This is what the climate crisis is costing economies around the world

This article was first published in October 2023 and updated in November 2023.

Around the world we’re counting the cost of climate change, in every way, but what does this mean in terms of economic losses, what are the main causes and where is this being felt the most?

Extreme weather, climate and water-related events caused almost $1.5 trillion of economic losses in the decade to 2019, up from $184 billion in the 1970s, according to a World Meteorological Organization (WMO) report. The real figures are likely to be even higher, as many losses go unreported.

While the good news contained in the report showed that improved warnings and disaster management has cut the number of lives lost, there is no getting away from the huge human and environmental cost of the climate crisis, and the impact it is having on livelihoods and businesses.

Failure to mitigate climate change is ranked as one of the key threats in the World Economic Forum’s Global Risks Report 2023, with 70% of respondents rating existing measures to prevent or prepare for climate change as “ineffective” or “highly ineffective”.

“Despite 30 years of global climate advocacy and diplomacy, the international system has struggled to make the required progress on climate change,” the report says. “The potential failure to address this existential global risk first entered the top rankings of the Global Risks Report over a decade ago, in 2011.”

While the environmental losses and hazards are clear, the economic costs are also important since they have an uneven impact on communities, with some countries and regions disproportionately affected.

China suffered direct economic losses of more than $42 billion in the first nine months of 2023 from natural disasters including torrential rains, landslides, hailstorms and typhoons according to the nation’s government data.

Tropical cyclone damage was the largest proportion, according to the WMO data, with floods coming in second, and drought third.

In Africa, disasters from 1970-2021 caused $43 billion in economic losses, with droughts accounting for 95% of deaths, according to the WMO. Europe’s reported cost was $562 billion in losses, with 8% of global disaster deaths occurring in Europe, the data showed.

For South America, the losses amounted to $115.2 billion and for North America, Central America and the Caribbean it was $2 trillion. Meanwhile, the latest instalment of the US National Climate Assessment has concluded that extreme weather events currently cost the country $1 billion every three weeks (compared to every four months in the 1980s) and averaged $150 billion in damages each year between 2018-2022.

Climate-related extreme events are set to become more frequent and severe, according to the Intergovernmental Panel on Climate Change. It is against this backdrop the United Arab Emirates will host the 28th Conference of the Parties to the UN Framework Convention on Climate Change, known as COP28, from 30 November to 12 December.

The United Nations' global chief heat officer, Eleni Myrivili, has called for firm commitments at the summit to stem rapidly rising temperatures in cities.

As we head towards the meeting, you can follow the build-up on the World Economic Forum’s website.

“Our only ask is that you come with solutions, and real actions,” Majid Al Suwaidi, Director-General and Special Representative of the United Nations Climate Change Conference (COP28), Office of the Special Envoy for Climate Change of the UAE, told the Forum in a panel session. “That’s what we want our COP to be about, solutions, actions, real things that will get us back on track.”