HARD LIMITS: Natural Disasters Expected to Cost $500 Billion in 2030 in Developing Countries Alone

July 18, 2022

See this report and I repeat here unedited the first part of the introduction (emphasis added):

With $252 billion of reported economic damage caused by natural disasters, 2021 became the fourth most damaging year recorded over the last two decades (CRED, 2021). Hurricane Ida alone caused $65 billion in damages and ranks as the 6th most damaging natural disaster of the last 20 years.

The 432 natural disasters recorded by the Emergency Event Database (EM-DAT) for 2021, which accounted, apart from the economic damage, for 10,492 deaths and affected 101.8 million people, are just the tip of the iceberg, as far as the damage balance is concerned.

In most developing countries, there are large gaps in the recording of damage, so the real economic losses are likely to be significantly higher, estimated at $280 billion annually, and expected to rise to $500 billion in 2030 in developing countries alone (Schaefer, L. et al, 2022).

In addition, there are non-monetizable losses and indirect consequential economic costs.

Overall, experts believe that the protection gap is still as high as 95% of losses and damages (Schaefer, L. 2022).

The recently published IPCC Sixth Assessment Report Climate Change 2022: Impacts, Adaptation and Vulnerability (IPCC, 2022a) warns urgently that the risks of climate change continue to increase, but that despite growing knowledge of impact chains, we are making little progress in climate adaptation and risk management.

If the widening protection gap is not narrowed down soon, we will soon run up against the hard limits of human and ecosystem adaptation in many areas.

This discussion paper highlights opportunities in 2022 in the various policy forums of international climate, development, and humanitarian policy, to narrow the protection gap through Climate and Disaster Risk Finance and Insurance (CDRFI).

The paper offers an overall view of the discourse landscape and is aimed primarily at those political and civil society actors who have so far been familiar with only parts of the debate (e.g. the negotiations on loss and damage in the United Nations Framework Convention on Climate Change (UNFCCC) process) and are interested in identifying possible synergies with other parts.

The research presented was commissioned by the Munich Climate Insurance Initiative (MCII) and is supported by Engagement Global with funding from the German Federal Ministry for Economic Cooperation and Development (BMZ). MCII is solely responsible for the content of this publication.

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