Floods and droughts could cost the global economy $5.6 trillion by 2050, report says
It’s been a devastating year for the global economy when it comes to natural disasters.
Floods in Pakistan have displaced millions from their homes and killed over 1,000 people. A deadly heatwave in China is wreaking havoc on the country’s economy and supply chains. And the ongoing mega-drought on the US west coast is now the worst in 1,200 years, while another in Europe is affecting everything from coal and nuclear power plants to manufacturers’ supply chains.
Now, a new study shows that the increasing frequency of water-related natural disasters is a trend that will only continue as climate change rages on in the coming decades. The cost to governments, businesses and consumers will be high.
Water-related natural disasters, from floods to droughts, could cost global gross domestic product (GDP) $5.6 trillion in damage between 2022 and 2050, according to a new study by services company GHD. That’s quite an increase from the norm in the last 50 years.
Between 1970 and 2021, all natural disasters, not just those related to water, caused $3.64 trillion in damage worldwide, according to World Meteorological Organization (WMO) data. GHD climatologists predict that the US alone could lose more than $3.7 trillion over the next 30 years from water-related natural disasters alone.
The study follows an April analysis by the Office of Management and Budget showing that the US federal budget could lose $2 trillion annually through 2100 due to the effects of climate change.
Climatologists’ pessimistic outlook is also due to one of the worst years in history in terms of natural disasters.
In 2021 alone, natural disasters caused $252 billion in global economic damage, a 47% increase from 2020 and 66% above the average for the past two decades, according to the Emergency Events Database, maintained by the Center for Research on the Epidemiology is managed by disasters.
A total of 432 catastrophic natural events were recorded last year, which is “well above average,” researchers at the Emergency Events Database said in March. For example, in 2021 there were 223 floods classified as natural disasters, compared to an average of just 163 per year in 2001 and 2020.
The increase in the number, duration and impact of natural disasters is also not a new trend. In the past 50 years, climate and weather-related disasters have increased by 400%, the WMO said in September.
“Weather, climate and water extremes are increasing in number and will become more frequent and severe in many parts of the world as a result of climate change,” WMO Secretary-General Petteri Taalas said in a 2021 report. “That means more heat waves, droughts and wildfires , as we have recently observed in Europe and North America.”
According to the United Nations, economic losses from these weather-related disasters also increased sevenfold from the 1970s to 2019. In 1970, the daily global economic impact of weather-related disasters was approximately $49 million. By 2019, that number reached $383 million.
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