In 1996, ranchers in Arizona and New Mexico faced drought, dry wells, high feed prices and low stock prices when they tried to sell. External factors such as low global grain reserves and drought in Mexico increased the vulnerability of the ranching sector in Arizona, New Mexico, and other U.S. states. Another climate-sensitive sector is energy, with both supply and demand varying with climate. Hydroelectric supplies are clearly the most climate sensitive. Extreme events can cut power supplies, and it is important to remember that many people cannot afford to heat or cool their homes properly.
Hydroelectric generation is very dependent on climate.
Energy consumption also varies seasonally and interannually according to temperatures. Heatwaves and severe storms can disrupt power supplies. Those who cannot afford to pay for heating and air conditioning may suffer cold and heat stress-related illness and mortality. Another highly sensitive sector is forestry, where droughts cause economic and ecological damage. This too has been illustrated by severe fires and high economic costs of losses and fire fighting in recent years.