Hurricanes, earthquakes, and wildfires ravaged the world in 2017, as they do each year. But the economic loss from this year’s global disasters cost us more than usual. Insurance firm Swiss Re, which makes this calculation every six months, estimates the economic loss in 2017 to be $306 billion, which is almost double 2016’s loss of $188 billion (and also much higher than the 10-year-average of $190 billion).
If you look at the trend of economic losses since 1970, the world should prepare for greater losses in the future:
This year saw the US hit with more powerful hurricanes than in the past 12 years. Hurricanes Harvey, Irma, and Maria are estimated to have contributed $93 billion to the annual economic losses from global disasters. Wildfires in California, which continue to rage, will add another $7 billion. And thunderstorms in central and southern states in the US will contribute $2.5 billion. Economic loss looks at what the economic productivity would have been had there not been a disaster.
To be sure, just looking at economic losses from natural disasters can skew our perspective of what the world suffered. That’s because richer countries, by definition, would book higher economic losses than poorer countries. For instance, the figures don’t have much to show for it, but south and southeast Asia suffered catastrophic floods in 2017 leading to more than 1,200 deaths and displacement of tens of thousands.
Another caveat is that, though most of the losses are the result of “natural” disasters, they include the effects of human-induced climate change. For instance, we know that as, global average temperatures rise, hurricanes, floods, and wildfires are going to become more intense. But how much more that intensity will contribute to economic losses is difficult to say.
In the end, there’s no point waiting for that estimate. The last 40 years of economic losses clearly show the world heading towards more disastrous times. The best insurance against it is to mitigate climate change.