Rainy days devastate the economy – and climate change will make it worse

Rainy days don’t just spoil people’s picnic plans, they put a serious dent in economic growth, new research has shown.

That’s a serious concern, as climate change is projected to increase rainfall in many regions: warming air can hold more water vapour that eventually becomes rain.

Researchers from the University of Potsdam analysed economic statistics across 1,500 regions over 40 years - and warned that if rainfall intensifies, it will harm the global economy.

The researchers warn that increased rainfall could be more damaging to world economies than extreme weather.

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Anders Levermann, head of the Potsdam Institute's Complexity Science domain, said: "Our study reveals that it's precisely the fingerprint of global warming in daily rainfall which have hefty economic effects that have not yet been accounted for but are highly relevant.

"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.

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

The researchers evaluated data of sub-national economic output for 1,554 regions worldwide in the period 1979-2019.

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The scientists combined these with high resolution rainfall data – a highly local phenomenon – and revealed the new insights.

Leonie Wenz, from the Potsdam Institute for Climate Impact Research (PIK), said: "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.”

"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.”

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Wenz said: "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, industrialised countries like the US, Japan, or Germany."

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