The costs of extreme weather events around the world will exceed $310 billion in 2024 (more than €296 billion at the current exchange rate), according to estimates by the Swiss Re Institute, consolidating an upward trend in parallel with the increase in global temperature. of the planet.
In 2024, marked in Spain by the tragic DANA of the Valencian Community, which left 216 dead in that region alone, catastrophes did not avoid any continent. Kenya lost 225 lives and displaced 212,600 people due to flooding. The country, with high pollution rates, had just had four seasons of one of the worst droughts in its recent history, plagued by extreme heat without rain.
The Brazilian state of Rio Grande do Sul suffered the highest rainfall in its history, with almost a third of the rain it records each year on average. They left more than a hundred dead, 130 missing and almost 400 injured in 425 towns. In the United Arab Emirates and Oman, similar inclement weather caused flooding at Dubai airport that was unprecedented in 75 years.
In Southeast Asia, spring heat waves with temperatures overwhelmed by the El Niño phenomenon hit Thailand especially hard (more than thirty deaths and record electricity demand to connect air conditioners). India had to delay the electoral process for several more weeks, already long to attend to the largest voter turnout on the planet in cities like Nandyala or Kadapa. The episode also hit the Philippines, Bangladesh, Austria and New Zealand, with mercuries touching 50 degrees Celsius.
The list of climate tragedies of 2024 includes an extraordinary succession of destructive fires in Western Canada with several days out of control, and mass evacuations after years without snow or precipitation. Also cyclones like Remal in the Bengali state of India and Bangladesh, of maximum virulence, or Hurricane Milton over Florida and the Caribbean, or tornadoes in United States territory that harmed half a million people.
Market analyzes that evaluate the damage that the climate inflicts on economies are already incorporated by central banks as a parameter to decide their monetary policies. But the wave does not seem to be enough for the acolytes of neoliberalism devoted to climate denialism, who minimize scientific advances and their warnings about the temporary proximity of an unbreathable atmosphere, on the eve of Donald Trump’s return to the White House.
The conclusions of one of the latest studies to calculate the true dimension of the environmental crisis, that of the Swiss Re Institute, are devastating. Those 310 billion in losses associated with extreme atmospheric events in 2024 are comparable to the GDP of Chile or Finland.
He think tank of the Swiss reinsurer estimates the global bill that firms in the sector have had to cover in compensation in 2024 at 135,000 million dollars (about 130,000 million euros). According to its experts, it is the fifth consecutive year of increases in coverage expenses. to clients, who in the last five years have always exceeded 100,000 million annually.
Another recent report by the consulting firm Oxera for the US International Chamber of Commerce (ICC) placed the global costs of all climate tragedies at $2 trillion between 2014 and 2023. As much as the value of Italy’s GDP, tenth largest economy on the planet.
These magnitudes affect one of the most buoyant industries on the planet, with a turnover of more than 7.2 trillion dollars in 2023 and an expected increase in business of 7.3% by 2024, according to The Business Research Company, a data firm. and market analysis.
But they are estimates that perfectly illustrate the severity of the main risk that humanity faces, in the midst of a denialist crusade in countries like the United States. The growing economic impact of climate change “demands a response of similar speed” to the effects it causes, proclaims John Denton, secretary general of the powerful American chamber institution ICC.
But the data that points to the US, the first global market, as the one that had to cover the most compensation in 2024, more than 50,000 million, to deal with catastrophes, does not seem capable of changing the intentions of the future tenant of the White House.
Even before Trump’s return, markedly contrary to policies to reduce net CO2 emissions, the world’s largest economy has seen how Republican governors in recent years have fueled these theories during Joe Biden’s mandate, ordering the massive withdrawal of securities. ESG (sustainable from an environmental point of view) of the state pension funds managed by their senior officials, in response to what they describe as the “woke doctrine” in defense of social justice that they so demonize.
Poor fighting
The US damage report accounted for two-thirds of the global insurance bill, far from the 13 billion in Europe, which allocated that figure mainly to floods. The Persian Gulf region suffered a similar magnitude of losses. As Balz Grollimund, head of Swiss Re’s Disaster Area and director of the study, recalls, only until September 2024, the average temperature of the planet increased by 1.54 degrees Celsius, above the objective of the Paris Agreements for the equator. of the century.
The Swiss Re expert leaves a warning for sailors that could be perfectly directed at the direct damage that the Dana caused in the Valencian Community. When analyzing the “heavy rains” that fell in Europe, and which generated the second largest compensation in its history, the director of the Swiss reinsurer assures that “the majority of incidents due to weather were the result of excessive concentrations in nearby areas.” to large cities, from the organic growth of demographics and economic and industrial activity and the settlement of inhabited localities in areas of river flows. All of this is the result of “uncontrolled urbanism”.
In his opinion, “investments aimed at mitigating and adapting prevention and emergency measures must be a priority.” Remember the floods in the Czech Republic, Poland and Austria, with additional repercussions in Slovakia, Romania, Italy and Croatia; boreal storms in the Scandinavian region; and the devastating effects that the excessive warming of the Mediterranean had in Spain in the Valencian, Castilian-La Mancha, Andalusian and Balearic regions.
In some of those latitudes there was as much rainfall in 8 hours as in the entire year, recalls Grollimund, for whom “climate change is, indisputably, the main and most determining culprit of the succession of annual records of increases in damage” and that “home coverage has skyrocketed” against inclement weather, which rose especially in the US: 33% between 2020 and 2023.
“Tragedy on the horizon”
“There is a tragedy on the horizon that seriously endangers the prospects of businessmen, politicians and technocrats.” “The authorities of the financial supervision agencies must begin a dialogue with environmental experts and institutions to find immediate solutions.”
These are the words of economist Mark Carney, double governor of the Bank of Canada between the credit collapse of 2008 and 2013 and of the Bank of England from that year to 2020, who thus described in one of his last speeches as British monetary authority the urgency of undertaking a transcendental turn. With another key reading: “Every cause needs leaders”, and central banks “we have to make an effort to understand the climate catastrophe and avoid any superficial discussion that does not contribute to giving sustainability to the actions” against this emergency.
Since then, the European Central Bank (ECB), first, and the Federal Reserve, later, say they have included surveillance models on climate risks in their diagnoses and assumed that their effects deteriorate the growth and stability of economies and markets. financial. A line that the rest of the Anglo-Saxon supervisory entities have later followed.
Among other directions, in the requirement of future climate change stress tests for banks and insurance companies, as detailed in a paper of the New York Federal Reserve. It identifies financial sector assets that would be vulnerable to a climate shock, their current resistance capacity and their solvency levels and capital expectations adequate to avoid a crisis like that of 2008.
The ECB and the Fed are considering whether climate emergency analyzes form specific areas of research within their research services. But these changes in predictive approaches may suffer a severe setback in less than three weeks with the arrival of Trump, with deep roots opposed to sustainability and investments with ESG criteria.
Trump’s return comes at a time when the sustainable transition is beginning to be cheaper and much more effective, according to analysts consulted by The Economist, because “energy demand is overestimated and technological advances are underestimated” that favor improvement. of the carbon footprint in especially polluting sectors and industries.
Thomas Kuh, head of ESG Strategy at Morningstar Indices, highlights Trump’s promises to promote fossil fuels and bury the Biden Administration’s resources in favor of renewables. Although, he affirms, the capital markets were an essential factor in the lowering of the costs of clean sources due to their stock market appreciation, with decreases of 90% in solar energy and 70% in wind energy in the last decade and a “innovative leap” among battery manufacturers.
#global #bill #climate #catastrophes #soars #billion
