Paris:Rising exposure to extreme heat and droughts poses significant risks to global economies, a new report from the Organisation for Economic Co-operation and Development (OECD) has found. The report indicates that the frequency of days with above-average temperatures worldwide has more than doubled since the early 1980s. Simultaneously, declining soil moisture is increasing risks for agricultural production and global supply chains.
According to Wam, the Climate Action Monitor 2026 reveals that globally, the number of days with above-average temperatures has surged by 126%, with notable increases in regions such as Latin America and the Caribbean, Sub-Saharan Africa, and the Middle East and North Africa, where the numbers have more than tripled.
About half of the population in OECD countries is exposed to hot days, defined as temperatures exceeding 35°C, each year. During the period from 2021 to 2025, these populations experienced 35% more heat stress days compared to the 1981-2010 climate baseline, equating to an additional 17 days per year on average. Such extreme weather events have significant impacts on livelihoods, ecosystems, and economic activity, leading to adverse health effects, loss of life, displacement, and disruptions in transport, energy, water, and agricultural systems.
The report further highlights that cropland soil moisture in OECD member and partner countries was 2.6% lower on average between 2021 and 2025 compared to the 1981-2010 period. This decline underscores the growing risks to agricultural water availability, which could have significant consequences for major agricultural producers and exporters, thereby affecting food security and global supply chains.
Drought conditions can also impact energy production, as low river flows and high-water temperatures constrain nuclear power generation and reduced water availability affects hydropower output. Additionally, low river levels can restrict inland navigation and major shipping routes, leading to increased transport costs and trade disruptions.
The OECD report suggests that strengthening adaptation efforts can help mitigate economic disruptions and protect vulnerable populations. With drought severity projected to increase by 2100, businesses and governments are already taking action to enhance resilience. Measures include diversifying transport options, strengthening supply chains to cope with drought-related disruptions, and developing heat action plans to reduce risks to human health.