International Programme for Action on Climate

2. What are the trends in climate-related hazards and disasters?

The world experienced unprecedented climate change impacts in 2023. Accelerated climate change poses significant threats to ecosystems and communities worldwide, exacerbating climate‑related hazards and disasters. As climate-related weather events become more extreme, losses are increasing. In 2022, losses due to natural disasters were estimated at USD 270 billion and insured losses were roughly estimated at USD 120 billion, one of the highest economic losses ever recorded (Munich RE, 2023[18]).1 In the same year, 30 704 lives lost were recorded as a result of natural disasters, impacting an estimated 185 million people globally (CRED, 2023[19]). 2

This chapter draws on a new set of indicators developed by IPAC on key climate-related hazards using earth observation data. The indicators focus on seven key hazards and four exposure domains, and provide a time series going back as far as 43 years for all countries globally (Figure 18). By surveying past climate-related hazards, this chapter explores the impacts and risks of climate change using historical observational data. It shows how climate-related hazard exposures can vary across and within countries due to diverse geography, environment, and weather patterns that affect each area in both OECD and OECD partner countries.

 
Figure 18. Key climate-related hazards and exposure domains

Source: (Maes et al., 2022[20]).

Climate-related hazards can manifest as slow onset events, such as gradual sea level rise, or sudden extreme events, such as flash floods or intense storms (IPCC, 2022[21]). These hazards and their impacts vary widely across the world depending on different ecosystems and climates, as well as socio‑economic conditions. Rising global temperatures can intensify hazards such as hurricanes, heatwaves, droughts, and extreme precipitation, resulting in devastating impacts for vulnerable communities.

Meanwhile, climate tipping points risk further accelerating the pace of climate change, exacerbating the intensity and occurrence of extreme weather events as they disrupt stable climate patterns and amplify climatic disturbances (Box 3). The resulting impacts affect all aspects of socioeconomic and ecological systems, from disrupting agricultural productivity to increased health challenges associated with heat-related diseases or respiratory problems from wildfires.

Increased climate variability and climate extreme events lead to significant economic and human losses. If the world continues on the current emissions trajectory and does not meet the Paris Agreement temperature goal, estimates suggest that global GDP could fall by 10% by 2050 (Swiss Re, 2021[22]). If no action is taken, and temperatures continue to rise to 3.2°C by 2050, global GDP could fall even further by an estimated 18% (Swiss Re, 2021[22]).

Evidence in many OECD countries confirms that accelerated action on adaptation is needed to contain future loss and damage. Investments in climate adaptation measures are usually significantly less expensive than addressing loss and damage from extreme weather events. For example, one study shows that investing USD 1.8 trillion globally in five areas from 2020 to 2030 could generate USD 7.1 trillion in total net benefits (Global Commission on Adaptation, 2019[23]). However, government funding is usually only made available after a disaster. This gives rise to important considerations for adaptation finance (OECD, 2023[24]).

As the impacts of climate variability and extreme climate events are distributed unevenly, they contribute to socioeconomic inequality. Vulnerable populations such as the elderly and children are disproportionately affected by heatwaves (WMO, 2015[25]). Livelihoods in local communities may be disproportionately reliant on certain economic activities such as agriculture or fisheries, which are more heavily impacted by climate‑related hazards and disasters. Moreover, lower-income groups will have a limited capacity to deal with climate impacts, leaving them more vulnerable to sudden onset disasters such as hurricanes or flash floods. The vulnerability of populations to climate change varies significantly and is influenced by a complex interaction of factors such as the ethnic, demographic, environmental and socioeconomic background of individuals and communities (Thomas et al., 2019[26]). In all cases, however, the expectation is that it will lead to a disproportionate and increasing impact on vulnerable populations, as well as an increase in global and local inequality.

