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Almost half of the world’s population will be living with extreme heat by 2050 if global warming continues on its current path, according to a new study. This suggests that the economic impact could be felt soon in developing countries due to rising demand for energy to power air conditioning.
The proportion of the world’s population living with extreme heat will almost double to 41% in the coming decades from 23% in 2010, according to the findings from the University of Oxford published in Nature Sustainability.
The largest affected populations will be in India, Nigeria, Indonesia, Bangladesh, Pakistan, and the Philippines, the study predicts, while countries in colder climates will see a larger relative change in uncomfortably hot days.
The increase in extreme heat is expected to lead to a big rise in energy demand for cooling systems as the world passes 1.5°C of global warming above pre-industrial levels in the coming years.
“Many homes may need air conditioning to be installed in the next five years, but temperatures will continue to rise long after that if we hit 2°C of global warming,” says Dr Jesus Lizana, lead author and associate professor in engineering science at Oxford University.
Impact on inflation
This imminent increase in demand for energy for cooling in the countries that are set to face an increase in extreme heat is likely to have a significant impact on inflation, according to Fulvia Marotta, an honorary research associate on the macroeconomics of climate change at Oxford’s Smith School of Enterprise and Environment, and a senior research economist at De Nederlandsche Bank.
“These projections are really striking and will add extra pressure to already fragile economies as the demand for energy will probably grow faster than infrastructure capacity. If that gap persists, it could generate sustained inflationary pressures,” Marotta said.
Those countries are also likely to need to import more fossil fuels, which will create exchange rate pressures and second-round effects on inflation, she said.
Fulvia was commenting as an expert in climate change economics and not as an author of the study.
Meanwhile, developed economies are set to see a bigger jump in the number of days with extreme heat, but Marotta predicted this would have less of a structural impact on inflation.
If global warming reaches 2°C, the report predicts that Ireland could see a 230% increase in uncomfortably hot days, Norway could see a 200% rise, the UK, Sweden, Finland a 150% jump, and Austria and Canada a rise of 100%.
That could pose a challenge for buildings and infrastructure in these countries as they are predominantly designed for cold conditions, the report said. However, demand for heating in countries like Canada and Switzerland will decrease.
“This is going to translate into some seasonal energy price spikes and somewhat higher short-term volatility, but in advanced economies the overall impact should remain manageable,” Marotta said.
‘A wake-up call’ for regulators
A recent DNB working paper shows that a 0.5°C rise in global temperatures leads to a 0.65 percentage point increase in five-year-ahead inflation expectations, with effects particularly pronounced among consumers with greater awareness of climate change.
However, Marotta noted that extreme heat would have many other economic implications beyond inflation and supply and demand shocks, such as a hit to mortality and labour productivity in countries facing the biggest rise in temperatures.
“Our findings should be a wake-up call,” says Dr Radhika Khosla, associate professor at the Smith School and leader of the Oxford Martin Future of Cooling Programme. “Overshooting 1.5°C of warming will have an unprecedented impact on everything from education and health to migration and farming.
Regulators need to move beyond traditional economic models to assess and understand the devastating and compounding impacts of climate change, according to a recent survey of climate scientists.
While climate stress testing and estimates used by central banks and other economists use mean annual temperature and GDP, climate scientists believe the estimates are too low, as relying on just GDP does not capture the full picture.
The research on extreme heat, which includes an open-source dataset of global heating and cooling demand, will be invaluable for central banks as they work on building future scenarios and stress tests around climate change, Marotta said.
“I would hope that a data set like this will end up being part of some energy price or energy demand scenarios that then will affect how we forecast inflation,” Marotta said.
This page was last updated February 16, 2026
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Emma Thomasson is a British journalist, consultant and trainer based in Berlin. She is an expert in economics, politics, business and technology. She previously worked for Reuters as a correspondent and bureau chief in Germany, Switzerland, the Netherlands, South Africa and the UK.
