Catastrophe Study Sees Little Prospect of Cutting Economic Cost

Economic losses from natural catastrophes run at around US$240bn each year, with little prospect of this figure being reduced.

The conclusion comes from a global study of economic catastrophe losses by the United Nations International Strategy for Disaster Reduction (UNISDR) and catastrophe modelling firm AIR Worldwide, which presented the results at the UN’s world conference on disaster risk reduction.

Dr. Milan Simic, senior vice president of AIR Worldwide, said the study normalised the economic losses from major natural disasters over the past 20 years and found that they oscillate around a baseline value of US$240bn.

This is close to the US$250bn-$300bn estimate of current annual levels of natural and man-made disaster losses presented in UNISDR’s 2015 global assessment report for disaster risk reduction.

Dr. Simic said: “What the study tells us that it is next to impossible to reduce existing levels of economic losses but that they provide a baseline and a context for improving on key areas of development over the lifetime of the new framework for disaster risk reduction which hopefully will be adopted tomorrow.”

“Although global catastrophe losses are trending upwards over the past decades, much of this can be attributed to population and wealth growth, and an increase in properties being built in areas of high catastrophe risk, such as coastlines.”

Jerry Velasquez, UNISDR’s chief of advocacy and outreach, added: “This study tells us that the way we do development is the reason why economic losses are so high. Development drivers are stronger drivers of the increase of risks than hazards themselves. In order to limit economic losses in the future, we need to improve urban planning and make economic growth resilient.”

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