing consumers, we assess the risks to consumption arising from weather-induced production disruptions in supply chains. Within countries, risks are highest for middle-income countries due to adverse trade dependence and seasonal exposure to climate conditions. We also found that risks are increasing in most countries in relation to future climate change. Global warming increases consumer risks locally and through supply chains. However, high-income consumers face the greatest increase in risk. Overall, risks to income are heterogeneous within and across countries, so targeted local and global resilience building can reduce them. (Lennart Quante, Sven N. Willner, Anders Levermann, more at nature.com)