Rising cost of disasters

10 Jan 2018

According to new figures released at the beginning of January, 2017 was the second worst year on record for economic losses as a result of climate related disasters. In fact, the overall losses in 2017 were almost double the ten-year average. Hurricanes such as Harvey, Irma and Maria, as well as a severe earthquake in Mexico, are largely responsible for pushing these numbers up.
 

However, focusing on the large economic losses can mask the impact of disasters on the poorest. Relatively low-severity, small-scale and localised but frequent disasters may not have high financial costs, but they can wipe out savings and assets of the poor and vulnerable, and disrupt or destroy their livelihoods. And these events are happening more than most of us are aware: between 1990 and 2014 in Latin America, for example, there were 177 smaller and ‘silent’ disasters for every one large-scale disaster.

It is clear that the international community must do more to address the rising cost of disasters and the devastating impacts these have on peoples’ lives, livelihoods and culture. One initiative that aims to help address this is the InsuResilience Global Partnership, which formally launched during the UN climate negotiations in November last year. The Partnership builds on the ‘G7 InsuResilience Initiative’ to increase the access of people in vulnerable countries to insurance and support the development of early warning systems. The vision of the Partnership is to strengthen countries’ financial resilience, and the lives and livelihoods of the poor and vulnerable against the impacts of disasters. There is still a lot to be done as the Partnership develops, in terms of governance, monitoring & evaluation and establishing principles, to ensure it benefits the poorest. 

But we still need new sources of finance to pay for the losses – big and small. One proposal is for a ‘climate damage tax’, which calls for an equitable fossil fuel extraction charge to pay for the irreversible losses (both economic and non-economic) due to climate change. RESULTS UK along with over 60 organisations signed the Climate Damages Declaration, which was also launched at the climate negotiations. The declaration, based on the ‘polluters pay’ principle, recognises that the countries and communities most vulnerable to and hardest hit by climate change are the least responsible for causing it.

So, in 2018 we will continue our work with governments and other NGOs to ensure that disaster risk financing initiatives and mechanisms meet the needs of the poorest and most vulnerable. 

Rosemary Forest

Policy Advocacy Officer (Climate Risk Insurance)

Rosemary Forest is the Policy Advocacy Officer for Climate Risk Insurance. Rosemary is passionate about influencing international development policy and practice. She has previously worked on global diaster risk reduction policy, as well as undertaking research with local activists campaigning...

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