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Upholding labour productivity under climate change: an assessment of adaptation options

Author

Listed:
  • Ed Day
  • Sam Fankhauser
  • Nick Kingsmill
  • Hélia Costa
  • Anna Mavrogianni

Abstract

Changes in labour productivity feed through directly to national income. An external shock, like climate change, which may substantially reduce the productivity of workers is therefore a macroeconomic concern. The biophysical impact of higher temperatures on human performance is well documented. Less well understood are the wider effects of higher temperatures on the aggregate productivity of modern, diversified economies, where economic output is produced in contexts ranging from outdoor agriculture to work in air-conditioned buildings. Working conditions are at least to some extent the result of societal choices, which means that the labour productivity effects of heat can be alleviated through careful adaptation. A range of technical, regulatory/infrastructural and behavioural options are available to individuals, businesses and governments. The importance of local contexts prevents a general ranking of the available measures, but many appear cost-effective. Promising options include the optimization of working hours and passive cooling mechanisms. Climate-smart urban planning and adjustments to building design are most suitable to respond to high base temperature, while air conditioning can respond flexibly to short temperature peaks if there is sufficient cheap, reliable and clean electricity.Key policy insights The effect of heat stress on labour productivity is a key economic impact of climate change, which could affect national output and workers’ income.Effective adaptation options exist, such as shifting working hours and cool roofs, but they require policy intervention and forward planning.Strategic interventions, such as climate-smart municipal design, are as important as reactive or project-level adaptations.Adaptation solutions to heat stress are highly context specific and need to be assessed accordingly. For example, shifting working hours could be an effective way of reducing the effect of peak temperatures, but only if there is sufficient flexibility in working patterns.

Suggested Citation

  • Ed Day & Sam Fankhauser & Nick Kingsmill & Hélia Costa & Anna Mavrogianni, 2019. "Upholding labour productivity under climate change: an assessment of adaptation options," Climate Policy, Taylor & Francis Journals, vol. 19(3), pages 367-385, March.
    • Handle: RePEc:taf:tcpoxx:v:19:y:2019:i:3:p:367-385
    DOI: 10.1080/14693062.2018.1517640
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    Citations

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    Cited by:

    1. Elizabeth Humphrys & James Goodman & Freya Newman, 2022. "‘Zonked the hell out’: Climate change and heat stress at work," The Economic and Labour Relations Review, , vol. 33(2), pages 256-271, June.
    2. Mathews, Shilpita & Surminski, Swenja & Roezer, Viktor, 2021. "The risk of corporate lock-in to future physical climate risks: the case of flood risk in England and Wales," LSE Research Online Documents on Economics 112801, London School of Economics and Political Science, LSE Library.
    3. Kacou, Kacou Yves Thierry & Kassouri, Yacouba & Evrard, Talnan Hongwopena & Altuntaş, Mehmet, 2022. "Trade openness, export structure, and labor productivity in developing countries: Evidence from panel VAR approach," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 194-205.
    4. Lucia Wuersch & Alain Neher & Frank E. Marino & Larissa Bamberry & Rodney Pope, 2023. "Impacts of Climate Change on Work Health and Safety in Australia: A Scoping Literature Review," IJERPH, MDPI, vol. 20(21), pages 1-35, October.
    5. Nina Knittel & Martin W. Jury & Birgit Bednar-Friedl & Gabriel Bachner & Andrea K. Steiner, 2020. "A global analysis of heat-related labour productivity losses under climate change—implications for Germany’s foreign trade," Climatic Change, Springer, vol. 160(2), pages 251-269, May.
    6. Agarwala, Matthew & Burke, Matt & Klusak, Patrycja & Mohaddes, Kamiar & Volz, Ulrich & Zenghelis, Dimitri, 2021. "Climate Change And Fiscal Sustainability: Risks And Opportunities," National Institute Economic Review, National Institute of Economic and Social Research, vol. 258, pages 28-46, November.
    7. Lee, Chien-Chiang & Chang, Yu-Fang & Wang, En-Ze, 2022. "Crossing the rivers by feeling the stones: The effect of China's green credit policy on manufacturing firms' carbon emission intensity," Energy Economics, Elsevier, vol. 116(C).
    8. Elena Paglialunga & Andrea Coveri & Antonello Zanfei, 2020. "Climate change and inequality in a global context. Exploring climate induced disparities and the reaction of economic systems," Working Papers 2003, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2020.
    9. Wan, Qilong & Miao, Xiaodong & Afshan, Sahar, 2022. "Dynamic effects of natural resource abundance, green financing, and government environmental concerns toward the sustainable environment in China," Resources Policy, Elsevier, vol. 79(C).
    10. Anna Nagurney, 2021. "A Multiperiod Supply Chain Network Optimization Model with Investments in Labor Productivity Enhancements in an Era of COVID-19 and Climate Change," SN Operations Research Forum, Springer, vol. 2(4), pages 1-22, December.
    11. Paglialunga, Elena & Coveri, Andrea & Zanfei, Antonello, 2022. "Climate change and within-country inequality: New evidence from a global perspective," World Development, Elsevier, vol. 159(C).
    12. Mathews, Shilpita & Surminski, Swenja & Roezer, Viktor, 2021. "The risk of corporate lock-in to future physical climate risks: the case of flood risk in England and Wales," LSE Research Online Documents on Economics 112807, London School of Economics and Political Science, LSE Library.
    13. Yun Qiu & Jinhua Zhao, 2022. "Adaptation and the distributional effects of heat: Evidence from professional archery competitions," Southern Economic Journal, John Wiley & Sons, vol. 88(3), pages 1149-1177, January.
    14. Matthew Agarwala & Matt Burke & Patrycja Klusak & Kamiar Mohaddes & Ulrich Volz & Dimitri Zenghelis, 2021. "Climate Change and Fiscal Responsibility: Risks and Opportunities," Working Papers 008, The Productivity Institute.
    15. Conte Grand Mariana & Soria Matias, 2023. "Economic Costs Of Heat Stress Induced Reductions In Worker Productivity Due To Climate Change In A Developing Country," Asociación Argentina de Economía Política: Working Papers 4636, Asociación Argentina de Economía Política.
    16. Mongelli, Francesco Paolo & Pointner, Wolfgang & van den End, Jan Willem, 2022. "The effects of climate change on the natural rate of interest: a critical survey," Working Paper Series 2744, European Central Bank.

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