 
Box 3. Climate tipping points

Climate tipping points are reached when a change in part of the climate system goes beyond a certain threshold that results in an abrupt and potentially irreversible impact. Several possible climate tipping points have been identified with potentially significant global or regional impacts, such as the disintegration of the Greenland Ice sheet, the melting of the Arctic Permafrost or the weakening of ocean circulations (Armstrong McKay et al., 2022[27]). Crossing climate tipping points may lead to catastrophic impacts for socioeconomic and ecological systems over timeframes short enough to defy the ability and capacity of these systems to adapt (OECD, 2022[28]) (Kemp et al., 2022[29]) (Lenton et al., 2019[30]).

The occurrence of specific climate tipping points varies across types and will depend on the impact of global warming (Figure 19). For example, one study predicts that, under the current emissions scenario, the Atlantic meridional overturning circulation (AMOC) will collapse in mid-century (Ditlevsen and Ditlevsen, 2023[31]). The probability of such tipping points being triggered increases significantly if average temperatures reach between 1.5-2°C (Armstrong McKay et al., 2022[27]). Considering that climate tipping points interact with each other, and can influence the likelihood of triggering another tipping point, limiting global warming to 1.5°C is crucial to avoid the potential additional accelerated catastrophic impacts of combined climate tipping points (OECD, 2022[28]).

 
Figure 19. Global warming threshold estimates for global core and regional impact climate tipping points

Note: Shadowed in green is the 1.5°C-2°C Paris Agreement range of warming. The shadowed area in grey shows the estimated 21st century warming under current policies (horizontal line shows central estimates). Bars show the minimum (base, yellow), central (line, red), and maximum (top, dark red) threshold estimates for each tipping element (bold font, global; regular font, regional).

Source: (Armstrong McKay et al., 2022[27]).

 Societies’ exposure to climate-related hazards

The OECD has developed a set of indicators to monitor climate-related hazards and their exposure. Through this indicator set, policy makers can better understand potential impacts and develop approaches to mitigate and adapt to climate change (Maes et al., 2022[20]). The indicators follow national and international guidelines and are based on the IPCC’s conceptualisation of climate risk, which considers climate-related hazard, exposure and vulnerability as the key dimensions of disaster risk (IPCC, 2022[21]). The indicators have recently been updated and some key results are discussed below.

 Extreme temperature

July and August of 2023 registered the highest average global temperature since records began.3 Over the past decades, population exposure to extreme temperatures has increased significantly. National-level analysis shows an increase in energy consumption for cooling, as well as, crucially, a tendency for extreme heat clusters to last longer than they have over the past two decades (Scoccimarro et al., 2023[32]). During the summer of 2023, several regions in the northern hemisphere experienced record daily temperatures, for example in Phoenix (USA, 48.3°C), Death Valley (USA, 54.4°C), Rome (Italy, 42.9°C) and Sanbao (China, 52.2°C). This is not an isolated event: OECD data confirms that this is a consequence of an observed trend. Since 1979 the population in both OECD and OECD partner countries has been increasingly exposed to hot days,4 with an estimated 11.3% more people exposed to hot days in the period 2018-22 compared to the reference period 1981‑2010 (Figure 20).

 
Figure 20. Population exposure to hot days increasing across OECD and OECD partner countries
Percentage of population exposed to more than 2 weeks of hot days, OECD and OECD partner countries, 1979‑2022

Note: Over- or under-estimations of the estimated exposure to extreme temperature are possible due to the spatial resolution of gridded data, particularly for smaller countries or regions. A variety of indicators has been developed that estimate exposure to extreme temperatures; these should be consulted for more detailed analysis of individual countries.

Source: IEA/OECD (2022), " Climate-related hazards: Extreme temperature", Environment Statistics (database), https://oe.cd/dx/58r.

Countries whose population was most exposed to hot days in 2018-22 include Saudi Arabia (98.3%), India (97.3%) and Israel (91%), an estimated 1.4 billion people in total (Figure 21). Although exposure to extreme temperatures in countries such as Saudi Arabia and Israel was already historically high, the duration of exposure is increasing.

