Climate Change

Natural disasters cost $232 bln in 2019

At a loss of $2.98 tln, 2009-2019 was the costliest decade

By Kiran Pandey
Published: Tuesday 28 January 2020

The global economy suffered a loss of $232 billion (Rs 16.5 lakh crore) due to natural disasters in 2019, according to a January 2020 report. The year turned out to be the eighth-costliest in terms of weather-related disasters, adjusting for inflation.

Weather-related disasters, or events caused by ‘atmospheric-driven scenarios’, in fact caused most of the damage at $229 billion — 17 per cent above the 21st century average.

Typhoons, floods and hurricanes proved to be the costliest. The report established that 2017, 2018 and 2019 were the three straight costliest in terms of weather-related disasters.

The total count of natural disasters increased to 409 in 2019 from 394 a year ago.

Typhoons in Japan and monsoon floods in China hit the hardest, causing losses of $30 billion and $15 billion respectively. Typhoon Hagibis and Typhoon Faxai were the costliest.

Floods caused five of the top 10 costliest disasters: Spring and summer flooding in the United Statesl; separate seasonal monsoon floods in China and India; and a major flood in Iran. Together, they accounted for more than $53 billion in direct economic impacts.

In India

June-October monsoon floods caused a loss of $10 billion to be the seventh- costliest. They also led to the death of 1,750 people — the most among all natural disasters last year.

Cyclone Fani, which affected Odisha in India and Bangladesh, was the tenth-most costly natural disaster in the world, according to the report. 

Tropical cyclones have been the costliest natural catastrophe in the world in the last two decades. In 2018, 2017, 2012, 2005 and 2004 cyclones accounted for nearly $909 billion of a total $1.43 trillion lost due to disasters.

The year ended the costliest decade until now in terms of such disasters, with a loss of $2.98 trillion. The report pegged this at $1.1 trillion higher than in 2000-2009.

The Asia-Pacific region — affected by earthquakes, tsunamis, floods, and cyclones — accounted for $1.3 trillion. That’s 44 per cent of the total loss.

More in store

Recent projections have forecast that the decade just started will be even costlier. This calls  for responsible action to mitigate climate change.

India will be among the worst-hit by floods and heat waves due to changing climatic conditions. This will eat into the country’s gross domestic product too, the Intergovernmental Panel on Climate Change (IPCC) warned.

The World Economic Forum and the United Nations have also projected the biggest environmental and economic risk for the world ahead, including for India. They have advocated building resilience and planning properly to mitigate disasters.

The report brought to the fore a significant protection gap that persisted in the world. The protection gap referred to the portion of economic damage not covered by insurance.

Insured losses from natural disasters halved in two years to $71 billion in 2019, according to the report. Many of the costliest events were in relatively under-insured regions such as China, India and Iran.

Development of new insurance schemes, such as parametric insurance, insurance risk pools and catastrophe bonds may improve risk mitigation in the most vulnerable areas, the report suggested.

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