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Author: Levermann, Anders × End date: 2024 × Start date: 2020 × End date: 2024 × Start date: 2020 × DDC: 500 × DDC: 610 ×

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    Future heat stress to reduce people’s purchasing power
    (San Francisco, Ca. : PLOS, 2021) Kuhla, Kilian; Willner, Sven Norman; Otto, Christian; Wenz, Leonie; Levermann, Anders
    With increasing carbon emissions rising temperatures are likely to impact our economies and societies profoundly. In particular, it has been shown that heat stress can strongly reduce labor productivity. The resulting economic perturbations can propagate along the global supply network. Here we show, using numerical simulations, that output losses due to heat stress alone are expected to increase by about 24% within the next 20 years, if no additional adaptation measures are taken. The subsequent market response with rising prices and supply shortages strongly reduces the consumers’ purchasing power in almost all countries including the US and Europe with particularly strong effects in India, Brazil, and Indonesia. As a consequence, the producing sectors in many regions temporarily benefit from higher selling prices while decreasing their production in quantity, whereas other countries suffer losses within their entire national economy. Our results stress that, even though climate shocks may stimulate economic activity in some regions and some sectors, their unpredictability exerts increasing pressure on people’s livelihood.
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    Post-Brexit no-trade-deal scenario: Short-term consumer benefit at the expense of long-term economic development
    (San Francisco, California, US : PLOS, 2020) Wenz, Leonie; Levermann, Anders; Willner, Sven Norman; Otto, Christian; Kuhla, Kilian
    After the United Kingdom has left the European Union it remains unclear whether the two parties can successfully negotiate and sign a trade agreement within the transition period. Ongoing negotiations, practical obstacles and resulting uncertainties make it highly unlikely that economic actors would be fully prepared to a “no-trade-deal” situation. Here we provide an economic shock simulation of the immediate aftermath of such a post-Brexit no-trade-deal scenario by computing the time evolution of more than 1.8 million interactions between more than 6,600 economic actors in the global trade network. We find an abrupt decline in the number of goods produced in the UK and the EU. This sudden output reduction is caused by drops in demand as customers on the respective other side of the Channel incorporate the new trade restriction into their decision-making. As a response, producers reduce prices in order to stimulate demand elsewhere. In the short term consumers benefit from lower prices but production value decreases with potentially severe socio-economic consequences in the longer term.