The effect of rainfall changes on economic production

Abstract

Macro-economic assessments of climate impacts lack an analysis of the distribution of daily rainfall, which can resolve both complex societal impact channels and anthropogenically forced changes^1-6. Here, using a global panel of subnational economic output for 1,554 regions worldwide over the past 40 years, we show that economic growth rates are reduced by increases in the number of wet days and in extreme daily rainfall, in addition to responding nonlinearly to the total annual and to the standardized monthly deviations of rainfall. Furthermore, high-income nations and the services and manufacturing sectors are most strongly hindered by both measures of daily rainfall, complementing previous work that emphasized the beneficial effects of additional total annual rainfall in low-income, agriculturally dependent economies^4,7. By assessing the distribution of rainfall at multiple timescales and the effects on different sectors, we uncover channels through which climatic conditions can affect the economy. These results suggest that anthropogenic intensification of daily rainfall extremes^8-10 will have negative global economic consequences that require further assessment by those who wish to evaluate the costs of anthropogenic climate change.