Paolo Soro

Climate and economy, alarm by IMF

Climate Change Will Bring More Frequent Natural Disasters & Weigh on Economic Growth

The weather seems to be getting wilder and fiercer. From devastating hurricanes in the U.S. and the Caribbean, to raging wildfires in California and ruinous floods in India, the human and economic toll of extreme weather events is enormous.

Each time an extreme weather event causes significant loss of property and loss of life, a natural disaster is recorded. Natural disasters are a particularly important risk to small, lower income countries because they can quickly wipe out a significant portion of their GDP. For decades, the IMF has been committed to helping meet member’s post-disaster needs. Will these needs increase with climate change? In other words, will climate change bring more frequent weather-related natural disasters? Based on our analysis in Chapter 3 of the October 2017 World Economic Outlook, the answer is yes.

Between 1990 and 2014, there were more than 8,000 weather related disasters, with floods, hurricanes and epidemics being among the most common. In a sample of 228 countries and territories, we looked at the historical relationship between the occurrence of each type of weather-related natural disaster – for example, caused by hurricane, flood, or wildfire – and monthly weather patterns over the past 25 years.

We find that temperature and precipitation are very important predictors of most disasters. As expected, higher temperature is associated with more disasters caused by droughts, wildfires, heat waves, tropical cyclones and other storms. More rain is associated with fewer disasters caused by droughts, wildfires and heat waves, but also with more disasters caused by floods, landslides, tropical cyclones and other storms.

So, how will global warming affect the probability of natural disasters in the future? We combine our empirical estimates from historical data with the projected temperature and precipitation for each country under the unmitigated climate change scenario of the Intergovernmental Panel on Climate Change. This allows us to predict the probability of each type of weather-related disaster in 2050 and 2100. Under the unmitigated scenario, mean global temperatures are expected to increase by about 4°C by 2100.

Our findings suggest that most types of weather-related disasters will become more common by the end of the century, across all income groups. The frequency of disasters caused by heat waves, tropical cyclones and wildfires will increase considerably. While scientists expect that the overall frequency of tropical cyclones will decline in a warmer world, they also expect the storms that form to be more intense; which will likely result in more disasters.

Similarly, floods and epidemics, which primarily affect low-income countries, will also become more common. Mosquitoes and pathogens reproduce and spread faster in a warmer environment, increasing the probability of epidemics .

As natural disasters become more frequent and intense, the world needs to prepare for this change. Moreover, our analysis suggests that this increasing risk from natural disasters will manifest itself on top of the longer term negative effects that temperature increases have on macroeconomic activity. This may trigger increased migration flows from affected countries with potentially sizable spillovers across the globe.

Countries should invest in resilient infrastructure that can withstand rising sea levels and higher wind speeds, among other increased hazards. Updating zoning laws and building codes to account for climate change, along with better early warning systems will also be important to reduce future costs. But most importantly, when times are good, countries should save so that they can have room for additional government spending to support their economies when climate-related disasters hit.

Climate change threatens all countries – advanced and developing alike. Only a concerted global effort to curb greenhouse gas emissions will help us avert its worst effects. The UN’s Climate Change Conference (COP23) taking place in Bonn this week will be critical to make meaningful progress towards this goal.

Source: IMF News

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