Approximately 80% of the world’s trade, a significant portion of the global economy, is managed by ports. These ports, however, are incredibly vulnerable to operational disruptions due to extreme weather events, which can lead to a significant amount of downtime. These disruptions have far-reaching effects, causing systemic impacts that extend beyond the affected port and ripple out to impact other ports and supply chains worldwide.

Major ports such as Shanghai and Ningbo in China, which play a vital role in global trade, are not immune to these disruptions. These ports experience operational disruptions due to extreme wind conditions for an average of 5 to 6 days annually. In the event of extreme weather events, these disruptions can lead to long-term shutdowns, further affecting global trade.

The systemic impacts of climate-related disruptions in ports can be seen in instances such as the port of Los Angeles-Long Beach. Disruptions at this port could have a multiplier effect of 2.9 across domestic supply chains. This demonstrates that the effects of climate change on one port can have a domino effect on other ports and supply chains.

According to a study of 1,320 global critical ports, there is an average downtime risk of 1.4 days due to climate-related disruptions. Worryingly, 5% of the ports studied face over 5 days of disruption, which can have significant impacts on international trade and economic activities.

The impact of port disruptions on international trade and economic activities is glaringly evident. For example, Cyclone Debbie’s impact on Australian coal exporting ports caused supply shortages in Indian and Chinese steel mills, affecting their production capacities and output.

Furthermore, the economic cost of climate extremes, including droughts and heatwaves, is expected to rise significantly. This poses a serious threat to global economies, which are already grappling with the impacts of climate change.

To better understand and estimate the economic damages from climate extremes, a study by the University of Sussex and Utrecht University is developing a new method. This method will consider both direct and indirect effects of these climate extremes.

The new method seeks to include factors often overlooked in traditional models. These factors include supply chain disruptions, commodity price increases, and reduced productivity. The research forms part of a larger project funded by the European Research Council, aimed at enhancing the understanding of the economic damages from climate extremes and improving models to forecast these damages. This will enable a more comprehensive response to climate extremes and their impact on global economies.