Climate change could add more than 20 percent, or $100 billion annually, to the cost of extreme weather events around the world by 2040, according to a new analysis by researchers at Cambridge University. The new report measures direct costs, such as damage to buildings and infrastructure, as well as indirect costs, including disruptions to supply chains and business operations.
Natural disasters such as floods, heatwaves, droughts, and storms currently cost $195 billion annually in direct expenses. By 2040, researchers found that number could rise to $234 billion, an increase of $39 billion a year. When the disruption these events cause to the global economy is factored in, climate change could add a total of $100 billion to the cost of disasters every year.
“Companies are struggling to reconcile the long-range forecasts of the consequences of a warmer planet in several decades’ time, with weather changes that are already impacting their businesses in various ways,” said Andrew Coburn, the chief scientist at Cambridge’s Center for Risk Studies, which produced the report.