Tag: Economics

Destruction resulting from a catastrophic event can be defined and measured. The gross domestic output can measure economic losses, while the number of deaths can determine human losses. The balance of these two can be vastly different in low vs. high human development countries. For example, the average number of deaths per disaster in low human development countries with a per capita GDP of less than US$2,000 can be much higher, say 1000, while the economic losses could be less than US$100 million. On the other hand, the average number of deaths per disaster in high human development countries with a per capita GDP higher than US$14,000 can be lower, say less than ten, while the economic losses could be over US$600 million. Measuring an extreme event by financial losses alone is not enough to label it a disaster or not. Quantifying losses can be done using sector-specific vulnerability curves based on modeled data, including but not limited to figures of population, building data, structural classes, structural characteristics, and insurance claims. Research from industry sources and historical events can validate these vulnerability curves.

Strengthening the capacities of national government, private institution, international agencies, etc. worldwide in the fight against multiple hazards as a consequence of climate change requires support, funding and investments. Policy, decision making, preparedness and planning regarding environmental, physical, economic and social characteristics at global, national, regional and local resolutions will have to be implemented. However, the long-term costs and benefits of environmental policy and regulations in the global fight against climate change and the reduction of environmental harm involves estimating costs and benefits projections of future unknown economic activity, effects, technological innovations, etc. The vast array of issues, interactions, etc. are not entirely known and as such, very difficult to quantified or monetized. These difficulties are magnified by the long-term and global scale of the problem, which makes it difficult to provide a solid objective basis for long-term policy and decision making.