 
Figure 21. Population exposure to more than two weeks of hot days varies between OECD and OECD partner countries
Percentage of population exposed to more than 2 weeks of hot days, OECD and OECD partner countries, 2018-22 average

Note: Over- or under-estimations of the estimated exposure to extreme temperature are possible due to the spatial resolution of gridded data, particularly for smaller countries or regions. A variety of indicators have been developed that estimate exposure to extreme temperatures; these should be consulted for more detailed analysis of individual countries.

Source: IEA/OECD (2022), " Climate-related hazards: Extreme temperature", Environment Statistics (database), https://oe.cd/dx/58r.

Southern Europe is increasingly affected by extreme heat. In 2023 the region experienced an unprecedented heatwave that generated enormous impacts and has yet to be fully assessed. Indicators show that, between 2018 and 2022, approximately 74.7%, 55% and 68.7% of the population in countries such as Greece, Italy and Spain respectively were exposed to hot days. Furthermore, certain regions within these countries are also experiencing an increase in additional hot days per year compared to the reference period 1981-2010 (Figure 22), highlighting regional differences with regards to extreme heat. This indicates that hot European summers are likely to get worse, highlighting again the urgency of taking appropriate measures to tackle extreme heat, particularly for countries that are traditionally less prepared for extreme heat.

 
Figure 22. Increasing extreme temperatures across southern Europe
Annual number of additional hot days (2018-22 average) compared to the reference period 1981-2010 across the European region

Note: A variety of indicators have been developed that assess extreme temperatures; these should be consulted for more detailed analysis of individual countries.

Source: (Maes et al., 2022[20]).

Tropical nights, associated with high night-time temperatures, are also a relevant indicator of increasing temperature, and generate risks to human health due to sleep disturbances and inability to cool down at night (Seltenrich, 2023[33]). Twenty countries — out of 51 countries covered — had more than an additional 10% of their population exposed to tropical nights5 over the period 2018-22 compared to 1981‑2010, while countries such as Korea (28%), Italy (18%) and Greece (16%) had the highest increase in population exposed to more than eight weeks of tropical nights.6

Consistent with evidence of increasing average temperature, exposure to extreme cold is decreasing. The share of population exposed to icing days is decreasing year by year, with an estimated 5.8% fewer people exposed to icing days in the period 2018-22 compared to the reference period of 1981-2010 (Figure 23).

 
Figure 23. Decreasing population exposure to icing days across OECD and OECD partner countries
Percentage of population exposed to more than 2 weeks of icing days, OECD and OECD partner countries, 1979‑2022

Note: Over- or under-estimations of the estimated exposure to extreme temperature are possible due to the spatial resolution of gridded data, particularly for smaller countries or regions. A variety of indicators have been developed that estimate exposure to extreme temperatures; these should be consulted for more detailed analysis of individual countries.

Source: IEA/OECD (2022), " Climate-related hazards: Extreme temperature", Environment Statistics (database), https://oe.cd/dx/58r.

 Droughts and wildfires

Rising temperatures also have adverse effects on food systems, with croplands increasingly susceptible to agricultural droughts. Across the OECD and OECD partner countries there is a significant decrease in soil moisture on croplands (2.4%) over the period 2018-22 compared to the reference period 1981-2010. Some of the countries most affected by agricultural droughts include Argentina, Brazil and Romania, which all experienced average declines of more than 6% in cropland soil moisture in the past five years (Figure 24).

 
Figure 24. Agricultural drought is worsening for a majority of OECD and OECD partner countries
Cropland soil moisture anomaly (%), 2018-22 average compared to the reference period 1981-2010

Note: No results are available for Iceland since no cropland cover is detected using Copernicus global land cover data. Caution is advised interpreting results for Saudi Arabia because cropland cover is low.

