FIGURE 2.3: Impact of Climate Change on Sub-Saharan Africa’s GDP
0 Percent change in GDP
percent per year after 2100 (figure 2.3). Furthermore, the long-run impact of climate change on economic activity varies widely across African countries. For global warming of 3°C by 2100, GDP losses could be as low as 3.4 to 4.4 percent (Namibia and South Africa)—with a regional median loss of 7-8 percent (Kenya, Madagascar, Tanzania, and Rwanda).98
2020
2027
2037
2047
2067
2100
-2
The estimated GDP losses are significantly higher if there is no action against climate change.
-4 -6 -8
-10
0˚C (no warming) 1.5˚C (Paris Agreement) 2˚C 3˚C (business as usual)
Source: Kompas, Pham, and Che 2018.
Microeconomic Evidence of the Impact of Climate Change on Manufacturing This subsection explores the relationship between temperature and economic performance using detailed production data at the line or plant level. One of the strands in this empirical literature looks at heat stress caused by climate change and heat-related productivity losses. Theoretically, it has been argued that heat-related health effects can adversely impact activity by: (i) reducing the size of the working population due to deaths—including worker mortality, infant mortality, and migration99; (ii) raising medical expenditures100; (iii) reducing the number of working hours if workers are sick and absent from the job101; and (iv) lowering labor productivity due to physiological/clinical heat impacts.102 A recent empirical survey suggests that global economic losses due to heat-related labor productivity losses can, on average, amount to 0.44 percent (RCP 2.6) to 2.9 percent (RCP 8.5) of global GDP in 2100.103 The large economic losses take place in South and Southeast Asia, Sub-Saharan Africa, and Central America. This meta-analysis of research studies highlights that the differences in results occur not only across areas, but also within the same area given the differences in methodologies and assumptions on adaptation policies assumed in those studies. In this context, the adaptation measures considered included air conditioning installation, shifting working hours, mechanization, and increased ventilation. Additionally, adaptation measures were estimated to reduce economic losses by 22-68 percent. Recent evidence from three different manufacturing settings in India—cloth weaving, garment sewing, and steel products—suggests that there is lower worker productivity and higher absenteeism on hot days as well as in weeks with more hot days.104 The temperatureabsenteeism relationship is strong (weak) among workers with paid (unpaid) leave. Additionally, 98 See Kompas, Pham, and Che (2018). 99 See Chen et al. (2018), Banerjee and Maharaj (2020), and Cattaneo and Peri (2016). 100 See Schmeltz et al. (2016) and Borg et al. (2021). 101 See Zander et al. (2015) and Yu et al. (2019). 102 Adhvaryu, Kala, and Nyshadham (2018). 103 Zhao et al. (2021) review 26 journal articles and four reports. 104 Somanathan et al. (2021).
A F R I C A’ S P U L S E
>
67
