How does El nino impact on economy? - Seeker's Thoughts

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How does El nino impact on economy?


 How Does El Nino Impact on Economy?

 El Nino can have profound impacts on global weather patterns by altering jet streams that direct storms around the world, thus altering economic activity by altering crops, power grids and food prices.


Dartmouth College researchers in the US have recently conducted groundbreaking research which concludes that prior El Ninos have cost the global economy billions of dollars, particularly those occurring between 1982-83 and 1997-98 which specifically affected poorer nations of the tropics.


Climate Change


Scientists have long anticipated and expressed alarm at an El Nino event. If one occurs, global surface temperatures rise significantly and can have severe consequences on weather patterns and ecosystems worldwide.


The World Meteorological Organization provides insight into this natural phenomenon: Under normal conditions, trade winds in the Pacific generally blow horizontally along the equator and transport warm water from South America to Asia via trade winds; sunlight heats this surface water which gradually rises. When El Nino weakens trade winds further, some water may sink back down again under South American pressure until eventually rising again as an upwelling event; this process is known as upwelling.


Peruvian fishermen noticed in the 1600s that warm surface water near their country's coastline reached its warmest level during December. To describe it in Spanish terms, these fishermen called this event El Nio, or Little Boy for its tendency to occur at Christmas time.


An El Nino event sets in motion a chain of events that can seriously destabilise the economy. Drought can lead to food price and hunger increases; similarly, farming may become harder with lower harvests resulting in economic losses.


The National Oceanic and Atmospheric Administration reports that an El Nino event is emerging, with 84% odds that it will become greater than moderate by winter and 56% chances it could become strong. El Ninos can shift jet streams further southward, producing wetter weather in the Southwest and Southeast and increasing flood risks.


Natural Disasters


Natural disasters have an immense effect on economies worldwide. Their direct economic losses (such as property damage and death) as well as indirect ones - production disruptions which reduce output and demand - are considerable, but so too are indirect ones such as production disruptions that reduce output and demand. There has been increasing research on the economic effects of natural disasters; studies utilizing empirical data, computational macroeconomic models, methods such as survey sampling or methods. Their outcomes often depend on how researchers measure direct economic losses as well as how far economic activity was disrupted or disrupted during studies compared with control groups or controls groups who conducted studies. Results can vary widely depending on these variables; results often depend on how these studies measure direct economic losses measured against each method applied when measuring direct losses are measured relative to how disruption of economic activity.


National Oceanic and Atmospheric Administration utilizes a network of scientific buoys to track ocean surface temperature anomalies in the Pacific Ocean. A classic El Nino event can be identified by persistently above normal surface water temperatures in eastern equatorial Pacific, accompanied by changes to atmospheric circulation patterns that impact over large regions while simultaneously having localized effects.


El Nino can influence hurricane activity by increasing vertical wind shear over the Atlantic Ocean, making it more difficult for hurricanes to build strength, which in turn weakens them and has other global repercussions such as rising food prices. Studies have also shown how natural disasters reduce economic growth rates significantly for low-income countries with vulnerable domestic economies.




El Nino weather patterns not only cause natural disasters, but they can also have severe economic repercussions worldwide. Floods disrupt supply chains while drought limits agricultural output - all while contributing to higher insurance payouts than anticipated and even slowing economic growth in some cases.


The new Dartmouth paper published Thursday in Science details these costs, noting that direct damage like washed-out bridges or crop loss can cost billions, with far higher indirect costs from recovery taking longer to occur. Researchers examined GDP data following major El Nino events to reveal "persistent signatures of slower growth for over a decade post event.


That is because the global economy is connected through trade and financial markets. A drought in Australia could spark an oil price surge while hot temperatures in Asia can increase demand for nonfuel commodities while decreasing power production, which in turn drives up prices further.


Kamiar Mohaddes, an economist at Cambridge, emphasizes the need to account for El Nino's full cost on global economies by taking account of these wider effects. A more thorough understanding of weather-driven economic outcomes could assist countries in planning for future El Ninos; but climate change will amplify frequency and severity, potentially making future events costlier than before.


Climate Policy


El Nino tends to bring heavier rainfall across parts of the southern U.S., western South America and Australia, but also brings destructive flooding and drought conditions as well as increasing tornado frequency in southeastern states like Florida. It can even increase tornado activity within those countries themselves!


El Ninos are disruptive to global atmospheric circulation, the large-scale movement of air that helps distribute oceanic and atmospheric heat, by weakening trade winds near the equator that normally carry moisture from Indonesia to India and Southeast Asia; when strong El Ninos occur, this leads to drought conditions there that hinder agricultural productivity.


Warmer surface waters also prevent upwellings of cold waters off South America's west coast, which increases fish population numbers and affects local economies.


Influences also extend to hurricane season. When temperatures in the Pacific increase, more hurricanes and typhoons develop there while Atlantic storms occur less frequently because stronger upper-level winds prevent vertical wind shear from developing, forcing hurricanes to dissipate quickly.


Scientists continue to keep an eye out for the possibility of Modoki El Ninos, or Central Pacific El Ninos, which differ from traditional ones by being driven by ocean temperature changes in the central rather than eastern Pacific Ocean. While this won't change whether moderate or strong El Ninos develop, this can alter weather patterns which might reduce food security and water supplies for communities across Asia, Africa and Latin America.

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