Source: IEA/OECD (2022), " Climate-related hazards: Drought", Environment Statistics (database), https://oe.cd/dx/58t.

National averages hide large differences and changes at the subnational level, where recorded drops in soil moisture are greater (Figure 25). In South America, for example, the Argentinian provinces of Córdoba, Chaco and Tucumán, which have high cropland cover, have experienced severe soil moisture declines of 19%, 18% and 17% respectively. Similarly, the Chilean regions of Valparaíso, Santiago Metropolitan Area and O’Higgins are experiencing soil moisture declines of 8%, 7% and 5% respectively. These dramatic changes have already significantly impacted local communities and agricultural production. For example, Argentina, one of the world’s top grain exporters, is in the grip of its worst drought in over 60 years, facing losses of USD 14 billion and more than 50 million tonnes less grain output across soy, corn and wheat (Sigal and Raszewski, 2023[34]). Drought can also exacerbate other climate-related hazards such as conditions that increase the possibility of wildfires due to dry vegetation and fuel load and changing weather patterns.

 
Figure 25. Intensifying drought impacts across Central and South America
Land soil moisture anomaly (%), 2018-22 average compared to the reference period 1981-2010 across the Caribbean, Central and South America

Note: Negative values indicate increasing drought conditions in the top soil layer, while positive values indicate wetter conditions in the top soil layer compared to the reference period 1981-2010.

Source: (Maes et al., 2022[20]).

Wildfires raged across the world in 2023. In the southern hemisphere, wildfires in Chile generated a national emergency. In the northern hemisphere, more than 150 000 km2 of land in Canada burned by the end of August, with New York City shrouded in a cloud of smoke and recording some of the highest air pollution levels in the world in July. Meanwhile, wildfires in southern Europe led to civilian casualties and threatened tourism destinations, highlighting that the impact of extreme wildfires goes beyond lives lost and includes widespread health impacts and innumerable economic disruptions (OECD, 2023[35]). This is consistent with the increasing wildfire exposure registered by OECD data.

Burning of land is due to a variety of causes including wildfires or controlled and uncontrolled biomass burning. Globally, between 2018 and 2022, 20% of burned land was located in just seven OECD and partner countries. Whether this is due to wildfires or intentional biomass burning, burning can impact global mitigation efforts to combat climate change. On average, more than 1% of land area was burned per year between 2018 and 2022 in Argentina, Australia, Brazil, Colombia, India and South Africa, representing approximately 620 000 km2, which is roughly equivalent to the size of France.

Wildfires are becoming more widespread, increasing ecosystem damage, notably biodiversity and carbon sinks, as well as harming human life. Between 2018 and 2022, an estimated 3.2% of the population across OECD and OECD partner countries lived in areas with very high or extreme wildfire danger, representing more than 160 million people. Countries with the highest population exposure to very high and extreme wildfire danger are South Africa (41.2%), Australia (19%), Costa Rica (12.4%), Brazil (9%) and Chile (8.7%), exposing a combined population of more than 51 million people. In absolute terms, India's population experiences the highest overall exposure to wildfires: between 2018 and 2022 more than 38 million people lived in areas with very high and extreme wildfire danger.

Across the OECD and partner countries there is an overall increase in forest exposure to very high or extreme wildfire danger (Figure 26). For example, Brazil experienced the largest area of forest exposed (~1.9 million km2) to wildfire danger over the past five years. Other countries, such as the United States, Australia and Mexico, also have considerable amounts of forest exposed, with 516 000 km2, 622 000 km2 and 614 000 km2 of forest areas exposed to very high or extreme fire risk respectively. Across OECD countries, Israel, Mexico and Portugal have some of the highest percentages, with more than 74% of forest exposed to wildfire danger between 2018 and 2022 (OECD, 2023[36]). These large areas of forest exposure highlight the considerable risk forests face and should be considered a policy priority given both human risk and key role that forests play as carbon sinks around the world.

