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Too hot to work? The impact of climate change on labour capacity in Southeast Asia

Sensemaking / Too hot to work? The impact of climate change on labour capacity in Southeast Asia

Rising temperatures and extreme heat stress are likely to undermine labour capacity in Southeast Asian nations over the next 30 years, estimates global risk analytics company

By Alise Perepjolkina / 09 Nov 2015

According to Verisk Maplecroft’s 2016 Climate Change and Environmental Risk Analytics, released 28 October, Southeast Asia could lose 16% of its current labour productivity of manufacturing hubs due to rising heat stress, which could cause absenteeism due to dizziness, fatigue, nausea and even death in extreme cases.

The global risk analytics company forecasts that, within a generation, the economies of Singapore, Malaysia, Indonesia and the Philippines could be as much as a quarter less productive than they are today. Singapore and Malaysia are predicted to experience the biggest losses in productivity, dropping 25% and 24% respectively from current levels.

By 2045 almost half the world’s population (47%) will live in countries categorised as ‘extreme risk’, according to the Heat Stress Index, one of 20 new indices Verisk Maplecroft released with its Analytics. Southeast Asia is expected to undergo some of the greatest economic growth in the coming decades, with the region’s GDP increase 50% to US$9 trillion, accounting for 13% of the projected rise in global GDP. Yet the potential effect of heat stress on labour productivity in the region has been largely overlooked in financial modelling.

To meet the GDP forecasts, the challenges heat stress poses to national workforces in ‘extreme risk’ countries need to be urgently addressed. Calculating potential lost productivity for 1,300 cities, the company found that Southeast Asia hosts 45 of the 50 highest risk cities, including Singapore, Jakarta and Kuala Lumpur. Malaysia is home to 20 of the 50 global cities identified as losing the most labour capacity to heat stress. Of the highest risk cities, 13 are in Indonesia, four in the Philippines and three are in Thailand. Investors in these countries may be exposed to rising costs for manufacturing and health care provisions, alongside disruption risks in their supply chains. Crops and livestock are also extremely vulnerable to heat stress, driving food shortages, poverty, and migration, especially in nations dependent on manufacturing, construction and agriculture.

“Climate change will push heat stress impacts to boiling point with significant implications for both national economies and the health of vulnerable workers,” said Dr James Allan, head of Environment at Verisk Maplecroft. “Governments and business need to identify which assets, sectors, commodities and groups are most at risk and what protective measures should be put in place.”

Image credits: Steve James/ Flickr


Verisk Maplecroft (October 2015) 'Heat stress threatens to cut labour productivity in SE Asia by up to 25% within 30 years

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