Extreme weather
events will boost costs
The costs of extreme weather events have
been growing rapidly. Since 1960, the number
of global weather-related disasters has
increased four-fold, real economic losses
seven-fold and insured losses twelve-fold.
Real losses are estimated to have risen
from US$3.9 billion per year in the 1950s to
US$40 billion per year in the 1990s.
Part of the rise in disaster losses can be
explained by the explosive growth in human
population, inappropriate land-use planning
(such as building on floodplains or areas vulnerable
to erosion or coastal storms), the
expanding financial value of homes and
infrastructure and the availability of insurance.
But climate change and worsening
weather extremes such as winds, floods and
droughts can also be expected to play a role.
Recent history has shown that weatherrelated
losses can overwhelm insurance
companies, which may respond by hiking
premiums and withdrawing coverage from
vulnerable sectors and regions. This can
lead to higher demand for publicly funded
compensation and relief.
Developing countries are most vulnerable to
natural disasters. For many of them, weather-
related risks could become uninsurable,
premium prices could rise substantially, or
insurance would become nonexistent or
harder to obtain. Countries already hardpressed
to provide the essentials of food,
safe water and shelter have little leeway for
absorbing the extra costs of natural disasters.
Internal migration will likely add to the
total costs.

Conclusion:
get ready to adapt
Today’s international debate on climate
change is focused on the challenge of
reducing greenhouse gas emissions. This
makes sense: unless we start cutting emissions
soon, atmospheric concentrations of
heat-trapping gases will continue to rise,
making the impacts described above that
much more likely and severe.
But this does not mean that we should not
already plan how to adapt to a warmer
world. Planning for adaptation can and
should complement efforts to reduce emissions,
and an early start would reduce the
overall costs. This is especially true when it
comes to many large and expensive decisions,
such as what kind of building or road
to construct, where to locate a new nature
reserve, or when to replace or relocate a
power plant. Many investment and planning
decisions being taken today could strongly
influence the costs of adaptation in the
coming decades and the options available
to future generations. In some cases
advance planning can ensure that efforts to
adapt achieve great benefits at low or even
no cost.
Yet another advantage is that many adaptation
measures will help people whether or
not the climate changes. For example,
adapting to current climate risks such as
droughts and storms will offer immediate
benefits to today’s most vulnerable people
as well as benefits that will be appreciated
by future generations. Similarly, adaptation
measures can be incorporated into programmes
that address existing non-climate
stresses, such as biodiversity loss. The
more we strengthen our societies today, and
the more we work towards a healthier natural
environment, the better prepared and
more resilient our world will be in the future.
Of course, both natural and social systems
will adapt spontaneously to some degree.
Such adaptation, however, will not be sufficient
for many regions and sectors. And
even planned adaptation will not succeed in
addressing all impacts. Some unique and
vulnerable natural and social systems (such
as indigenous communities) may be
irreparably harmed if the climate changes
beyond a certain threshold. Risks related to
extreme weather events and unlikely-butpossible
large-scale singular events, such
as the collapse of the West Antarctic ice
sheet or the shutdown of the so-called Gulf
Stream, may be particularly difficult to
respond to.
A major challenge facing us today is that
there are still many uncertainties about climate
change impacts and our options for
adapting to them. There are simply too many
variables – such as population growth, the
economy, technology, and environmental
stress – that, like the climate, will change
over time. How do we distinguish cause and
effect? What will be the overall consequence
as the various individual impacts
accumulate and interact over time?