This paper investigates the nonlinear impacts of El Niño-Southern Oscillation (ENSO) on the global economy, particularly under climate change. Using a nonlinear climate-economy model and historical data, the authors find that El Niño events cause significant economic damage that persists for three years after the initial shock, resulting in multi-trillion dollar losses. La Niña impacts are found to be asymmetric and weaker. Under climate change, economic losses grow exponentially with increased ENSO variability, potentially leading to substantial additional losses in the 21st century under high-emission scenarios.

Yi Liu, Wenju Cai, Xiaopei Lin, Ziguang Li, Ying Zhang