Climate Action

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

Failure to mitigate climate change is ranked as one of the key threats in the World Economic Forum’s Global Risks Report 2023.

Failure to mitigate climate change is ranked as one of the key threats in the World Economic Forum’s Global Risks Report 2023. Image: Unsplash/Jonathan Ford

Emma Charlton
Senior Writer, Forum Agenda
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Climate Action?
The Big Picture
Explore and monitor how Climate Crisis is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

COP28

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

  • The economic toll of extreme weather has grown substantially, according to a World Meteorological Organization report.
  • Extreme weather events and climate-related disasters have caused significant economic losses, reaching nearly $1.5 trillion in the decade to 2019.
  • The international system has struggled to make the required progress on climate change, according to the World Economic Forum’s Global Risks Report 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.

climate change economic weather water extremes.
The climate crisis is significantly impacting livelihoods and businesses. Image: Statista

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.

Graphs illustrating the number of reported deaths and economic losses by decade.
The cost of the climate crisis continues to rise. Image: WMO

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.”

Discover

How is the World Economic Forum fighting the climate crisis?

The economic costs of the climate crisis

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.

Pie charts illustrating the reported disasters, deaths and economic losses in the US.
What’s causing the losses? Image: WMO

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.

More frequent and severe

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.”

Have you read?
Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Climate ActionEconomic GrowthNature and Biodiversity
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Compound benefits: Why a shared vision is key to a more sustainable chemicals industry

Jade Rodysill and Charlie Tan

October 7, 2024

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum