The coming El Niño is going to really hurt the world economy

El Niño is set to return and the warmer weather changes it will bring are expected to do a lot of damage this year according to new research that suggests the global economy will take a big hit. 

If you don’t know what El Niño is, that's okay. The climate phenomenon isn’t too difficult to understand. It’s just a Spanish term referring to warmer water shifts in the Pacific Ocean. 

During El Niño, trade winds blowing west along the equator in the Pacific weaken and it brings warm water east toward the Americas according to the National Ocean Service. 

The flow of warm water east pushes the Pacific jetstream south from its normal position and this shift can cause areas of northern Canada and the US to get warmer and dryer. 

The National Ocean Service added that while the northern part of the continent experienced drying, the Gulf Coast and Southeast got wetter and it usually led to increased flooding. 

According to National Geographic, El Niño can cause flooding, droughts, and many other severe weather conditions that can generate typhoons in Australia and hurricanes in the United States. 

With that context in mind, it's easy to see how a warming weather system could be set to wreak havoc on the world economy this year. But just how bad could things get for you?

In a study published in the journal Science, researchers calculated that the next El Niño might cost the global economy $3 trillion dollars compared to a scenario where the world wasn’t facing the climate pattern the Verge noted. 

The paper focused on understanding how climate variability affected El Niño’s economic impacts in past cycles and showed that the damage dealt greatly to the affected countries.

For example, the study’s authors wrote that they were able to attribute $4.1 trillion and $5.7 trillion in global economic losses to the El Niño events in 1982-83 and 1997-98. 

Moreover, they noted that El Niño’s economic effects weren’t just a one time factor that hurt an economy, the climate pattern often results in major growth declines in countries. 

“We can say with certainty that societies and economies absolutely do not just take a hit and recover,” study co-author Christopher Callahan said in a press release on his work. 

“In the tropics and places that experience the effects of El Niño, you get a persistent signature during which growth is delayed for at least five years,” Callahan added. 

The Dartmouth PhD student went on to say the total price of El Niño events have never been truly calculated and noted that researchers need to factor the depressed economic growth that occurs in the aftermath of the climate pattern in order to understand the cost. 

This means that while we may be looking at $3 trillion dollars in damages caused by this year’s El Niño, the after-effects of the 2023 event could run the price tag higher. 

“The deck is potentially stacked for a really big El Niño,” Callahan said, adding that the countries in the tropics may see a decade of depressed growth and the “results could be trillions of dollars in productivity lost globally relative to a world without this El Niño.”