Floods and Other Water-Related Disasters Could Cause $5.6 Trillion in Economic Losses by 2050 – Report

A residential cul-de-sac is flooded after heavy rains in Chehalis, Washington, USA, January 7, 2022. Photo taken by drone.Reuters/Nathan Howard

LONDON (Reuters) – Worsening droughts, storms and torrential rains in the world’s largest economy could reduce GDP by $5.6 trillion by 2050, a report said on Thursday. rice field.

Heavy rains have caused flooding this year, inundating cities in China and South Korea, cutting water and power supplies in India, and droughts are jeopardizing farmers’ harvests across Europe.read more

Such disasters cost the global economy hundreds of billions of dollars. Last year’s extreme droughts, floods and storms cost him more than $224 billion globally, according to an emergency database maintained by the Brussels-based Center for Research on Epidemiology of Disasters.

But those costs are set to skyrocket as climate change fosters more intense rainfall, floods and droughts in the coming decades, warns a report from engineering and environmental consultancy GHD.

Too much or too little water “is the most destructive force a community can experience,” says Don Holland, who heads GHD’s Canada Water Markets Program.

GHD assessed water risks representing a variety of economic and climatic conditions in seven countries: USA, China, Canada, UK, Philippines, United Arab Emirates and Australia. The team used global insurance data and scientific research on the impact of extreme events on various sectors to estimate the direct costs faced by each country and the amount of losses across the economy.

In the United States, the world’s largest economy, losses could total $3.7 trillion by 2050, with US gross domestic product shrinking by about 0.5% each year until then. China, the world’s second largest economy, faces cumulative losses of about $1.1 billion by mid-century.

Of the five most important business sectors to the global economy, manufacturing and distribution will be hit hardest by disasters costing $4.2 trillion as water shortages disrupt production and storms and floods destroy infrastructure and inventories. will receiveread more

Vulnerable to both drought and extreme rainfall, the agricultural sector could suffer losses of $332 billion by 2050. Other sectors facing major challenges are retail, banking and energy.

At this year’s World Economic Forum in Davos, Switzerland, a global group of experts launched a new commission to examine the economics of water. This committee aims to advise policy makers on water management.read more

“We have to change the way we manage water and climate together,” said Tharman Shanmugaratnam, co-chair of the commission. “The cost of doing so is not trivial, but it is far less than the cost of allowing extreme weather to wreak havoc.”

Reporting by Gloria Dickey.Editing by Katie Daigle and Susan Fenton

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