 
Figure 26. Increasing forest exposure to wildfire danger
Percentage of forested areas exposed to very high and extreme fire danger for more than three consecutive days, OECD and OECD partner countries, 2000-2022

Source: IEA/OECD (2022), "Climate-related hazards: Wildfire", Environment Statistics (database), https://oe.cd/dx/58u.

 
Box 4. Taming wildfires in the context of climate change

Through a cross-country analysis, (OECD, 2023[35]) provides a global assessment of wildfire risk, underlining the urgent need for governments to scale up climate change adaptation efforts to limit future wildfire risk and impacts. The report discusses the drivers behind the growing occurrence of extreme wildfires, including the role of climate change, and outlines their growing environmental, social, and economic impacts. The report identifies emerging wildfire policies and practices to manage wildfire extremes and provides a set of policy recommendations to support countries in wildfire risk reduction.

Key policy recommendations include:

  • Strengthen ecosystem protection and adaptive management for wildfire prevention.

  • Scale up fuel management efforts to reduce fuel accumulation and continuity.

  • Strengthen land-use planning and building regulations for wildfire prevention.

  • Harness knowledge for better wildfire management and improve wildfire risk assessments.

  • Strengthen the policy and institutional framework.

  • Promote a whole-of-government approach to wildfire management, including through national wildfire risk management strategies and central co-ordinating agencies.

  • Scale up funding and risk transfer instruments for wildfire risk reduction.

Source: (OECD, 2023[35])

 Extreme precipitation, flooding and storms

Extreme precipitation events pose serious dangers to countries by potentially causing flash floods, landslides, and impacting the population and economic infrastructure. A majority of OECD and partner countries experience some level of exposure to extreme precipitation events, but the duration of exposure varies considerably. OECD and partner countries with the highest share of land exposed to extreme precipitation events between 2018 and 2022 included Indonesia (36%), Colombia (28.5%), Peru (21.2%) and Brazil (15.6%).7 These countries experience higher precipitation due to being located in a tropical region with warmer temperatures and abundant moisture, amongst other factors.

In Europe, land exposure to extreme precipitation events remains low (< 3%). However, changing rain patterns affect ecosystems. For example, in central Europe, the wetter-than-average spring of 2023 offered partial relief after a dry winter, but the impact of severe drought in 2022 on groundwater levels means that rainfall was insufficient to replenish aquifers. At the same time, spring is less efficient than winter in replenishing aquifers, as rainwater is consumed by growing vegetation and higher evaporation rates due to higher temperatures (Copernicus Climate Change Service, 2023[37]).

Although dependent on crop types, extreme precipitation events can pose dangers to agriculture by causing flooding, soil erosion, water saturated soils and crop damage, threatening food production and livelihoods. This can be especially problematic for countries dependent on agriculture, making them overly vulnerable to precipitation changes due to climate change.

On average, Indonesia (31.6%), Colombia (13.2%), Costa Rica (9.8%), Peru (8%) and Brazil (3.3%) had the highest share of cropland exposed to extreme precipitation events between 2018 and 2022. The share of cropland exposed to extreme precipitation events has increased for countries such as Indonesia, with an estimated increase from 3.8% in 2000 to 41.1% in 2022. Six out of ten countries whose cropland area is most exposed to extreme precipitation events are also more dependent on agriculture as a share of GDP. For example, Indonesia and Colombia have, on average, an estimated 31% and 13% of cropland exposed to extreme precipitation events while their GDP share of the agriculture, forestry and fishing sector is 12.9% and 7.2%, which is significantly higher than the average in OECD and OECD partner countries (3.2%).

Meanwhile, extreme precipitation events are also increasing significantly in certain subnational regions, such as in South America and Southeast Asia (Figure 27). In Southeast Asia, for example, the Indonesian provinces of Kalimantan and Sulawesi are experiencing an increase in extreme precipitation events (Figure 27) while an estimated 35% and 33% of the land is used for croplands. This highlights that certain subnational regions already impacted by extreme precipitation may see further increases due to climate change, increasing risks to food security, and possibly dramatic changes in migration flows.

