Extreme weather cost $2tn globally over past decade, report finds | Global economy

Violent weather cost the world $2tn over the past decade, a report has found, as diplomats descend on the Cop29 climate summit for a tense fight over finance.

The analysis of 4,000 climate-related extreme weather events, from flash floods that wash away homes in an instant to slow-burning droughts that ruin farms over years, found economic damages hit $451bn across the past two years alone.

The figures reflect the full cost of extreme weather rather than the share scientists can attribute to climate breakdown. They come as world leaders argue over how much rich countries should pay to help poor countries clean up their economies, adapt to a hotter world and deal with the damage done by increasingly violent weather.

“The data from the past decade shows definitively that climate change is not a future problem,” said John Denton, secretary-general of the International Chamber of Commerce (ICC), which commissioned the report. “Major productivity losses from extreme weather events are being felt in the here and now by the real economy.”

The report found a gradual upward trend in the cost of extreme weather events between 2014 and 2023, with a spike in 2017 when an active hurricane season battered North America. The US suffered the greatest economic losses over the 10-year period, at $935bn, followed by China at $268bn and India at $112bn. Germany, Australia, France and Brazil all made the top 10.

When measured a person, small islands such as Saint Martin and the Bahamas saw the greatest losses.

Fire, water, wind and heat have wiped more and more dollars off government balance sheets as the world has grown richer, people have settled in disaster-prone regions, and fossil fuel pollution has baked the planet.

But until recent years, scientists struggled to estimate the extent of the role that humans played by warping extreme weather events with planet-heating gas.

Climate breakdown was responsible for more than half of the 68,000 heat deaths during the scorching European summer of 2022, a study found last month, and doubled the chance of the extreme levels of rainfall that hammered central Europe this September, an early attribution study found. In some other cases, researchers found only mild effects or did not observe a climate link at all.

Ilan Noy, a disaster economist at Victoria University of Wellington, who was not involved in the ICC study, said its numbers align with previous research he had done but cautioned that the underlying data did not capture the full picture. “The main caveat is that these numbers actually miss the impact where it truly matters, in poor communities and in vulnerable countries.”

A study Noy co-wrote last year estimated the costs of extreme weather attributable to climate breakdown at $143bn a year, mostly due to loss of human life, but was limited by data gaps, particularly in Africa.

“Most of the impact that is counted is in high-income countries – that’s where asset values are much higher, and where mortality from heatwaves is counted to be much larger,” said Noy. “Clearly, the losses of homes and livelihoods in a poor community in poor countries are more devastating in the longer term than losses in wealthy countries where the state is able and willing to assist in recovery.”

The ICC urged world leaders to act faster to get money to countries that needed help to cut their pollution and to develop in ways that can withstand the shocks of violent weather.

“Financing climate action in the developing world shouldn’t be seen as an act of generosity by the leaders of the world’s richest economies,” said Denton. “Every dollar spent is, ultimately, an investment in a stronger and more resilient global economy from which we all benefit.”