OPEC Fund Quarterly - 2025 Q2

TOURISM AND CLIMATE CHANGE

In Major League Baseball games, researchers estimate a US$1.53 utility loss per hour of exposure to high temperatures.

to be a chili shortage caused by a drought in

Mexico. Last year, another hiccup delayed production because the chilis were not

ripe enough to harvest. Supply chain issues are not the

only problem in the chili market, as you cannot simply swap one type for another. Needless to say, everyone from chefs to Sriracha sauce makers are trying to capture a particular taste and temperature. Losing that ability isn’t a minor thing either, it marks a fundamental change to food culture itself. Along with its list of World Heritage Sites, the United Nations Educational, Scientific and Cultural Organization (UNESCO) also has various lists of intangible cultural heritage. Beyond centuries-old ruins or contemporary examples of important architecture, intangible cultural heritage can include areas as diverse as traditional silk production in Central Asia, shrimp fishing on horseback in Belgium and traditional music and dance in Côte d’Ivoire. Food also features on UNESCO’s Intangible Cultural Heritage Lists, such as the cuisine from the Mexican state of Michoacán, which relies on chili peppers in order to deliver that distinctive kick – without which, the taste that has existed for centuries may disappear forever. “It sounds terrible, but once these peppers are gone, you cannot recreate their original taste,” agronomist Jorge Berny told Bloomberg. “You can replace them with something else, but it’s not the same.”

Chillier chilies It will come as no surprise that a warmer world will make it harder to reliably grow crops, especially in agricultural areas that must now contend with more extreme natural disasters like floods and droughts. What might be a surprise is that those crops won’t be quite the same as what we had been used to. Bloomberg, the news and data provider, recently reported that chili peppers are losing their heat due to extreme weather in areas where the peppers are commonly grown. Not only has supply been disrupted and have prices gone up, but the spiciness of chilis has gone down. According to the article, potent peppers thrive in hotter and drier conditions. More intense rainfall and extra moisture dilute the heat-producing alkaloids that make particular types of chilis so sought after in cuisines around the world. This is not the first time spicy foods have made global news. In 2022, Huy Fong Foods temporarily halted production of their popular spicy red Sriracha sauce, commonly sold in a red plastic bottle emblazoned with a rooster on its label. The culprit turned out

less likely to attend games in extremely hot or cold temperatures (although the latter is far less frequent due to the MLB’s spring-to-fall schedule). The researchers estimate a US$1.53 utility loss per hour of exposure to high temperatures. Given all the hours played in so many locations, this translates to what the study calls “nontrivial aggregate welfare effects” – or in layman’s terms, a significant hit to revenue every time your team plays in high temperatures. Perhaps that’s why you see more and more baseball stadiums built with retractable roofs, which can be opened or closed to keep the temperature pleasant for the tens of thousands of fans that (usually) pack the stadiums. Of the 30 MLB stadiums, seven have such a feature. The newest stadium, planned for Las Vegas, will be completely enclosed. In the coming decades, climate will play a bigger role in how and where we watch sports. This season, Florida’s Tampa Bay Rays play in a much smaller minor league stadium, while their MLB ballpark is being repaired following extensive damage from 2024’s Hurricane Milton. Football (soccer) fans

In Mexico, extreme weather is disrupting production, supply and even the flavor of chili peppers.

will recall the 2022 World Cup’s move from summer to late in the year to dodge host Qatar’s searingly hot temperatures, as well as the giant air

conditioning units keeping players and fans cool during an unprecedently hot tournament. Such seems to be the fate of many global outdoor sports: high temperatures will not go away anytime soon and anyone wishing to play ball will have to adapt to the new normal of extreme temperatures.

16

Powered by