Study predicts growing threat could hinder US economic prowess: 'That really starts to cut into our growth'
A study by reinsurance company Swiss Re revealed that the United States has been hit hard by weather-related disasters, and the total economic cost might only be apparent later down the road.
What's happening?
In February, Swiss Re released its analysis of 36 countries with adjusted numbers to account for each nation's wealth. The insurance giant found that the U.S. lost nearly 0.4% of its gross domestic product, or $97 billion, to severe disasters like hurricanes and floods.
"If we think that in the future we'll have relatively modest forms of growth — 2, maybe 3% growth in GDP — and here we're at 0.4% of GDP losses with just these storms and just this one sector, that really starts to cut into our growth," Tulane University professor of real estate and urban planning Jesse Keenan told the Washington Post.
"It could really become something that reduces our economic prowess," Keenan added.
The Philippines suffered the most losses, with 3% of its GDP lost to disasters every year, while Thailand, Austria, and China rounded out the top five in the analysis. Shockingly, the U.S. experienced almost double in GDP-adjusted damage compared to the number five spot.
Why is this concerning?
Last year, the U.S. experienced a record number of billion-dollar disasters at 23 — and that was with several months still to go. By the end of 2023, that total had climbed to 28, according to the National Oceanic and Atmospheric Administration.
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As Swiss Re chief economist Jerome Haegeli explained to the Post, the U.S. is in a unique position of having diversity of climate and geography, making it vulnerable to a range of isolated weather-related disasters.
However, rising global temperatures linked to human-caused pollution have caused more frequent and severe weather events. This has led to skyrocketing insurance costs and contributed to a housing crisis. Some insurers have pulled out of high-risk states like Florida altogether.
What can be done about this?
Swiss Re's analysis highlighted the need for "adaptation measures," and there are many organizations, companies, and people who are already implementing them.
One California community is aiming to become more climate resilient by installing a network of rain gardens to limit flooding and water pollution. Others are turning to innovative building designs to protect themselves against extreme weather.
Changing the way we use electricity and limiting our plastic consumption can also contribute to a more peaceful climate in the long term, as gas, oil, and coal generate more than three-quarters of the pollution causing our planet to overheat, according to the United Nations.
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