Weather Stress Monitor: El Niño On Track For Global Anomaly ~2.0°C By 1H27

Research evidence excerpt

Weather Stress Monitor: El Niño On Track For Global Anomaly ~2.0°C By 1H27

ion needing to migrate.

Each 1º of warming above the RCP8.5 scenario would necessitate another ~1bn people migrating--

or investing in the equivalent infrastructure upgrade. At a $250-$300/person benchmark for migration

costs, and a 5% value capture by the chemical industry, this would translate into a ~$45bn demand lift

for the chemical industry by 2070 (~7% or ~14bps lift to demand CAGRs).

ENSO and AR Events: We sketch how atmospheric rivers and bomb cyclones work here: It will probably

take 4-5 years to accumulate enough data to start to weave the 5-point scale into economic forecasts;

the current rule of thumb is that each rank represents a ~10x increase in expected flood damage (AR

5 on the West Coast correlates with ~$260m in flood damage). Another key factor will be the switch in

the ENSO cycle this year. A transition to El Niño typically lifts global temperatures by ~1.95ºC (0.44ºC

std. dev.), and significantly increases the frequency of atmospheric rivers hitting the US West Coast

(by ~4 days/year on average); a transition to La Niña usually moves trends a similar amount the other

way. There are also indications that the water content of bomb cyclones could increase 2x-3x faster

than the overall increase in atmospheric water content (the oft-cited 1ºC = 7% rule). For crops, as a

rough rule of thumb El Niño hurts yields in 20-25% of global acres and improves yields in ~33%: the

average impact is an improvement in global soybean yields by 2-5% (7-14% in Argentina) whereas

yields of corn, rice and wheat are usually clipped by 1-4%, with more severe headwinds for palm oil,

coffee and cocoa. In contrast, a shift to La Niña usually lifts US corn yields ~7.4% while cutting global