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Climate risk management

Storm damage on the Caribbean island of St. Lucia

The devastating impacts of climate change are already making themselves clearly felt, compromising the livelihoods of millions of people. Natural disasters and extreme weather events are growing dramatically in frequency and intensity. Coupled with the emerging changes in the world's climate, they are causing massive damage every year. It is estimated that climate-related damage has quadrupled since 1992. In 2015, economic losses related to natural disasters alone came to an estimated 92 billion US dollars. An average of over 300 billion US dollars' worth of damage is caused each year.

In 2014, some 900 extreme weather events caused 100 billion US dollars of damage, with 60 per cent of that damage occurring in developing countries. It is developing countries and emerging economies that are particularly badly hit by climate change and, at the same time, least equipped to cope with it. Climate change is therefore threatening to reverse their development gains.

The figures mentioned do not even include impacts that cannot be measured directly in economic terms, such as loss of human life or cultural assets. What is almost impossible to gauge are the long-term consequences of climate change, for example the destruction of ecosystems, rising sea levels or acidification of the oceans. Valuable habitats and the cropland that is so urgently needed to feed the world’s growing population are at risk. The methods and techniques used so far to calculate and manage climate risks do not take into account this kind of damage and the resulting losses, either economic or non-economic. That shows how great a challenge it is to develop and apply a comprehensive range of methods and measures to assess and, above all, manage climate risks.

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