Over the last three decades, economic losses associated with natural disasters like floods, storm surges, hurricanes, and droughts have risen in lockstep with the steady climb in global temperatures. Data from a growing number of governments suggest that, so far this century, such losses have amounted to around $2.5 trillion. And, as the latest report from the United Nations Intergovernmental Panel on Climate Change warns, the worst is yet to come.
This escalation will, of course, be driven largely by the increasingly frequent and intense weather events associated with higher global temperatures. But inadequate preparation will exacerbate the problem considerably.
Today, massive investments in critical infrastructure, industrial expansion, and urban development – vital to accommodate an expanding global population, set to reach nine billion by 2050 – are being made without adequate regard for disaster risk. In the absence of a comprehensive effort to protect these new economic assets, disaster-related costs will skyrocket in the coming decades.
In this sense, climate-change forecasts should challenge politicians and business leaders to re-calibrate their perceptions of exposure and disaster risk. Decision-makers must recognize that there is no such thing as a natural disaster; there is only the disastrous impact of natural hazards on infrastructure, including workplaces, homes, roads, schools, and hospitals.
Following the 2004 Indian Ocean tsunami – which devastated the coastlines of 11 countries, resulting in more than 150,000 deaths, a half-million injuries, and over $10 billion in damages – 168 governments agreed to the Hyogo Framework for Action (HFA), a comprehensive ten-year plan for reducing disaster risk. Within a year, Hurricane Katrina underscored the plan’s importance, contributing to a new annual record for insured economic losses worldwide. (The record was trumped again in 2011, owing largely to Japan’s Tohoku earthquake and tsunami.)
So far, HFA implementation has had mixed results. While measures like improved early-warning systems have reduced disaster-related mortality rates, economic losses continue to soar, as investors, struggling to understand underlying risk factors, set aside common sense in favor of short-term expediency in land use and construction.
Continued development in vulnerable regions – particularly coastlines – contributes heavily to the increasing exposure of economic assets. The proportion of the world’s GDP that is exposed annually to tropical cyclones increased from 3.6% in the 1970’s to 4.3% in the first decade of the twenty-first century.
The risk of economic loss from floods is increasing particularly quickly in OECD countries. In the United States, for example, 2010 census data indicate that 39% of the population lives in shoreline counties. There are already 49 million housing units in these coastal areas, with an average of 1,355 building permits issued daily. Last year, this settlement pattern severely exacerbated the impact of Hurricane Sandy – the second-costliest hurricane in US history.
There is some good news. Norway has emerged as a world leader in rigorous building standards aimed at enhancing protection from floods and storm surges, with legislation introduced over the last four years having established a classification system for new construction. Buildings regarded as critical infrastructure, such as hospitals, must be able to withstand a 1,000-year flood (that is, a flood magnitude with a 0.1% probability of occurring in a given year), while housing must be able to withstand a 200-year flood.
Similarly, following the Canterbury earthquakes of 2010 and 2011, New Zealand developed the Greater Christchurch Urban Development Strategy, aimed at maximizing the efficiency, livability, and sustainability of cities. The strategy – which focuses on transportation, urban design, and housing and water management – accounts for threats posed by natural hazards like earthquakes, floods, and rock falls in identifying the most appropriate land for development.
Given the tremendous savings implied by eliminating unnecessary risks, and minimizing those that are inescapable, such prescriptive solutions make economic sense. With this in mind, the second Hyogo Framework for Action, to be adopted in 2015, will emphasize improved building practices and transparent, informed decision-making on land use. It will also aim to enhance the role of the private sector, which accounts for 70-85% of total investment in most economies.
The outcome – more secure living conditions – will bring incalculable benefits to developed and developing economies alike.
Margareta Wahlström is the UN Secretary-General’s Special Representative for Disaster Risk Reduction and Head of the UN Office for Disaster Risk Reduction.