A recent study has estimated that climate change-caused extreme weather events have cost about $143 billion in damages each year, or $16 million every hour, between 2000 and 2019.
To find this value, researchers used data from the International Disaster Database of the World Meteorological Organization, which has seen a sevenfold increase in reported extreme weather-caused disaster losses since the 1970s. By using the Extreme Event Attribution methodology in the study, researchers were able to consider the direct impact of human-caused emissions on weather events in making their cost estimations.
The study, published in the Nature Communications journal, focused on the direct damages caused by these events, such as destroyed housing and roads or lost crops. Indirect factors such as business revenue loss or temporary unemployment in the affected area were not included, suggesting that cost estimates with these factors in consideration would be even higher.
Of the 185 weather events analyzed in the study, researchers found that 64% of climate change-caused damages may be attributed to storms, 16% to heatwaves, 10% to floods and droughts, and 2% to wildfires. Perhaps most striking was the finding that 63% of damages incurred from these events were attributed to human loss of life, especially in low-income countries.
Cost Estimates May Inform the UN Loss and Damage Fund
During the COP27 United Nations climate summit in 2022, countries established a Loss and Damage Fund to provide assistance to nations most vulnerable to the effects of climate change.
G20 countries are responsible for the large majority of global emissions, but developing countries have felt most of the damage. Meanwhile, United Nations Environment Programme (UNEP) research shows that financial support for loss and damage to help low and middle-income countries is currently five to ten times below estimated needs and will have to reach $300 billion each year by 2030.
In a Guardian report, Ilan Noy, one of the researchers on the study, said that the process they implemented to estimate damages may be used to inform the UN fund, as well as climate lawsuits and other climate-related economic matters.
Taking the Next Steps to Address Climate Impacts
Frustration has mounted over the comparative profits made by fossil fuel companies amidst projected damages caused by fossil fuel-related emissions. In anticipation of COP28 in November, world leaders at the International Climate and Energy Summit in Spain agreed that fossil fuel subsidies will need to be phased out in order to reach global climate targets. While the present study estimated about $2.86 trillion of total damages from 2000 to 2019, fossil fuel subsidies recently hit an annual value of $7 trillion in 2022.
A number of climate change-related cost estimates have been made in recent years, using varying methods for calculation. While nearly all reveal strikingly high economic costs of the climate crisis, estimations also point to ways in which shifting investment to renewables and sustainability projects and economic support for low and middle-income countries may help reverse this trend.