Climate Change

In 2018, natural disasters cost the world $225 billion

Extreme weather-related disasters caused 89 per cent of the economic loss in Asia Pacific region

 
By Kiran Pandey
Last Updated: Thursday 24 January 2019
Representational Image. Credit: Getty Images

Natural disasters caused economic losses up to $225 billion across the world in 2018. Even though this is less than the losses incurred in 2017, it is the third consecutive year when losses due to natural catastrophes crossed the $200 billion threshold and the 10th time this happened since 2000, says the Weather, Climate & Catastrophe Insight: 2018 Annual Report.

The report estimates that 95 per cent of the total loss, amounting to $215 billion, was due to weather-related disasters.

Asia Pacific bears the brunt of weather-related disasters

Asia Pacific suffered economic losses of over $89 billion in 2018 due to natural disasters, this was slightly higher than the 21st century average ($87 billion) and over 50 per cent higher than the median loss since 2000-2017 ($57.5 billion) reveals the report.

What is worrying is that nearly 89 per cent of this damage has been due to weather-related disasters only — this was also about 46.7 percent higher than the 21st century average of $54 billion and almost 60 per cent higher than the median loss of $59.8 billion

Most expensive: Cyclone and floods

The main drivers of economic loss in 2018 were tropical cyclones, flooding and drought. Losses due to tropical cyclones far exceeded the long-term average. Losses due to droughts and winter weather were also higher than the 2000-2017 average. 

Cyclone Jebi in Japan was the costliest disaster in the Asia Pacific region, followed by the floods. Floods in Japan and India alone cost around $15.1 billion, out of which Japan lost $10 billion and India lost $5.1 billion.

The July 2018 floods in Japan was the worst in the last 36 years, while the August 2018 floods in Kerala, India, were the worst in a century.

India: Double whammy of drought and floods

Even as Kerala saw the worst floods of the century, much of India saw a reduction in the seasonal rainfall, which accelerated drought losses. In India, the monsoon drives summer agricultural production, and this was patchy in 2018, says the report.

The annual statement by the India Meteorological Department (IMD) also said that 2018 had the sixth-lowest monsoon in the last 117 years. Extreme weather continues to remain the top most global risk for the third consecutive year, according to Global Climate Risk Index 2019.

Detailing the economic cost of other natural disasters — droughts, wildfire, earthquakes and European windstorm — it says that natural disasters remain a key risk for agriculture in Asia Pacific. However, the report says that the insurance industry can help — if governments are prepared to increase their budgets and invest more in comprehensive insurance schemes.

In this context, it’s important to note that the Indian government’s flagship insurance scheme for its farmers — Pradhan Mantri Fasal Bima Yojana (PMFBY) — seems to be ineffective due to fundamental flaws in its design.

In fact farmers’ claims worth Rs 2,829 crore remain unpaid for the two seasons that the PMFBY was implemented, revealed a media report.

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