Heat Stress Is Draining Global Worker Productivity, and It Shows Up in the Price of Carbon

Every ton of carbon dioxide released into the atmosphere has long carried a hidden price tag, but the full extent of that bill has remained stubbornly difficult to calculate. Now a team of economists and climate scientists at the University of California, Davis, has produced one of the most detailed accounting efforts to date, and the results are striking. According to the study, published in the journal Nature Climate Change, each ton of carbon dioxide emitted in 2025 cost the global economy approximately $41 in lost worker productivity alone. That figure, derived from a sophisticated fusion of climate projections and labor market data, represents a major step forward in understanding how rising temperatures translate directly into economic damage, one sweltering shift at a time.

The research, led by Frances Moore, a professor in the UC Davis Department of Environmental Science and Policy, addresses a gap that has persisted in climate economics for years. While the deadly health consequences of extreme heat have been studied extensively, the slower, quieter erosion of human productive capacity has been harder to quantify. Moore and her colleagues argue that this omission has led policymakers to systematically underestimate the true cost of carbon emissions. Based on the new numbers, labor losses emerge as the second-largest contributor to the total social cost of carbon, trailing only heat-related deaths. That positioning is significant, because it means the economic harm flowing through sweat-soaked workdays rivals nearly every other category of climate damage except mortality itself.

At the heart of the analysis lies the social cost of carbon, often abbreviated as SC-CO2, a metric that attempts to capture the quantifiable cost of one additional ton of carbon dioxide emissions. The measure is far more than an academic curiosity. It underpins cost-benefit analyses for infrastructure planning, informs utility regulation, and provides the analytical backbone for carbon tax policies around the world. When governments weigh whether to build a pipeline, tighten emissions standards, or invest in renewable energy, the social cost of carbon determines how much weight future climate damages receive in the ledger. A metric that omits labor losses, the researchers contend, produces a distorted picture of what emissions actually cost society.

The study lends strong support for a social cost of carbon value of $200 per ton, a figure similar to the estimate produced by the U.S. Environmental Protection Agency in 2023. That alignment matters because current federal guidance does not recognize the metric and actively discourages monetizing the impacts of greenhouse gas emissions in regulatory analysis. The researchers push back against that stance with unusual directness, stating in the paper that we can confidently rule out a social cost of carbon of zero or below. In other words, whatever uncertainties remain in the models, the direction of the damage is unambiguous. Moore emphasized that the science of evaluating climate damages is maturing rapidly, and that the social cost of carbon is now a metric that should be used, one that is ready to help inform good climate policy analysis.

So how does one actually measure the productivity cost of heat? The methodological core of the study combines projections of a heat stress metric known as the wet-bulb globe temperature, or WBGT, with job- and region-specific estimates of work intensity and outdoor exposure across different economic sectors. Unlike a simple thermometer reading, WBGT captures the physical risks of hot temperatures by accounting for the weather variables that influence the body’s ability to dissipate heat, including humidity and wind speed. This distinction is critical to understanding why heat is so dangerous to workers. Human bodies cool themselves primarily through the evaporation of sweat, and when the air is already saturated with moisture, that evaporative process slows or stops entirely. A humid 35-degree day can impose far greater physiological strain than a dry 40-degree day, and WBGT is designed to reflect that reality.

The physiological mechanics are unforgiving. When the body cannot shed heat efficiently, core temperature rises, and the brain responds by reducing physical exertion, effectively forcing workers to slow down as a protective mechanism. This is not laziness or malingering; it is thermoregulation. But the economic consequence is measurable: fewer bricks laid, fewer acres harvested, fewer units assembled. The study found that exposure to heat stress among both indoor and outdoor workers varied dramatically across the globe depending on the local environment, the strenuousness of the work, and access to shade and air conditioning. Highly populated areas meeting critical thresholds for heat and humidity were particularly affected, with India, Nigeria, China and Pakistan standing out, along with countries in the Middle East and sub-Saharan Africa. The geography of the damage is thus deeply unequal, concentrating economic losses in regions that have contributed relatively little to cumulative emissions.

Occupation matters as much as geography. Agricultural and construction laborers are far more exposed to heat than office or service workers because they often perform strenuous work outdoors, directly under the sun, during the hottest hours of the day. Yet the study makes clear that indoor workers are not insulated from the risk. In warehouses, garment factories, and workshops across the developing world, indoor laborers with minimal or no air conditioning face heat burdens that can approach those of outdoor work. To illustrate the scale of the disparity in protective infrastructure, the researchers cite a dataset of residential air conditioning adoption across 33 countries showing penetration rates ranging from zero percent in South Sudan to 90 percent in Japan. That gap means a worker performing identical tasks in two different countries may face radically different thermal realities, and correspondingly different productivity losses.

The findings arrive at a moment when heat extremes are intensifying faster than many adaptation efforts can keep pace. Moore’s message to employers and policymakers is blunt: heat is very dangerous, and it needs to be treated as the real health hazard that it is. The study points to a menu of practical interventions that can protect workers, including more shade, access to water, more frequent breaks, and shifting work to cooler hours of the day when possible. Air conditioning remains the most powerful technological buffer, but its cost and energy demands place it out of reach for much of the world’s vulnerable workforce. The accompanying image from the research team, showing a cotton trailer outfitted with benches and a sunshade offering farmworkers a reprieve from the sun as they pick cantaloupe melons in Firebaugh, California, captures the kind of low-cost, immediately deployable adaptations that can make a difference even before large-scale infrastructure arrives.

The broader implication of the research is that the social cost of carbon has been running an understatement problem. By incorporating labor and agricultural damages that earlier estimates missed or treated crudely, the study strengthens the case for valuing carbon emissions at roughly $200 per ton, a number with real teeth for regulatory analysis. Moore noted that the research community is getting better and more confident at evaluating climate damages, and that this confidence should embolden policymakers to use the metric rather than ignore it. The work was funded by a coalition of scientific institutions, including the National Science Foundation, the National Institutes of Health, NASA, and several fellowship programs, and included co-authors from Purdue University, Stanford University, and UC Davis. As global temperatures continue to climb, the study suggests that the sweat-soaked economics of labor will only grow heavier, and that ignoring it means pricing carbon at less than it truly costs the world.

Subject of Research: Economic quantification of heat stress impacts on global worker productivity and the social cost of carbon

Article Title: The high cost of climate change on worker productivity

Article References: The high cost of climate change on worker productivity. (n.d.). Original publication

Image Credits: AI Generated

DOI: Not provided

Keywords: climate change, heat stress, worker productivity, social cost of carbon, wet-bulb globe temperature, labor economics, UC Davis, Nature Climate Change, air conditioning, agricultural workers, carbon emissions, heat adaptation