According to a report released on Monday, the worldwide economy might suffer losses of $5.6 trillion by 2050 as a results of worsening droughts, floods, and torrential rain in a number of the world’s greatest nations. This year, flooding brought on by torrential rains submerged cities in China and Asian nation and interrupted the supply of water and electricity in India, while drought put European farmer crops in danger. The world economy is losing many billions of dollars as a results of these catastrophes. According to the Emergency Events Database maintained by the Brussels-based Centre for Research on the Epidemiology of Disasters, the tough droughts, floods, and storms of last year resulted in global losses of quite $224 billion.
However, the analysis by engineering and environmental consultant firm GHD cautions that as climate change generates more intense rainfall, flooding, and drought in the future decades, these expenditures are expected to skyrocket.
Water can “be the most damaging force that a community can experience” when it is too much or not enough of it, according to Don Holland, who is in charge of GHD’s Canadian water market program.
GHD evaluated the water risks in seven nations, including the United States, China, Canada, the United Kingdom, the Philippines, the United Arab Emirates, and Australia, which reflect various economic and meteorological situations.
The team calculated the losses that countries will experience in terms of immediate costs as well as to the overall economy using data from the global insurance market and scientific studies on how catastrophic occurrences can affect various industries.
Losses in the United States, the world’s largest economy, could total $3.7 trillion by 2050, with US GDP shrinking by about 0.5% per year until then.
China, the world’s second largest economy, faces cumulative losses of approximately $1.1 trillion by mid-century.
Manufacturing and distribution would be the hardest hit of the five most important business sectors, with disasters costing $4.2 trillion, as water scarcity disrupts production and storms and floods destroy infrastructure and inventory.
The agricultural sector, which is vulnerable to both drought and extreme rainfall, could suffer losses of $332 billion by 2050.
Retail, banking, and energy are also facing significant challenges.
A global group of experts launched a new commission to research the economics of water at this year’s World Economic Forum in Davos, Switzerland, with the goal of advising policymakers on water management.
According to commission co-chair Tharman Shanmugaratnam, we must “transform how we govern water and the climate together.” “The costs are not insignificant, but they are dwarfed by the costs of allowing extreme weather to wreak havoc.”