POTSDAM, Germany, June 10 (UPI) -- The forces of globalization have made the global economic system more vulnerable to production losses caused by climate change, new research shows.
The global supply chain is more interconnected than ever before, and according to a new study published in the journal Science Advances, that connectivity makes it easier for losses related to global warming to spread from country to country.
"Our study shows that since the beginning of the 21st century the structure of our economic system has changed in a way that production losses in one place can more easily cause further losses elsewhere," lead author Leonie Wenz, a researcher at the Potsdam Institute for Climate Impact Research, said in a news release.
Globalization has encouraged faster and more efficient systems of production, but global economic forces have also diminished diversification. If a region is particularly conducive to a certain industry or for the production of a certain product or resource, globalization encourages that region to focus intently on such an advantage, while discouraging production of that same good elsewhere.
For example, nearly half of the world's coconut oil comes from the Philippines. Coconut oil is one of the world's most commonly used vegetable oils, used by food businesses over the world. When Typhoon Haitang halted the production of coconut oil in the Philippines, economic repercussions were felt around the globe.
But as Wenz and her colleagues at Potsdam showed in the latest study, small disruptions can also add up and cause faraway economic harm -- like reduced production in construction, agriculture and other economic sectors caused by workers' heat stress. A number of economic studies have shown that worker production goes down as temperatures rise.
Wenz and her colleagues build models to show how heat-stress losses might spread throughout the global economic system. Their models combined data from 26 industries in 186 countries.
"With unabated climate change, the effects of increasing weather extremes, like most recently seen in Paris, will have severe impacts on natural and societal systems," concluded study co-author Anders Levermann.
"To estimate the costs of future climate change we need to assess global economic impacts of more frequent heat extremes and meteorological impacts, such as floods and tropical storms, and understand their relation to the economic network's structure," Levermann said. "This is the basis for implementing appropriate adaptation measures -- in a warming world with more intense weather extremes it is likely that society needs to become more resilient and more flexible."