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Typhoon Haiyan

Climate Change Losses Cost $200 Billion over Last Decade

Typhoon HaiyanEconomic losses from extreme weather events have risen from an annual global average of about $50 billion in the 1980s to close to $200 billion over the last decade, according to the report released today by the World Bank.

Building Resilience: Integrating Climate and Disaster Risk into Development, cites the weather-related damage figure from Munich Re insurance group and warns that the poorest nations in Africa and Asia are among the most vulnerable to climate– related losses. It also says these financial losses are concentrated in fast-growing, middle-income countries because such countries’ high-value assets are becoming more exposed. The average impact of disasters in such nations equaled 1 percent of gross domestic product between 2001 and 2006 — 20 times higher than the average for high-income countries.

The World Bank says climate-resilient development is the answer — but warns it isn’t cheap, with upfront costs running as much as 50 percent higher than traditional development. These investments will pay off in the long-run, the report says.

A study to calculate the economic risk US industries face from climate change is being funded by New York City mayor Michael Bloomberg, billionaire Tom Steyer and George W. Bush-era Treasury secretary Henry Paulson.

If US businesses act now to reduce GHG emissions by an average of 3 percent annually, they can save up to $190 billion in 2020 alone, or $780 billion over 10 years, according to a report published in June by World Wildlife Fund and CDP.

Photo Credit: Typhoon Haiyan by Richard Whitcombe/Shutterstock.com

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5 thoughts on “Climate Change Losses Cost $200 Billion over Last Decade

  1. Any consultant knows they must represent their client and develop an answer as close as legally possible to the one that their client desires.

    Since the study was funded by Mayor Bloomberg, the results aren’t exactly shocking.

  2. On paper it looks like the amount of damage as a result of extreme weather events has quadrupled in the past 30 or so years, but the article doesn’t state whether the $50 billion is in 1980 dollars or 2013 dollars. I’m assuming the latter part of this would be considered a deceptive practice on the part of the World Bank. Even so, you can’t blame every extreme weather event on global warming nor does it take into account tThe fact that there is somewhere around an extra billion people in the world since the 1980s.

  3. Jon: The report identified in the article was not funded by Mayor Bloomberg. It was released by the World Bank – as reported in the very first paragraph of the article. Quit being so quick to denounce results that aren’t in agreement with your preconceived opinions (or at least, try to get your facts straight first).
    The study funded in part by Bloomberg is a completely different study whose results have not yet been released. According to the Environmental Leader article on the Bloomberg study, “The Steyer-Paulson-Bloomberg climate study announcement echoes US firms’ statements that climate change is affecting businesses’ bottom lines and their strategies”.

  4. Enviro Equipment: The figures stated in the article are all in 2012 dollars, so inflation is properly removed from consideration and the four-fold increase noted is in terms of real costs.
    And really, an increased population is no excuse. Population has not increase four-fold since the 1980s. An increase of one billion people is les than a 20% population rise. Since extreme weather related losses have increased four-fold (i.e. 400%), clearly something is going on that is climate change related. And that something is not good.

  5. Let me help on this one – Enviro Equipment – sweetie – I can call you sweetie?

    The US was seriously affected by weather extremes last year, accounting for 69% of overall losses and 92% of insured losses due to natural catastrophes worldwide, according to a Worldwatch Institute report.

    Hurricane Sandy, the summer-long drought in the Midwest and severe storms with tornadoes accounted for $100 billion of those global overall losses, the report says. The insurance industry covered $58 billion of the losses. These losses were the second highest overall and insured losses since 1980 in the US.

    In 2012, there were 905 natural catastrophes worldwide, 93 percent of which were weather-related disasters. Those disasters caused $170 billion in overall losses and $70 billion in insured losses, according to the report.

    Asia endured the most natural catastrophes with 37 percent of the total, followed by the US with 26 percent, Europe with 15 percent, Africa with 11 percent and Australia/Oceania with 6 percent.

    While the breakdown is in line with the long-term average from 1980 to 2011, trends show considerable regional differences, the report says. The largest increases over the last 30 years occurred in North America, including Central America and the Caribbean, followed by Asia, and Australia, while the smallest increases happened in Europe and South America.

    The US insurance industry expects climate change-related storms and weather occurrences to worsen, but studies and anecdotal evidence from insiders show it’s not doing much to combat global warming or prepare for it.

    Earlier this month, Peter Höppe, who heads Geo Risks Research at the reinsurance giant Munich Re, cited studies forecasting a rise in future summer droughts, severe cyclones and increasing risk of storm surge.

    Despite the growing risk, Höppe says the US insurance industry has not been engaged in advocacy related to carbon taxes or proposals addressing carbon.

    A study released in March by sustainability leadership advocate Ceres found just one-eighth of US insurers surveyed have comprehensive climate change strategies.

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