Risk 9: El Nino is back

After a four-year absence, a powerful El Nino climate pattern will peak in the first half of this year, bringing extreme weather events that will cause food insecurity, increase water stress, disrupt logistics, spread disease, and fuel migration and political instability.

El Nino is a predictable pattern that increases the frequency and magnitude of extreme weather events such as heat waves, droughts, storms, and floods due to higher global temperatures stemming from warmer currents and winds in the Pacific Ocean. The last time a strong El Nino occurred (in 2016), it contributed to making that year the hottest on record. Since then, however, baseline temperatures have increased further owing to climate change. With El Nino peaking in the first half of the year and its effect on global temperatures lagging by a few months, 2024 will likely set a new record.



El Nino will affect much of the world, but countries in the Indo-Pacific, Latin America, and Southern Africa will be hit hardest. South and Southeast Asia, Central America, northern South America, and Australia all risk prolonged dry periods and record high temperatures, increasing the likelihood of unusually severe and widespread drought. In Brazil, dry conditions in parts of the country will exacerbate the risk of fires, accelerating deforestation and threatening sources of fresh water and hydroelectric power generation. The northern US and Canada are also likely to experience warm, dry weather, leading to elevated forest fire risk after an unprecedented 2023 season that saw fires rip through Canadian forests and blanketed New York under a thick cloud of smoke. Further south, increased rainfall could cause flash flooding in California after years of drought, while the Southeastern US is also expected to see higher than normal rainfall. Eastern Africa will face a higher risk of flooding in the eastern Horn and of drought further inland, while Southern Africa could experience elevated temperatures and increased drought.

In some regions, extreme weather caused by El Nino will threaten agricultural production, leading to potentially severe disruptions in food supplies. In South and Southeast Asia, poor harvests of rice, wheat, corn, palm oil, sugar, and coffee would be especially disruptive, given already high food prices. Drought in Southern Africa would particularly affect South Africa, Zimbabwe, and Mozambique, the region's largest agricultural producers of wheat and corn, while droughts in Brazil and Australia could further constrain supplies of wheat, corn, and rice. Livestock and fisheries will be exposed to an increased risk of serious losses owing to severe weather.

Localized disruptions to food supplies in some regions will increase food prices, heighten food insecurity, and provoke unrest. Though some global staple prices have retreated from recent highs, renewed price pressures will drive social and political instability in countries where food prices remain elevated, such as Pakistan, Sri Lanka, the Philippines, Indonesia, and Malaysia. High food prices will also increase instability in regions such as North Africa and the Middle East that are heavily dependent on food imports, with Egypt, Tunisia, and Lebanon among the most vulnerable countries.

El Nino will increase water stress in regions with a high concentration of water-intensive industries—a global risk we highlighted last year that El Nino is set to exacerbate. Droughts will make the logistics of river and canal transport more challenging. Even lower water levels in the Panama Canal will more dramatically disrupt one of the world's busiest shipping hubs. Reduced hydroelectric and nuclear power generation are a related concern, especially in parts of South America, South and Southeast Asia, Europe, and East Africa. Lastly, competition over shared water resources will intensify between neighboring countries such as Ethiopia and Sudan, India and China, and India and Pakistan.

El Nino will also increase the chance of natural disasters caused by extreme weather events such as fires, cyclones, landslides, and floods. These occurrences will bring downside risk for homes, businesses, and infrastructure, with important implications for a global insurance industry already reeling from the consequences of climate change. In some inundated areas, tropical diseases will become more frequent, with a heightened risk of spikes of cholera in East Africa and dengue fever in South and Southeast Asia and Central and South America.

The combination of food insecurity, water stress, and natural disasters will put the most pressure on countries with limited adaptation capabilities—many of them already suffering from elevated political and economic fragility. This will threaten lives and livelihoods among the most vulnerable populations in the most vulnerable countries, driving internal migration (in Africa, Asia, and the Middle East) and cross-border refugee flows (in the Americas).