# Extreme Climate Events and Energy Market Vulnerability: A Systematic Global Review
## 1 Introduction  
Extreme weather events that occur unusually in various parts of the world end up affecting the stability of energy markets, in addition to having socio-cultural implications in the regions where they occur. Among the main events are hurricanes, floods, droughs, winter storms, and heat waves that are influenced by global climate change and cause physical damage to energy infrastructure, which in turn triggers supply disruptions, sudden increases in demand during climate crises, and volatility in electricity, gas, and water prices. Extreme weather events have demonstrated the ability to affect electrical systems and related infrastructure, causing major interruptions in the generation and production of electrical energy [1]. From here, socio-cultural problems arise since people during these types of catastrophes, particularly in developing countries, face challenges in accessing essential energy services. Extreme weather events on a global scale have led to damage to infrastructure with significant losses and economic impacts. There are existing records of severe damage to energy infrastructure in North America and Central Europe, caused by winter storms, droughs, and floods, and consequently, causing massive interruptions in the electricity supply and producing large economic losses and serious socio-cultural problems [2]. As a matter of fact, multiple researchers have carried out different works in order to find relationships between a specific climatic event and the different implications they haveon the population from the economic, social, and structural point of view. As mentioned above, extreme weather events affect energy demand, and the resilience of supply systems can lead to around 16% of losses in the reliability of the electrical system [3]. Such events not only generate supply disruptions and electrical energy price fluctuations, but also imply an increase in the financial risk of energy markets, particularly in the oil and natural gas pricing market [4] Climate catastrophes such as heat waves and droughts, among others, increase the costs of renewable energy production (for example, in the case of hydroelectric plants), immediately affecting the electricity sales prices [5]. Likewise, extreme weather events can lead to a decrease in energy demand in some sectors, although in others the growth of demand is brutal. This is the case of cooling systems, for example in heat waves [6], whose volatility has negative consequences for both consumers and consortia, leading to an increase in operating costs in order to guarantee the supply of electricity in adverse weather periods [7]. Regarding the oil and gas markets, this type of industry is prone to extreme events, such as hurricanes, which directly affect crude oil and gas production and its transportation platforms. As a result of the infrastructure deterioration and consequent interruption in supply, an increase in the price of crude oil in the markets will be detected. Price increases have a knock-on effect on other economic sectors, which adds more money losses than those directly produced by the hurricane [8]. For instance, in the case of Hurricane Katrina, the price of crude oil increased by approximately 20% within a week after the hurricane made landfall. Similarly, extreme events, such as forest fires and snowstorms, have also affected the electricity transmission infrastructure, increasing repair and maintenance costs with negative effects on consumer rates [9]. An analysis carried out by Carty [10] points out that instability in food prices is linked to the effects of adverse climatic phenomena, since energy costs will have repercussions throughout the supply chain, especially in the agricultural sectors. These widespread effects suggest the importance of improving energy planning, as well as climate risk management as a way of mitigating the economic effects of events. Speaking specifically in Latin America, countries such as Colombia have developed a strong dependence on energy produced by hydroelectric plants.