 
Figure 27. Increasing extreme precipitation events across Southeast Asia
Yearly number of additional days with extreme precipitation events (2018-22 average) compared to the reference period 1981-2010 across Southeast Asia

Note: Negative values have been removed because the focus is on the occurrence of extreme precipitation events. A variety of indicators have been developed that assess extreme precipitation; these should be consulted for more detailed analysis of individual countries.

Source: (Maes et al., 2022[20]).

The South Asian monsoon season is becoming increasingly unpredictable and less dependable (Fountain, Levitt and White, 2022[38]). The 2023 monsoon season brought more extreme weather events, bringing the heaviest rainfall in decades to northern India, causing rivers to overflow, with flooding and landslides washing away vehicles, destroying bridges and roads, and disrupting power and electricity (The Guardian, 2023[39]). Over 100 people across Himachal Pradesh, Uttar Pradesh, and Delhi died over a two-week period of intense rain and flooding, with thousands of others evacuated to relief camps (Mehrotra, 2023[40]).

Flooding is caused by a combination of factors including extreme precipitation, storm surges, river overflow and increased artificial surfaces. It threatens people’s lives, livelihoods and economic infrastructure. Among the 51 OECD and OECD partner countries, the Netherlands and Hungary have the highest percentage (~20%) of total land area exposed to extreme river flooding. Meanwhile, China is the most exposed country with 22% of its built-up area exposed to river flooding, followed by Latvia (20%) and the Netherlands (18%). In terms of agricultural land exposure, the most affected OECD and OECD partner countries are Hungary, the Netherlands, and the Slovak Republic with more than 17% of their cropland exposed to possible extreme events.8

River flooding can also cause human losses. In 2021, Germany was hit by floods that generated the highest costs caused by a climate extreme event in the post-war period, killing 189 people and causing direct economic damages estimated at 33.1 billion EUR (OECD, 2023[24]). Among OECD and OECD partner countries, populations in Latvia, the Slovak Republic and the Netherlands are the most exposed, with more than 30% of people potentially affected. Due to the sheer size of China (26%) and India (20%), the total number of people exposed in these two countries to river flooding is approx. 670 million (Figure 28).

Low-lying coastal communities face a range of coastal flooding hazards such as storm surges and erosion. These hazards are expected to worsen as climate change increases the frequency and severity of coastal floods. The most exposed countries are the Netherlands, Belgium and Denmark. The Netherlands has 51% of its land area potentially exposed to coastal flooding with a ten-year return period, followed by 6.4% for Belgium and 5.6% for Denmark. However, these figures should be interpreted with caution, as they do not account for existing flood protection measures or sea-level rise. Nevertheless, they underscore the importance of maintaining existing protections to prevent future impacts and the potential economic costs of dealing with climate change.

Built-up area exposure to coastal flooding is increasing. Across OECD and OECD partner countries, the percentage has increased significantly, from 1.8% in 2000 to 2.6% in 2020 (Figure 29). This suggests that additional investment in infrastructure will be necessary, particularly if built‑up area continues to expand in coastal zones. Across OECD and OECD partner countries, the Netherlands has 52% of its built‑up area exposed to coastal flooding, followed by Belgium (10%) and China (6.6%). This is explained by the fact that much of the land along the North Sea coast is either below sea level or just slightly above it, exposing a sizeable amount of the land and its built‑up areas to coastal flooding hazards.

 
Figure 28. Population exposure to river flooding varies between OECD and OECD partner countries
Percentage of population exposed to river flooding, with a return period of 100 years, OECD and OECD partner countries, 2020

Source: IEA/OECD (2022), " Climate-related hazards: River flooding", Environment Statistics (database), https://oe.cd/dx/58w.

