Natural Disasters

World will face at least 560 climate disasters every year by 2030, warns UN

Insurance against disasters can help adapt and build back better

By Kiran Pandey
Published: Tuesday 26 April 2022
World will face at least 560 disasters every year by 2030, warns UN Photo: iStock

The world will face around 560 disasters every year by 2030, warned the United Nations in a new report. 

The world has experienced 350-500 medium- to large-scale disasters every year over the last 20 years, said the report published March 26, 2022. This is five times higher than the previous three decades, the Global Assessment Report (GAR 2022) released by the United Nations March 26, 2022. 

The rapid rise in the disaster frequency can be attributed to climate change and inadequate risk management, according to the intergovernmental organisation. The UN Office for Disaster Risk Reduction (UNDRR) released the report ahead of the Global Platform for Disaster Risk Reduction in May, 2022.

Disaster events in 1970–2020 and projected increase in 2021–2030

Source: UNDRR analysis based on the International Disaster Database

Poor governance and risk management systems are fundamentally underestimating true global risk and putting all our socio-economic gains in danger, it noted. 

Mami Mizutori, special representative of the Secretary-General for Disaster Risk Reduction and Head of UNDRR, said in a statement:

As the Midterm Review of the Sendai Framework is underway, this report should be a wake-up call that countries need to accelerate action across the Framework’s four priorities to stop the spiral of increasing disasters.

Poverty burden will increase

The frequent disasters will add to the poverty burden of the world, the report said. An additional 37.6 million people are estimated to be living in conditions of extreme poverty due to the impacts of climate change and disasters by 2030, it nored.

A “worst case” scenario of climate change and disasters will push an additional 100.7 million into poverty by 2030, according to UN.

The poorest are most vulnerable and will bear the brunt of the disasters, the analysis noted citing the INFORM Natural Hazard Risk Index. 

A majority of countries that face a high disaster risk are also among those with the highest share of population living under the national poverty line, it said.

These include the Philippines, Bangladesh, Myanmar, India, Indonesia, Pakistan and Vietnam from the Asia-Pacific region. 

Around 90 per cent of the countries which are at a high risk according to the INFORM Natural Hazard Risk Index are middle- and lower-income countries, with an average national poverty rate of 34 per cent. 

In comparison, the countries which are supposedly under “low risk” have a poverty rate of less than one per cent. 

The poor are affected the most because of their high dependency on outdoor work like in agriculture or reliability on natural capital, both of which are vulnerable to a changing climate.

With inadequate financial means to adapt, the poorest are most vulnerable in both the developing and developed nations, the UN report said.

Developing nations most vulnerable, not insured 

Annual direct economic loss from disasters has more than doubled over the past three decades. It increased to over $170 billion in the 2010s from an average of around $70 billion in the 1990s.

Just 40 per cent of all disaster-related losses were insured between 1980 and 2018.

This means, 60 per cent of all disaster-related losses were not insured. Once again, there exists a wide inequality between the developed and developing nations.

Direct economic loss

Insurance is overwhelmingly concentrated in richer countries, with the insurance coverage rate in most developing and emerging economies well below 10 per cent and sometimes almost zero, despite facing greater impact from disasters.

Global warming reaching 1.5 degrees Celsius in the near-term will cause unavoidable increases in multiple climate hazards and present multiple risks to ecosystems and humans, said the Intergovernmental Panel on Climate Change report Climate Change 2022: Impacts, Adaptation and Vulnerability.

Around $170 billion per year has been the average cost of the natural disasters over the last decade, according to UN. Low-income and lower-middle income lose, on average, one per cent of their national GDP to disasters every year, compared to 0.1 per cent and 0.2 per cent in high-income countries and upper middle-income countries respectively. 

Of these, the greatest share of economic loss is borne by countries in the Asia and Pacific region, where the countries lose on average 1.6 per cent of GDP to disasters each year.

Africa is the second-most affected region, losing an average of 0.6 per cent of GDP to disasters, the UN estimated. 

The first four months of 2022 have been devastating for Africa, which faced at least six major climate-led disasters, including the recent floods in South Africa, the body noted.

The damaging floods in KwaZulu-Natal province of South Africa followed three tropical cyclones and two tropical storms that hit South-East Africa in just six weeks of the year.

Building back better

A range of sectors, including the financial, governmental, development, insurance and risk management sectors, can stop this spiral of self-destruction and safeguard the future of the planet amid rising risks, the report suggested.

Insurance is a key tool to adapt for building back from disasters, reminded the report. It is a wake-up call to adapt to “climate emergency” by estimating the disaster losses better, and insuring them.

The recommendations in the report were built on the Glasgow Pact of the 26th Conference of Parties to the United Nations Framework Convention on Climate Change that called for doubling of finance to support developing countries in adapting to the impacts of climate change and building resilience.

Climate action failure’ has been identified as the number one global risk with potentially the most severe impact over the next decade, according to the World Economic Forum.

“The world needs to do more to incorporate disaster risks in how we live, build and invest, which is setting humanity on a spiral of self-destruction,” said Amina J Mohammed, deputy Secretary-General of the United Nations in her statement

Lack of data will be a major obstacle to addressing the risks which are not measured well, the UN report flagged. “The basic data-collection systems of most countries are not yet able to fully track the extent of disaster damage and loss, the organisation noted.

There is also the need for governments and the financial industry to improve accounting of the financial assets at risk under various future climate change scenarios. Financial systems, including insurance, must be reworked to account for the real costs of risk, particularly long-term risks, according to UN.

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