Linking regional economic impacts of temperature-related disasters to underlying climatic hazards

Abstract Temperature-induced disasters lead to major human and economic damage, but the relationship between their climatic drivers and impacts is difficult to quantify. In part, this is due to a lack of data with suitable resolution, scale and coverage on impacts and disaster occurrence. Here, we address this gap using new datasets on subnational sector-disaggregated economic productivity and geo-coded disaster locations to quantify the role of climatic hazards on economic impacts of temperature-induced disasters at a subnational scale. Using a regression-based approach, we find that the regional economic impacts of heat-related disasters are most strongly linked to the daily maximum temperature (TXx) index. This effect is largest in the agricultural sector (6.37% regional growth rate reduction per standard deviation increase in TXx anomaly), being almost twice as strong as in the manufacturing sector (3.98%), service sector (3.64%), and whole economy (3.64%). We also highlight the role of compound climatic hazards in worsening impacts, showing that in the agriculture sector, compound hot-and-dry conditions amplify the impacts of heat-related disasters on growth rates by a factor of two. In contrast, in the service and manufacturing sectors, stronger impacts are found to be associated with compound hot and wet conditions. These findings present a first step in understanding the relationship between temperature-related hazards and regional economic impacts using a multi-event database, and highlight the need for further research to better understand the complex mechanisms including compound effects underlying these impacts across sectors.