Those that lose out: Paying for the biggest cost of climate change
Climate change induced extreme weather events are on the rise, exacerbating inequalities both between and within countries on all continents. From hurricanes to heatwaves, extreme events impose costs that are not borne equally and that weigh more heavily on the poorest. “We are increasingly seeing that differing capacities for adapting to climate change are not just a matter that concerns high- and low-income countries but also the social differences within wealthy ones,” says CMCC researcher Giacomo Nicolini.
On July 8th hurricane Beryl made landfall in Texas. With winds reaching up to 265 kilometers per hour it became the Atlantic’s earliest Category 5 hurricane on record due to a combination of factors, including record warm sea temperatures in the Atlantic, which in turn are widely attributed to anthropogenic climate change. The previous month in Europe, storms led to widespread flooding in Switzerland and Italy; followed by wildfires burning through large swathes of Greece.
“Climate change is altering the frequency, intensity and sometimes even the location of extreme weather events — these changes are currently the biggest impact of climate change,” says Ilan Noy, Chair in the Economics of Disasters and Climate Change at Victoria University of Wellington and the Gran Sasso Science Institute.
The question is, how are researchers investigating the impact and cost of climate change? Extreme event attribution science (EEA) helps identify the main contributing factors that lead to extreme weather or climate events. EEA enables researchers to establish the relative influence of global warming versus other factors such as natural variability. This has added to the growing scientific consensus on the role of anthropogenic climate change on both frequency and intensity of extreme events.
Organizations such as the American Meteorological Society provide annual reports dedicated to explaining extreme events from a climate perspective, and their 2019 report documents 168 attribution studies, of which 73% revealed a considerable link to human-caused climate change.
Although EEA is used to study how climate change influences the meteorological characteristics of weather events, there is also growing interest in understanding how these changing characteristics translate to social, economic, or environmental impacts.
To this end, more recent efforts have taken EEA one step further by looking at socio-economic impact data to develop extreme event impact attribution (EEIA) — which in practical terms means an analysis of the costs of climate change that are caused by the change in frequency and intensity of extreme weather events.
In the case of Beryl, the flooding in Switzerland and Italy, and the wildfires in Greece, future studies may use EEIA to determine not only how influential climate change was in their occurrence but also the extent of damages it caused. A valuable tool not only for economic impact assessments but one that also has the potential to inform climate change litigations, and facilitate future planning and prioritizing of climate change adaptation strategies.
What are the impacts?
What is certain is that the majority of studies involving EEIA show that climate change is exacerbating economic inequalities and hitting the poorest the hardest. This is particularly apparent when looking at studies that compare the impact of climate change across countries. A case in point is the use of EEIA as a tool in the development of the United Nations’ Loss and Damage (L&D) Fund, whereby quantifying the economic impacts of climate change on any given extreme event provides valuable information in the process of calculating how much money the L&D Fund needs, which countries the money should go to, and for what impacts.
“Over the past twenty years Small Island Developing States (SIDS) have experienced a lot more of these climate change induced or attributed extreme weather damages compared to other countries,” says Noy, who also points out that these countries are also some of the least responsible for the emissions that are leading to global warming.
Research by Noy shows that SIDS suffer higher levels of loss and damage than non-SIDS across all country-income groups, which manifests itself in impacts such as five times more climate change-attributable deaths due to extreme weather.
Furthermore, floods and storms affecting SIDS are projected to produce cumulative climate change attributable loss and damage of $56 billion under a 2°C warming scenario by 2050, adding up to an 11% increase in annual loss and damage over the next twenty three years (2023–2045) compared with the previous two decades or so (2000–2022).
“What this shows is that the poor are living in more exposed places and they are more vulnerable to extreme weather due to a lack of resources and an inability to invest in adequate resilience,” continues Noy.
A relationship that is not just limited to SIDS. In another study, Noy looks at the impact of hurricanes on public debt in the Caribbean, revealing how storms have been intensifying due to anthropogenic climate change and, in the process, causing further debt accumulation in the region. In fact, the impact of severe hurricanes on public debt that is attributable to climate change in the Caribbean is shown to increase debt by 3.8% when compared to the level of debt at the time of the event.
These studies add to a considerable body of literature on the impact of climate change on economic growth — and hence the effect of rising temperatures on gross domestic product (GDP) growth rates at the country-level — and how they cause increased economic inequality.
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