 
Figure 29. Built-up area exposure to coastal flooding increased across OECD and OECD partner countries
Percentage of built-up area exposed to coastal flooding, with a return period of 100 years, OECD and OECD partner countries, 2000‑2020

Source: IEA/OECD (2022), " Climate-related hazards: Coastal flooding", Environment Statistics (database), https://oe.cd/dx/58x.

Storms affect all OECD and partner countries with varying degrees of intensity and occurrence, and at times worsen the effects of other hazards. For example, in the United States in 2022, Hurricane Ian caused extensive storm-surge inundation in low-lying coastal areas and river flooding, becoming the fourth strongest landfall on record in Florida. Countries most exposed to violent storms are located principally in northwest Europe and east Asia. Countries such as Belgium, Iceland, Ireland, the Netherlands, and the United Kingdom had more than 45% of their population and built-up areas exposed to violent storms in the period 2018-22 (Figure 30). Meanwhile, exposure to tropical cyclones is limited to a subset of OECD and OECD partner countries due to their geographic position. The most exposed OECD and OECD partner countries are Japan and Korea (90%), where more than 90% of their populations and built-up areas are exposed to tropical cyclones (with wind speeds higher than 119 km/h or 33 m/s), followed by Mexico and China with 25%.

 
Figure 30. Population in northwestern Europe and East Asia are particularly exposed to violent windstorms
Percentage of population exposed to violent windstorms, OECD and OECD partner countries, 2018-22 average

Source: IEA/OECD (2022), " Climate-related hazards: Wind threats", Environment Statistics (database), https://oe.cd/dx/58v.

 Economic losses from climate disasters

Extreme weather events, such as heatwaves and heavy precipitation,9 exacerbate existing social, political and economic stressors, with food insecurity being one such factor.10 While there is uncertainty about the trajectory of future changes in climate, increasing severity of extreme weather events, along with increasing population density in hazard-prone locations, is likely to lead to rising climate-related catastrophic losses in the future (OECD, 2021[41]).

Extreme weather events can cause damage to homes and businesses, as well as economic and social infrastructure such as schools, hospitals, roads and, power generation and distribution. Extreme events are causing increasingly devastating and widespread impacts on lives and livelihoods, particularly when they occur in conjunction with broader social, economic and political stressors (OECD, 2021[41]).

The World Meteorological Organization (WMO) reported an almost eight-fold increase in average daily economic losses between 1970‑79 and 2010‑19. While reported economic losses from climate-related events are highly volatile from year to year, they have increased globally since 1990 (Figure 31). Storms are responsible for the largest economic costs, followed by floods, droughts, extreme temperatures and wildfires, all of which incur a growing cost every year (Figure 31). For example, the estimated economic losses from Hurricane Ian in the United States were USD 113 billion in 2022, making it the third most costly tropical cyclone on record while, with 152 deaths, it caused the greatest loss of life from a Florida tropical cyclone since the 1930s (WMO, 2023[42]).

Developing countries, including least developed countries (LDCs) and small island developing states (SIDS), are disproportionately affected by the impacts of extreme weather events. This is due to their geographic location at low latitudes, generally lower levels of development and economic diversification, fiscal constraints, and their physical characteristics (OECD, 2021[41]). Moreover, reporting gaps in these countries underestimate the damages incurred. For example, the African continent saw 35% of deaths related to weather, climate and water extremes but just 1% of reported global economic losses (WMO, 2021[43]).

 
Figure 31. Storms, floods, droughts, extreme temperatures and wildfires increasingly claim the largest economic losses
Total economic losses, thousand USD (adjusted), OECD and OECD partner countries, 1990-2022

Source: OECD calculations based on data on EM-DAT.

 
Box 5. Loss and Damage Fund

The 27th session of the Conference of the Parties (COP27) held in Sharm el-Sheikh in November 2022, led to the establishment of a Loss and Damage Fund with the aim of providing financial assistance to countries most vulnerable and impacted by the effects of climate change.

