Impacts of higher temperatures on labour productivity and value for money
DFID commissioned Vivid to explore the impacts of higher temperatures due to climate change on labour productivity and economic output. The report develops a stylised national economic model for five countries – Ethiopia, Ghana, India, Jordan, and Tanzania. The results in a moderate climate change scenario by 2050 could see losses of up to 20% of annual effective labour hours, and as much as 50% in the hottest months. This in turn could reduce economic output (Gross Value Added) by over 3%. Both economic output and lost work hours are highly concentrated in sectors where work is high intensity and conducted outdoors, namely agriculture and construction.
A range of technical, regulatory, behavioural and research options could help adapt to these impacts. The paper sets out a mapping of the solution space and a decision-making framework under uncertainty, and in different regional contexts. For example, while technical options such as air conditioning will play a role in the solution space, there may be more cost-effective, low-regrets options that should be implemented first – such as optimising working hours, structural economic transformation, and passive worker cooling options.
Date: October 2017