Is El Nino's economic risk too hot to handle?

Across the globe, the looming "super El Nino" is sparking warnings from economists, planners and experts about its potentially devastating impact on economies and societies.

A key area of the Pacific Ocean used to measure the strength of El Nino last week reached its warmest and most intense level ever recorded for the 15th week since it formed, which is early in its lifetime, scientists at Columbia University reported.

The El Nino weather event won't peak for several months and is expected to last through to spring 2027. The United Nations' World Meteorological Organization cautioned on Friday that it will likely trigger extreme heat, drought and rainfall well into next year.

The WMO warned of the strong chance of drought and wildfires in Indonesia, India and other parts of Asia, south and east Australia, chunks of South America and southern regions in Africa. Other areas, including much of the United States and fire-struck Southern Europe, will receive above average rainfall, the agency said.

"This El Nino, developing against the backdrop of unprecedented ocean heat and rising temperatures, provides governments and communities with a window of opportunity to anticipate risks and act before impacts unfold," said WMO Secretary-General Celeste Saulo.

For many economists, however, the consequences are already becoming evident. Investors and policymakers are increasingly concerned that climate shocks could reinforce inflationary pressures already facing economies around the world.

"Heat kills — both lives and livelihoods," said Gernot Wagner, a climate economist at Columbia Business School.

"And it is often rather small changes in the average that lead to large threshold effects," he said.

He cited research showing that "only one additional day above 32 C in any given year lowers annual payroll by 0.04 percent".

"That may seem like a small effect. It is not," Wagner told China Daily. "One hot day in any given year shows up in annual productivity statistics, and El Nino only exacerbates these effects."

Wagner said the impacts extend well beyond labor productivity.

"'Climateflation' is a real phenomenon, and one that can already be measured," he said.

"Single heat waves lead to often large spikes in prices of individual agricultural products, which reverberate throughout the economy," he said.