Half of the world’s economic output will be concentrated in countries at “extreme risk” from natural hazards by 2025, according to a new study. It suggests that economic growth will not necessarily make countries better able to adapt to extreme weather events, as climate change increases the risks countries face.
Scientists believe climate change will cause an increase in weather extremes – including heatwaves, heavy rainfall and possibly droughts – around the world.
But the UK is far less vulnerable to natural hazards than many other countries, which are more exposed to weather-related risks. And rapid economic growth in poorer and less resilient countries is making the world economy far more vulnerable as a whole, according to the analysis from consultancy Maplecroft.
When is a disaster not a disaster?
In its annual ‘risk atlas’, Maplecroft assesses 197 countries according to their physical and economic exposure to 12 different types of natural hazards – including flooding, storm surges, tsunamis, cyclones, earthquakes and wildfires.
Social and economic disasters are not unavoidable consequences of experiencing extreme weather events, the study finds. Rather, the outcome is a function of the event combined with human decisions and institutional capacity to tackle corruption and alleviate poverty.
Rich countries are, unsurprisingly, more resilient. In the last ten years, 80 per cent of fatalities resulting from natural events occurred in poorer countries. But richer countries have far more expensive assets. Over the same time period, they accounted for 92 per cent of economic losses from natural events.
To put this in some kind of perspective – last November, Typhoon Haiyan in the Philippines resulted in the deaths of 6,200 people and caused US$10 billion in economic losses. In contrast, flooding in central and eastern Europe in June 2013 cost US$15.2 billion – but only 25 lives were lost.
Vulnerable countries are getting richer
The world’s economy is powered by countries facing greater risks from natural events, according to the research. By 2025, just under half of the world’s economic output will be in countries at ‘extreme risk’ of natural hazards.
Unsurprisingly, many of these assets as situated in richer countries, like the USA and Japan. The red sections in the map below illustrates where the most expensive economic assets at the greatest risk of experiencing natural hazards, are situated:
But rapid economic growth is also taking place in poorer countries and less resilient countries. By 2025, nearly a third of global economic output will come from countries that are both highly susceptible to natural hazards and unable to respond effectively to them, the study predicts
Getting richer doesn’t necessarily mean getting safer
Some argue that it’s better to adapt to the effects of climate change than try and prevent them, because in the future, richer countries will be better able to build the infrastructure to effectively respond to extreme weather events.
The report finds that in some countries, economic growth does seem to make countries more resilient. In South Korea, a 60 per cent increase in Gross Domestic Product per head since 2004 has translated into a significant increase in its ability to protect its population and economy from natural hazards, for example.
In other cases, it doesn’t work like that. A 115 per cent increase in the combined economic output of India, Indonesia and Bangladesh hasn’t resulted in any change at all to their resilience, the study suggests.
Resilience appears to be the result of a number of factors. In order to become more resilient, countries need to undertake a variety of different tasks – including constructing better infrastructure, developing new building standards and tackling poverty. This is a complex nest of tasks, which different countries prioritise differently and tackle at different rates.
The study also highlights the role that urbanisation and industrialisation play in increasing the risks populations face. Large urban areas lead to concentrated areas of poverty, increasing the population’s vulnerability to natural hazards, it says.
Disasters elsewhere will affect us over here
The study doesn’t factor climate change into its analysis of which countries are more vulnerable than others. But it recognises that climate change is likely to make pre-existing risks worse, by increasing the likelihood of extreme weather events – and gives an insight into which countries are most likely to be affected.
Events outside the UK may have a significant effect on this country’s economy. The research – which is written for businesses operating on an international scale – warns that “the occurrence of a natural hazard event can reverberate through the global economy.”
Natural disasters reduced world trade by one to four per cent between 1963 and 2003, according to one study cited. As climate change progresses, extreme weather events in other countries may end up costing us as well.
UPDATE 21st February: We initially inaccurately stated that 62,000 people were killed by Typhoon Haiyan. This was altered to the correct figure, 6,200.