Climate Series 5: The probability of extreme heat waves is expected to rise from 2% to 93% by 2090 – placing increasing strain on Malaysia’s industrial sector

Example 1: Worker productivity in the manufacturing sector

• Extreme heat can affect the productivity of workers through impacting workers’ physical and cognitive capacity, increasing absenteeism from health issues, and disrupting transportation. This reduced productivity can affect profit margins, with 2.7 billion¹ potential labour hours lost form heat exposure in 2023 in Malaysia, a potential income of US$9.2 billion. The agricultural and construction sectors are most affected by this, accounting for 33% and 32% of these potential hours lost respectively.

Example 2: Power generation

• Electricity generation is estimated to reach its maximum at 27⁰C. At higher temperatures, conventionally used cooling systems fail, leading to capacity decreases of up to 10². Rising temperatures pose a significant threat to the power generation sector as reduced operational capacity struggles to meet the additional pressure to meet rising energy demand.

Example 3: Oil and gas

• Activities within oil and gas production are highly water-intensive, for example due to the need  for drilling fluid and coolants for internal combustion engines. Under all emissions pathways, the probability of Malaysia experiencing a year with a severe drought is projected to double by the 2090s³.
• Increased incidence of wildfires is also associated with higher temperatures and droughts³. Oil and gas fields located in high-risk areas for wildfires are exposed to the risk of their flammable substances being ignited by airborne embers. This can cause property damage and disruption to operations that could ultimately result in increased costs and financial losses for companies. Wildfires can also exacerbate water shortages as they impact the hydrology of an area.