How El Nino, climate change are affecting economies across the world

Tribune Web Desk

Vibha Sharma

Chandigarh, January 22        

Climate pattern El Nino, which has thrown the weather-linked tourism industry in the hills of north India in a tizzy, is also impacting the shipping industry in the far-off Panama Canal in Central America. 

According to reports, the Panama Canal Authority has now scaled up the expected losses due to dipping water level in the key waterway to “$500 million and $700 million in 2024 compared to previous estimates of $200 million”.

Experts are blaming it on climate change and El Nino—the warming of surface temperatures in the eastern and central Pacific Ocean—which not only causes hot and dry weather in Asia but impacts weather in several parts of the world.

EL Nino—little boy

El Nino, which means little boy in Spanish, is described as unusual warming of surface waters in the eastern tropical Pacific Ocean.

It basically is the “warm phase” of a larger phenomenon called the El Nino-Southern Oscillation while La Nina, which means little girl in Spanish, is the “cool phase” of ENSO.

The impacts of El Nino are felt in many ways, including ocean temperatures, the speed and strength of ocean currents, weather, rains, snow etc. Though a periodic phenomenon, its impacts are getting exacerbated by climate change, a reason why the UN recently again urged drastic cuts in emissions.

Panama Canal

El Nino-linked drought that started impacting traffic in the canal around July-August 2023 appears to be worsening.

Officials have ordered restrictions on shipping traffic in the canal because of reduced water levels. 

According to reports, the authorities have slashed ship crossings by 36% in one of the world’s most important trade routes.

The chaos on the key maritime route has added to the worries of the beleaguered shipping industry facing trouble at another key sea route in the Red Sea due to attacks by Iran-backed Houthi rebels.

Economic impact

Panama Canal is one of the world’s busiest waterways, linking the Pacific and Atlantic Oceans.

When the Suez Canal remained blocked in March 2021 for around six days due to the Ever Given (a container ship) running aground, it also left around 370 ships and about $9.6 billion world trade stranded in the canal.

According to reports, the new cuts on the Panama route are expected to deliver a greater economic blow than expected earlier.

Canal administrators say it could cost them between $500 million and $700 million in 2024 compared to previous estimates of $200 million. Cutting the daily ship crossings to 24 from 38 a day is a “significant reduction”, they add.

Normally there are 38 crossings in a day.

Attributing the situation to El Nino and climate change, the authorities have called for new water sources for canal operations and human consumption. The lakes that provide water for the canal are also the source of supply for more than 50% of the country.

The effect of climate change and global warming is no longer a thing of the future; real-time impacts of climate change have already started affecting the world economy and trade. 

While ships are taking detours to avoid the delays, they are expected to push up freight costs and affect consumer prices, say experts.

Panama Canal and El Nino connection

Canal operations depend upon lakes where the levels are crucial to maintain operations. The complicated canal lock system lifts ships up to artificial freshwater lakes and then lowers them at the other end.

Transporting ships through the system of locks consumes vast amounts of fresh water. A ship requires around 200 million litres of freshwater to move it through the locks. The water is provided by two artificial lakes which supply the canal and also provide drinking water. 

The lakes are the main source of drinking water for Panama City.  

Since much of the freshwater gets drained in the sea, the authorities have been using methods to store and reuse some of it. 

Hills, tourism and El Nino

Kashmir’s main winter tourism attractions like Gulmarg have remained snow-less this season, resulting in a decline in the number of tourists and affecting the local economy. 

In Himachal Pradesh, the upper reaches, including Lahaul-Spiti, and capital Shimla have also missed their date with snow. 

Popular hill stations in other parts of the Himalayas, including in Uttarakhand, are also facing similar weather conditions this winter season, all of which is being pinned on the prevailing El Nino weather phenomenon. 

While there has been hardly any snow in the upper reaches, plains of northwest India—the Jammu region, Punjab, west Rajasthan and Haryana, Chandigarh, Delhi, western Uttar Pradesh—have also seen very little or no rains and below-normal day temperatures.

While snow-bereft peaks spell disaster for the tourism industry of the hill states, the overall impact is much larger and wider. Apart from impacting horticulture and agriculture, the change in weather conditions can result in serious water scarcity in the summers.

According to the IMD, light rains and snow can be expected over the Western Himalayan Region (WHR) from January 25.

Global warming and WDs

Snow and rains in the WHR are due to several contributing factors, the main being WDs—the moisture-laden systems originating over the Mediterranean Sea.

Travelling from the western to the eastern direction, they bring rain and snowfall upon its arrival in the Western Himalayan Region.

The long gap allows chilly northwesterly winds from mountains to affect plains for longer times, leading to fog, absence of the sun for longer duration and radiation imbalance.

In the ongoing winter season, WDs have been few and far between, a reason why north India has mostly remained dry. 

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