Rainy days are not just depressing emotionally, but also economically

While a rainstorm can at times be an inconvenience to us, it’s obviously an essential part of the world’s ecosystem.

But heavy rainfall can inadvertently have a major impact on our economies, too.

With climate change altering global rainfall patterns, global industries are scrambling to adapt to these changes.

The impact of climate and the role of water security on economic growth have been subjects of increased interest. Evidence suggests that climate change affects precipitation patterns with climate change, therefore potentially affecting economic growth through rainfall variability.

Nonetheless, few studies have examined and explored the connection between rainfall and economic growth, with most of the existing research having been conducted in African countries – which are primarily agricultural-based economies, particularly Sub-Saharan Africa, where rainfed agriculture is dominant.

According to a new study published in science journal Nature, advanced economies are just as impacted by extreme precipitation.

Data analysis from more than 1,500 regions over the last 40 years undertaken by a team of Potsdam scientists indicates a strong connection and suggests intensified daily rainfall by fossil fuel-driven climate change will harm the global economy.

“This is about prosperity, and ultimately about people’s jobs. Economies across the world are slowed down by more wet days and extreme daily rainfall – an important insight that adds to our growing understanding of the true costs of climate change,” says Leonie Wenz from the Potsdam Institute for Climate Impact Research (PIK) and the Mercator Research Institute on Global Commons and Climate Change (MCC) who led the study.

“Macro-economic assessments of climate impacts have so far focused mostly on temperature and considered – if at all – changes in rainfall only across longer time scales such as years or months, thus missing the complete picture,” explains Wenz.

High-income nations’ services and manufacturing sectors are most strongly hindered, the study noted.

“While more annual rainfall is generally good for economies, especially agriculturally dependent ones, the question is also how the rain is distributed across the days of the year. Intensified daily rainfall turns out to be bad, especially for wealthy, industrialized countries like the US, Japan, or Germany.”

“We identify a number of distinct effects on economic production, yet the most important one really is from extreme daily rainfall,” says Maximilian Kotz, first author of the study and also at the Potsdam Institute. 

“This is because rainfall extremes are where we can already see the influence of climate change most clearly, and because they are intensifying almost everywhere across the world.”

Taken in sum, the study is a first-of-its-kind global analysis of subnational rainfall effects, evaluating economic output for 1,554 regions worldwide between 1979-2019 combined with high resolution rainfall data.

“Our study reveals that it’s precisely the fingerprint of global warming in daily rainfall which have hefty economic effects that have not been accounted for but are highly relevant,” says co-author Anders Levermann, Head of the Potsdam Institute’s Complexity Science domain.

“Taking a closer look at short time scales instead of annual averages helps to understand what is going on: it’s the daily rainfall which poses the threat. It’s rather the climate shocks from weather extremes that threaten our way of life than the gradual changes,” he adds.

“By destabilizing our climate we harm our economies. We have to make sure that our burning of fossil fuels does not destabilize our societies, too.”