Extreme Weather Events Linked to Climate Change Have Cost the World $2 Trillion Over the Past Decade, Report Finds

According to a new report by the International Chamber of Commerce and consultancy firm Oxera, extreme weather events over the past 10 years have cost a total of $2 trillion globally. The countries that have faced the biggest losses include the U.S., China and India.

The report tracked nearly 4,000 extreme weather events from 2014 through 2023. In total, the results found that these events affected more than 1.6 billion people and cost around $2 trillion in economic losses.

Over just the past two years, losses linked to extreme weather cost the world $451 billion. According to the report, that is about 19% more than the losses from the previous 8 years analyzed in the study.

“The data from the past decade shows definitively that climate change is not a future problem: major productivity losses from extreme weather events are being felt in the here and now by the real economy,” John W.H. Denton AO, secretary-general of the International Chamber of Commerce, said in a statement.

The report also warned about the increase in frequency of these extreme weather events, noting that there has been an 83% increase in climate disasters when comparing 1980–1999 to 2000–2019. 

Extreme weather-related losses can affect a wide range of sectors and may include direct impacts, such as property and infrastructure destruction, agricultural losses, premature deaths and injuries and more. From there, these problems can lead to indirect impacts, such as more strain on healthcare systems, supply chain disruptions and productivity loss. As such, the economic losses over the past decade can be hard to measure accurately and may be much greater than the $2 trillion accounted for in this report.

Data shows that the lowest income countries in the world have the smallest contributions of emissions and are hardest hit by the impacts of climate change. The International Chamber of Commerce warned that a single extreme weather event could lead to costs that are higher than some countries’ entire GDP for the year, and lower income countries faced higher losses per capita compared to wealthier nations.

“The main caveat is that these numbers actually miss the impact where it truly matters, in poor communities and in vulnerable countries,” Ilan Noy, a disaster economist who was not involved in the study, told The Guardian. Noy explained that losses in low-income countries can be even longer lasting on these communities compared to losses in high-income countries.

But the new report from the International Chamber of Commerce could still put pressure on high-income countries by outlining the economic impact of their major share of emissions that cause climate change. According to World Resources Institute, China, the U.S. and India are the world’s biggest greenhouse gas emitters, making up about 42.6% of global emissions. The U.S. lost $934.7 billion over the 10-year period, followed by China with $267.9 billion in losses and India with $112.2 billion in losses. 

As the International Chamber of Commerce noted, “Climate inaction comes at a high price to us all.”

The report authors hope that the findings will inspire stronger, more immediate climate action from countries, particularly with the report published just before the start of COP29.

“The upcoming UN Climate Change Conference cannot be — as some have suggested — a ‘transitional’ COP,” Denton said. “We need to see outcomes capable of accelerating climate action commensurate with the immediate economic risks. This must start with a comprehensive package to accelerate the deployment of finance to ensure that all countries can transition towards low-carbon and climate-resilient development without further delay.”

“Simply put, the time for action is now,” Denton added.

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