The Social and Economic Impact of Rising Temperatures Expected to be Strong

By Dr Matt Benson, Sofia Castelo

April 2024 FEATURE
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Side-by-side comparison of 1993 and 2023 Land Surface Temperature (LST).

CLIMATE CHANGE IS a global phenomenon whose impact on different regions varies in intensity. The Intergovernmental Panel for Climate Change has identified sub-Saharan Africa, South Asia and Southeast Asia as regions that will be most affected. Therefore, Malaysia is a hotspot where global warming effects will be clearly apparent, be this in changes in rainfall patterns, increased temperatures and/or a rise in extreme weather events such as heatwaves.

In Malaysia, a heatwave is declared when temperatures exceed 37°C for three consecutive days. The World Health Organisation (WHO) predicts that by 2050, Malaysia could experience 200 days of heatwaves per year (based on a scenario of a 3°C increase by 2100), compared with 20 days in the 1980s. Urban areas will bear the brunt of this rise in temperature due to the urban heat island effect. The built-up area trapping heat can increase urban temperatures by up to 8°C compared to the surrounding natural or rural areas. A recent study published by Malaysian scientists in the journal Scientific Reports indicates that the area affected by heatwaves in Peninsular Malaysia has been increasing at a rate of 8.98km²/decade, with durations extending by 1.54 days/decade since 1950.

The economic impact of increased temperatures in Penang can be categorised into six key areas:

1) energy
2) cost of living
3) work productivity
4) public health
5) tourism
6) loss of tax revenue

LST changes between 1993 and 2023 in one image produced based on (1).

Modern buildings are designed to require dominant energy consumption, including lighting, air conditioning and water heating. Increased demand for electricity will therefore lead to higher energy costs for households and businesses. Energy providers may need to invest in additional capacity loads. Additionally, extreme weather events can accelerate infrastructure damage, especially on façades and roofs. This also reduces the efficiency of large-scale solar energy systems and disrupts agricultural production, leading to food shortages and higher living costs, particularly affecting low-income groups.

Heatwaves can cause outdoor workers and builders in construction sites to experience heat stress, which can lead to occupational illnesses and injuries. Those who are older, overweight or prone to hypertension or heart disease are particularly at risk. As a result, work productivity will be affected, with workers needing to take additional precautions or even pause their operations. A 2019 study in the Ecological Economics Journal found that when feeling hot, survey respondents in Malaysia were only able to work at half their capacity, with annual productivity losses from heat stress estimated to be RM1,324 per person.

The rise in temperature also affects public health, especially among vulnerable groups such as infants and older adults. Heatwaves can increase cases of heat-induced kidney disease and other heat-related illnesses, putting a burden on caregivers who may need to take time off work. While there are studies in Europe on the economic costs of heat health stress, in Malaysia, accurate data are scarce due to the way heat stress or heat stroke is coded, normally as being respiratory or cardiac in nature.

Many tourists from temperate countries flock to the equator during the winter months, and that is when tourism thrives in Malaysia, especially in Penang. However, with the temperature hitting record highs, tourism will potentially be impacted. During heatwaves, the appeal of exploring outdoor areas is likely to diminish, with tourists either spending less time or money in sweltering outdoor areas or being pushed to choose cooler holiday destinations.

The social and economic costs of climate-induced temperature increases are real. Lower productivity rates, loss of business activity, fewer tourists and reduced tax revenue all contribute to a lower tax base for government revenue. Therefore, reducing carbon emissions and implementing adaptation measures to lower temperatures is crucial, particularly in urban areas.

Think City, together with the Penang Island City Council (MBPP), are currently implementing low-cost, nature-based interventions to address heat stress. These interventions include green façades and rooftops to cool buildings, tree-lined streets, green car parks to maximise shade, blue connectors for wind channelling and alternative building materials to reduce the urban heat island effect. In fact, Penang is ready to plant over a million trees across the state to commemorate Earth Day on 22 April this year. [1]

While it is important to be cognisant of the social and economic costs of climate-induced heat stress, we must double down on efforts to cool the city and reduce the impact of rising temperatures.

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Dr Matt Benson

is a Senior Director at Think City. He is a geographer specialising in the challenges of urbanisation.

Sofia Castelo

is a technical advisor to Think City. She is a climate change and landscape architect expert.