LONDON, 23 June 2026. The world is entering a cooling race.
Extreme heat is no longer only a weather problem. It is increasingly becoming an economic one, measured in lost productivity, strained power grids, rising infrastructure costs and growing pressure on labor markets.
The International Labour Organization estimates that heat stress could reduce global working hours by 2.2% by 2030, equivalent to roughly 80 million full-time jobs and annual economic losses of approximately $2.4 trillion.
At the same time, the world is on track to increase its stock of air conditioners from about 1.6 billion units in 2018 to 5.6 billion by 2050, according to the International Energy Agency (IEA).
That expansion amounts to roughly 10 new air conditioners being sold every second for the next three decades, highlighting how cooling is rapidly becoming essential economic infrastructure rather than a consumer luxury.
Labor Under Pressure
The first economic costs of extreme heat often appear in labor markets.
When temperatures rise beyond safe working thresholds, construction activity slows, agricultural output declines and outdoor labor becomes increasingly hazardous. In parts of South Asia and the Gulf, work schedules are already being adjusted to reduce exposure during the hottest hours of the day.
According to the ILO, agriculture is expected to account for nearly 60% of global working-hour losses linked to heat stress, while construction represents another major source of risk.
Emerging economies face some of the largest vulnerabilities.
A World Bank assessment found that between 160 million and 200 million Indians could face exposure to potentially lethal heat waves annually by 2030. The same report estimated that 34 million jobs could be affected by heat-related productivity losses, while demand for cooling could increase eightfold by 2037.
The consequences increasingly extend beyond traditionally hot regions. Heat waves across Europe, North America and East Asia have pushed electricity demand to record seasonal peaks, disrupted transportation systems and prompted governments to strengthen workplace-safety requirements.
The Cooling Boom
The response is turning cooling into one of the world’s fastest-growing infrastructure industries.
The IEA estimates that energy demand from air conditioning could more than triple by 2050 if current trends continue.
Without significant improvements in efficiency, cooling demand could eventually require as much electricity as China and India consume today, illustrating how the economics of cooling are increasingly becoming the economics of energy.
Governments are expanding access to cooling while attempting to maintain energy security. Utilities are modernizing grids to manage rising summer peak loads. Manufacturers are increasing production of air conditioners, heat pumps, industrial compressors, insulation materials and energy-efficient cooling systems.
Artificial intelligence is adding a powerful new source of demand.
The rapid expansion of AI is driving construction of data centers packed with high-performance processors that generate substantial heat. Cooling systems are becoming as strategically important to data-center planning as electricity supply, land availability and network connectivity.
The race is creating clear economic winners and losers.
HVAC manufacturers, industrial-compressor suppliers, insulation producers, grid-equipment makers and energy-efficiency specialists stand to benefit from rising investment. Sectors dependent on outdoor labor, regions with fragile electricity systems and economies unable to finance adaptation face growing risks.
The Energy Paradox
Cooling protects households, workers and businesses from rising temperatures, but it also places growing pressure on energy systems.
According to the IEA, air conditioners and electric fans already account for around 10% of global electricity consumption.
In many fast-growing economies, cooling demand is increasing more rapidly than demand from traditional industrial sectors, making it one of the most important drivers of future electricity investment.
The challenge is increasingly circular.
As temperatures rise, economies require more cooling. More cooling requires more electricity, infrastructure and capital investment. In many regions, cooling is becoming essential for maintaining productivity, public health and economic activity.
Yet expanding cooling capacity also increases pressure on power systems that are already struggling to keep pace.
Governments are attempting to balance those competing realities.
India’s India Cooling Action Plan seeks to expand access to cooling while improving efficiency standards. Similar initiatives are underway across Southeast Asia, the Gulf region and parts of Europe, where policymakers are investing in building efficiency, urban heat mitigation and more resilient electricity infrastructure.
Competitiveness in a Hotter World
The cooling race ultimately extends beyond comfort, energy consumption or climate adaptation.
Extreme heat affects agricultural productivity, healthcare costs, insurance risks, water resources and business operations. Regions capable of adapting through reliable electricity networks, efficient buildings and affordable cooling technologies may become increasingly attractive destinations for investment, manufacturing and economic activity.
Just as access to ports, railways and reliable electricity shaped industrial growth in earlier centuries, access to affordable cooling may increasingly influence where factories, data centers and workers can operate productively in the decades ahead.
Those unable to finance adaptation face rising productivity losses, mounting pressure on public services and growing economic costs.
The defining infrastructure challenge of the industrial age was power. In a hotter century, it may increasingly be the ability to keep that power and the people and industries that depend on it cool.