Economic Losses from Extreme Weather Are Costing US$200 Billion a Year

posted in: Articles, Blog | 0

Written By: Emma Websdale

Disaster-related economic losses caused by extreme weather events have amounted to nearly US$200 billion a year over the last decade, a figure likely to increase as climate change continues, warns the World Bank.
618500689According to a new World Bank report entitled Building Resilience: Integrating Climate and Disaster Risk into Development, disasters over the last 30 years globally have caused US$3,800 billion in economic losses. Approximately two-thirds of this amount has been attributed to extreme flooding, droughts and storms.

Estimating the cost of extreme weather events, including effects on jobs, property and infrastructure damage, the report found that extreme weather has caused $200 billion worth of damages annually over the past decade. This figure quadrupled the 1980’s figure of $50 billion.  The report also included the cost in lives: in the past 10 years 1.4 million people have died in extreme weather events.

“Economic losses are rising –from $50 billion each year in the 1980s to just under $200 billion each year in the last decade, and about three quarters of those losses are a result of extreme weather”, says Rachel Kyte, World Bank Vice President for Sustainable Development.

Kyte adds, “While you cannot connect any single weather event to climate change, scientists have warned that extreme weather events will increase in intensity if climate change is left unchecked.”

Examples of catastrophic economic damage from extreme weather events are not hard to find. In 2010, hurricane Thomas wiped out the equivalent of 43% of St Lucia’s gross domestic product (GDP). The drought at the Horn of Africa in 2008-2011 caused $12.1 billion in economic losses in Kenya alone.

The report estimates that by 2030, 325 million people living in developing countries could be exposed to weather disasters as greenhouse gas emissions continue to exacerbate climate change. In response to this concern, the World Bank urges developed countries to help vulnerable regions and countries prepare for weather-related risks and build long-term resilience against climate change threats. The alternative, doing nothing, will lead to disaster and climbing future costs.

“Unless we help vulnerable and poor nations, regions and cities prepare and adapt to current and future climate and disaster risks, we could see decades of development progress rolled back”, says the report.

The World Bank report emphasizes that – although the cost of developing safer buildings, infrastructure and state-of-the-art weather warning systems will be high – this investment will make communities more prepared to cope with disaster and will help them avoid the tremendous overall costs of unsafe relocations, cultural and social disruption and loss of life associated with recent extreme weather events.