Global warming will increase the frequency and severity of extreme weather events such as droughts, heatwaves, wildfires, storms and floods, costing the world up to one percent of global GDP by mid-century.
 | Storm WarningHurricane Katrina pictured by satellite as she smashed into New Orleans causing tens of billions of dollars worth of damage (Photo: Shutterstock) |
Weather-related catastrophe losses have increased by 2 percent each year since the 1970s, according to analysis of data collected by reinsurers Munich Re, corresponding with most of the warmest years on record. The severity of Hurricane Katrina, or the drought and wildfires in southeast Australia, should not have surprised anyone.
Warmer temperatures mean increasingly severe storms and an escalating spiral of physical and economic damage from hurricanes and typhoons. Research shows that damages scale up as the cube of windspeed. Thus a 5 to 10 percent increase in hurricane windspeed is predicted to approximately double annual damages.
Meanwhile heatwaves like 2003 in Europe, when 35,000 people died and forestry and agricultural losses reached 15 billion dollars, will be “commonplace by the middle of the century”, warns the Stern Review on the Economics of Climate Change, by which time losses from extreme weather could reach one percent of world GDP. That’s equivalent to one quarter of the agricultural output of the entire world.
A study by the Hadley Centre predicts that the proportion of land area experiencing severe droughts at any one time will increase from around 10 percent today to 40 percent for a warming of 3 to 4 degrees Celsius.
A rising tide
Rising seas, storm surges, and flooding are a further hazard for the more than 200 million people who live in coastal floodplains around the world. One trillion dollars worth of assets lies less than one meter above sea level.
Many of the world’s major cities are at risk of flooding from coastal surges, including Tokyo, Shanghai, Hong Kong, Mumbai, Calcutta, Buenos Aires, New York, and London. One-quarter of Bangladesh’s population could be under water with a 1-meter rise in sea levels – a distinct possibility by the end of the century.
In Europe, a one-meter sea level rise would affect over 20 million people and put an estimated 300 billion dollars worth of GDP at risk. The Netherlands is by far the most vulnerable, with around 25 percent of the population potentially flooded by a one-meter sea level rise.
Long coastlines and the high concentration of population and economic activity in coastal areas makes southeast Asia one of the most vulnerable regions to extreme weather events, says Juzhong Zhuang, an economist at the Asian Development Bank.
“In the Philippines the number of recorded floods in the 1960s was less than 20, since the beginning of this century there have been more than 100. And the worst is yet to come, “ he warns. Zhuang calculates that Thailand, Indonesia, the Philippines, and Vietnam could lose 6.7 percent of their combined GDP to climate change by the end of the century.
Extreme weather costs are unevenly spread. The United Nations 2009 Global Assessment Report on Disaster Risk Reduction reports that your risk of dying in a cyclone is 200 times higher if you live in a low-income country than if you live in an OECD country.
While the headline figures show that OECD countries account for almost 70 percent of estimated global annual economic losses to tropical cyclones, this ratio changes when losses are measured as a proportion of GDP. Sub-Saharan African countries then experience almost three and a half times more economic loss than OECD countries, Latin America and the Caribbean as much as six times more.
editor: James Tulloch
publishing date: June 8, 2009
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Climate changes
I think that we do not have an unusual development. There have always been waves with hot and cold times. And insurances are surely happy that people fear from having problems and that...