[The Economics of Heatwaves②] Heating Up the Korean Peninsula... 350 Billion Won in Direct Losses in 2018 Alone, Agricultural, Fisheries, and Livestock Damage, Price Increases

Source=Korea Environment Institute Climate Change Risk Research Group '2020 Heatwave Impact Report'

[Asia Economy Reporter Han Jinju] Following the end of the monsoon season, the scorching heat continues, leading to ongoing heatwave alerts. Heatwaves generally occur when the lower atmosphere over South Korea is dominated by the hot and humid North Pacific High and the upper atmosphere by the hot and dry Tibetan High. A heatwave advisory is issued when the daily maximum temperature is expected to remain at or above 33 degrees Celsius for two or more consecutive days, and it is upgraded to a heatwave warning if the maximum temperature reaches 35 degrees Celsius or higher. The Korea Meteorological Administration (KMA) not only issues heatwave alerts but also conducts heatwave impact forecasts categorized into four levels: interest, caution, warning, and danger.

According to an analysis by the KMA last year, the frequency of heatwaves and tropical nights has been on the rise compared to the past, with the last decade seeing a significant increase?14.0 days of heatwaves and 9.0 days of tropical nights on average. The number of heatwave/tropical night days by decade is as follows: 1970s (8.3/4.2), 1980s (9.7/4.2), 1990s (9.6/5.8), 2000s (9.2/5.1), and 2010s (14.0/9.0). The annual average is 10.1 days for heatwaves and 5.7 days for tropical nights. It is projected that in the latter half of the 21st century (2071?2100), the number of heatwave days will increase to 22 days.

Heatwaves and tropical nights frequently occur in August (heatwaves 5.4 days/tropical nights 3.1 days) and July (heatwaves 3.9 days/tropical nights 2.4 days). Their correlation is very high, especially during July and August. Regionally, heatwaves occur most often in inland Gyeongsang Province, including Daegu (27.6 days), Hapcheon (24.3 days), and Miryang (22.8 days). Tropical nights are most frequent in Jeju Island, particularly Seogwipo (31.0 days) and Jeju (29.9 days), and also show high frequency in southern regions such as Pohang (19.3 days), Daegu (18.5 days), Busan (17.1 days), and Mokpo (16.5 days).

The record-breaking heatwave occurred in 2018. The hot and dry Tibetan High and the hot and humid North Pacific High developed unusually stronger than average and expanded over the Korean Peninsula, covering both the upper and lower atmosphere with hot air, resulting in an extreme heatwave. In 2018, the highest temperatures since meteorological observations began were recorded, and the highest number of heatwave days occurred, leading to its designation as a natural disaster. On August 1, 2018, the highest temperature ever recorded in Hongcheon was 41 degrees Celsius, and record-high temperatures were observed in Seoul, Chuncheon, Suwon, and Daejeon. The nationwide average number of heatwave days was 31.5, breaking the previous record of 31.1 days set in 1994, and was more than three times the average level of 10.1 days. That year, the number of heat-related illness patients was the highest at 4,526.

Heatwaves directly and indirectly affect health, agriculture, livestock, fisheries, energy, transportation, and the overall socio-economic sectors, increasing the burden on vulnerable groups. According to the ‘2020 Heatwave Impact Report’ by the Korea Environment Institute’s Climate Change Risk Research Group, the incidence rate of heat-related illnesses per 10,000 people among those aged 65 and older is 9.8, more than twice that of the population under 65 (4.3).

Source=Korea Meteorological Administration

As the number of heatwave days increases, the disparity in heat-related illness incidence rates among occupational groups widens. The incidence rate per 10,000 people is 15.1 for outdoor workers and 2.4 for other occupational groups. Looking at specific occupations, outdoor workers exposed to heatwaves, such as those in electricity, gas, and water supply, agriculture, forestry, fisheries, and mining, have relatively higher incidence rates of heat-related illnesses. In 2018, 28.7 heat-related illness cases per 10,000 outdoor workers were reported, compared to 3.5 cases in other occupational groups. By income level, the incidence rate per 10,000 people was 13.8 for low-income groups (medical aid recipients) and 4.8 for high-income groups (top 20%).

Heat stress caused by heatwaves increases physical and mental fatigue among workers, leading to decreased work capacity. In 2018, work efficiency among workers decreased by more than 13%, and occupational groups with high heat-related illness incidence saw an average work efficiency decline of over 25%. Assuming an 8-hour workday, the loss of labor hours due to reduced work efficiency from high temperatures was approximately 510,000 hours per day, resulting in an economic loss of about 353.9 billion KRW when calculated at the minimum wage. Considering damages and indirect impacts on agriculture, livestock, and water resources, the total damage is estimated to be even greater.

By sector, power demand decreases as temperatures rise up to the 18?21 degrees Celsius range, but beyond this point, peak power demand increases sharply. When temperatures exceed 30 degrees Celsius, the number of crop damage incidents rises. Heatwaves cause imbalances in agricultural supply and demand, leading to price increases and higher household expenditures. For example, for cabbage, a 1-degree Celsius increase in daily average temperature raises the retail price by 289 KRW compared to the previous day, and a 1-degree Celsius increase in monthly average temperature raises the price index by 743 KRW compared to the previous month. In August 2018, with a 1.8-degree Celsius rise in monthly average temperature, additional household consumption expenditures ranged from 441 KRW to 1,363 KRW per household. The number of livestock deaths also increased due to the rise in the Temperature-Humidity Index (THI).