To facilitate the operationalisation of the new funding arrangements, a transitional committee has been convened to prepare recommendations for adoption at COP28 in November 2023. Recommendations shall consider:

  • Establishing institutional arrangements, modalities, structure, governance, and terms of reference for the fund.

  • Defining the elements of the new funding arrangements.

  • Identifying and expanding sources of funding.

  • Ensuring co-ordination and complementarity with existing funding arrangements.

The Loss and Damage Fund should fill gaps that current climate finance institutions such as the Green Climate Fund and Adaptation Fund do not. Campaigners argue that the Loss and Damage Fund must be accountable to the most vulnerable, drawing on the experience of community-based organisations, and favouring financial instruments that are non-debt-inducing and grant-based. Financing instruments that could be used to provide a buffer and rapid pay-outs after disasters include social protection, contingency finance, catastrophe risk insurance and catastrophe bonds. However, a broadened donor base and innovative finance tools would be needed to respond to the magnitude of loss and damage.

Source: (UNFCCC, 2023[44])

Notes

1.

Including non-climate related disasters such as earthquakes.

2.

Ibid.

3.

Most recent evidence on the assessment of how average temperature in July compares historically (so far the highest month) possibly by looking at historical ice and other records ever.

4.

Hot days are defined as those during which daily maximum temperature surpasses 35°C. Due to the resolution of the raw data, it is possible that extreme heat for small islands is slightly underestimated. There are also several additional indicators to describe extreme heat (such as the UTCI (Universal Thermal Climate Index), which also takes moisture, wind and solar radiation into account); these should be taken into account for a more thorough analysis of exposure to heat for single countries.

5.

Tropical nights are defined as nights where the minimum temperature does not fall below 20°C. Due to the resolution of the raw data, it is possible that extreme heat exposure for small islands is slightly over- or underestimated. There are also several additional indicators to describe extreme heat (such as the UTCI), which also takes moisture, wind and solar radiation into account); these should be taken into account for a more thorough analysis of exposure to heat for single countries.

6.

Annual population exposure to more than 8 weeks of tropical nights.

7.

Extreme precipitation is defined here as precipitation of more than one week.

8.

River flooding events are defined in terms of a 100-year flooding event.

9.

Heatwaves in the 2022 pre-monsoon season in India and Pakistan, followed by exceptional flooding during the monsoon season caused enormous damage. Firstly, the decline in crop yields combined with the banning of wheat exports and restrictions on rice exports in India after the start of the conflict in Ukraine, threatened the availability of stability of staple foods in a country already affected by food shortages. Secondly, July and August were each the wettest on record in Pakistan, 181% and 243% above normal levels, respectively. Heavy monsoon rains caused severe flooding and landslides in Pakistan, leading to the spread of water-borne diseases, with the greatest impacts in the most vulnerable and food-insecure regions of southern and central Pakistan. Over 1 700 deaths were reported in Pakistan, along with 936 000 head of livestock, and over 2 million dwellings damaged or destroyed, bringing total damages to an assessed USD 30 billion (WMO, 2023[42]).

10.

As of June 2022, 28 million people were recorded as food insecure in Latin America and the Caribbean, making the region vulnerable to the impact of hurricanes and storms (WMO, 2023[42]). In the Greater Horn of Africa, the rains failed for the fifth consecutive season since late 2020, where, under the effects of the drought, an estimated 23 million people in Ethiopia, Kenya and Somalia faced acute levels of food insecurity as of January 2023. Heavy rainfall and flooding in Sudan and South Sudan have exacerbated crop damage, displacement, and conflictual and food insecurity conditions, putting over 7 million people at risk acute food insecurity as of July 2022. In South Sudan, four consecutive years of flooding, as well as macroeconomic challenges are expected to keep food insecurity at extreme levels (WMO, 2023[42]).

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