18 November 2013 (World Bank) – Since the 1980s, there has been an upward trend in disaster losses. During the 1980–2012 period, estimated total reported losses due to disasters amounted to US$3.8 trillion. Weather-related or hydro-meteorological disasters accounted for 74% (US$2.6 tril- lion) of total reported losses, 87% (18,200) of total disasters, and 61% (1.4 million) of total lives lost (see Figure 1 and Munich Re 2013a,b). Recent disasters provide a grim reminder of this human and economic toll. In Thailand, the 2011 floods resulted in losses of approximately US$45 billion, equivalent to 13% of the country’s gross domestic product (GDP) (World Bank 2012a). In the Horn of Africa, the extended 2008–2011 drought, which at its peak left 13.3 million people facing food shortages, caused estimated total losses of US$12.1 billion in Kenya alone (Government of Kenya 2012).
Damage and loss trends are difficult to monitor over time, due in part to inconsistent methodologies, and the fact that only a few countries (about 50) keep national disaster databases. Even among those, a recent United Nations Development Programme (UNDP) study found that as many as 81% of countries did not consistently record economic losses, and only 18% maintained quality control and validation (UNDP 2013). Increasingly, however, major disasters are being assessed based on standard Damage and Loss Assessments (DaLAs) (ECLAC 2003), and (since 2007), the PDNA methodology. Among the 72 hydro-meteorological disasters assessed, economic losses occurred primarily in productive sectors (such as agriculture and commerce), while physical damages were almost equally distributed between infrastructure, and social and productive sectors, reflecting the destruction of physical structures, such as roads, bridges, houses, schools, hospitals and irrigation infrastructure. This pattern is fairly standard across all types of disasters (tropical cyclones, floods, El Niño/La Niña events and droughts). In some case, droughts can result in more economic losses to infrastructure sectors: during the 1998–2000 drought in Kenya, for example, more than 80% of the losses were in the hydropower sector (Government of Kenya 2012).
The private sector, particularly in climate-sensitive areas such as commerce, industry, agriculture, power, shipping and tourism, is often the first to be affected by changes in the climate3. Flooding, wind and other weather events are also often fatal to smaller, unin- sured businesses, particularly in the informal sector (IFC 2010a).
The economic impact of disasters is concentrated in rapidly- growing middle-income economies due to increasingly exposed (and valuable) assets. In these countries, the average impact of disasters equaled 1% of GDP between 2001 and 2006, ten times higher than the average in high-income economies for the same period (World Bank 2012c). However, the impact can be particularly crippling on smaller and poorer countries, such as small island developing states and land-locked developing countries. Hurricane Tomas, for example, devastated Saint Lucia in 2010 and wiped out the equivalent of 43% of its GDP. In terms of human lives lost, low- and low-to-middle income countries suffered 85% of total global disaster fatalities (Munich Re 2013a,b).
Over time, cumulative impacts from small, recurrent disasters can equal or even exceed those from larger catastrophes (Campos et al. 2010). Often escaping national or international awareness, these smaller events reinforce poverty and compound the hardships endured by poor communities. In Colombia, for example, cumula- tive total small-scale losses between 1972 and 2012 were 2.5 times greater than those resulting from large-scale disasters. Recent research concluded that if the impacts associated with smaller disasters were included in global databases, reported impacts would likely be at least 50% higher (UNISDR 2013). These figures refer primarily to damages and, for the most part, exclude the cost of indirect and non-quantifiable losses.
Losses are normally more difficult to quantify than damages, particularly when they involve non-market values, such as human fatalities, or environmental damage, or when they result from indirect impacts. Yet in many countries, disaster losses can be significant and last over long periods of time. For example, the 2011 drought in the Horn of Africa led to an extremely high rate of malnutrition and infectious diseases, especially among children (World Bank 2013a). The 2013 floods in Mozambique led to the temporary displace- ment of about 250,000 people. While methodological refinements in DaLAs have allowed for the quantification of these losses (see ECLAC 2003), most countries have not applied them systematically to allow comparisons over time.
Among the most insidious effects of weather-related disasters are their impact on the poor. Unless measures are taken to reduce these risks, climate change is likely to undermine poverty goals and exacerbate inequality worldwide for decades to come. This is examined in further detail in the next section.