Extreme weather driven by climate change cost the world billions in 2021
Study identifies ten extreme events, influenced by climate change, that each caused $1.5 billion in damage or more
Floods, cyclones and drought also killed and displaced millions across the globe in places which have done little to cause climate change. (Image: Save the Children)

A new report by Christian Aid, Counting the cost 2021: a year of climate breakdown identifies 15 of the most destructive climate disasters of the year. Ten of those events cost $1.5 billion or more. Most of these estimates are based only on insured losses, meaning the true financial costs are likely to be even higher.

Among them is Hurricane Ida which struck the US in August costing $65 billion and killing 95 people. July floods in Europe cost $43 billion and killed 240 while floods in China’s Henan province caused $17.5 billion of destruction, killed 320 and displaced over a million.

While the report focuses on financial costs, which are usually higher in richer countries because they have higher property values and can afford insurance, some of the most devastating extreme weather events in 2021 hit poorer nations, which have contributed little to causing climate change.

Yet in addition to the financial cost, these extreme weather events have caused severe human suffering from food insecurity, drought and extreme weather events causing mass displacements and loss of life. South Sudan has experienced terrible floods which have seen more than 850,000 people forced to flee their homes, many of whom were already internally displaced, while East Africa continues to be ravaged with drought, highlighting the injustice of the climate crisis.

Some of the disasters in 2021 hit rapidly, like Cyclone Yaas, which struck India and Bangladesh in May and caused losses valued at $3 billion in just a few days. Other events took months to unfold, like the Paraná river drought in Latin America, which has seen the river, a vital part of the region’s economy, at its lowest level in 77 years and impacted lives and livelihoods in Brazil, Argentina and Paraguay.

Cyclone Yaas, a tropical cyclone was formed in the Bay of Bengal and moved towards Bangladesh and India, forcing thousands of people to leave their homes and killing 19. In addition to the heavy rainfall, the cyclone caused a strong storm surge which destroyed embankments and inundated low-lying areas in West Bengal. Wind speeds reached 140 km/h. Economic losses were estimated at $3 billion40 and more than 1.2 million people living in low-lying areas had to leave their homes. In Odisha, more than 10,000 villages were damaged.

Due to its geographical situation and socio-economic conditions, the countries in the Bay of Bengal, such as Bangladesh, are some of the world's most vulnerable regions to climate change. In addition to being densely populated, the conditions in the bay are ideal for tropical cyclone formation. Also, the lowlands in the Ganges delta are prone to flooding and saltwater intrusion.

Four of the ten most costly events took place in Asia, with floods and typhoons costing a combined $24 billion. But the impact of extreme weather was felt all over the world. Australia suffered floods in March which displaced 18,000 people and saw damage worth $2.1 billion while floods in Canada’s British Colombia led to $7.5 billion in damage and 15,000 people having to flee their homes. Insurance and financial loss data on the recent tornadoes in the US is incomplete, so is not included in this report but may be included in next year’s study.

Worryingly such climate devastation is set to continue without action to cut emissions. Insurer Aon warns that 2021 is expected to be the sixth time global natural catastrophes have crossed the $100 billion insured loss threshold. All six have happened since 2011 and 2021 will be the fourth in five years.

The report also highlights slow-developing crises such as the drought in the Chad Basin which has seen Lake Chad shrink by 90% since the 1970s and threatens the lives and livelihoods of millions of the world’s poorest who live in the region.

These extreme events highlight the need for concrete climate action. The Paris Agreement set the goal of keeping temperature rise to below 1.5°C compared to pre-industrial levels, yet the outcomes from COP26 in Glasgow do not currently leave the world on track to meet this goal which is why much more urgent action is required.

It’s also vital that in 2022 more is done to provide financial support to the most vulnerable countries, in particular the creation of a fund to deal with the permanent loss and damage suffered in poor countries caused by climate change.

“The costs of climate change have been grave this year, both in terms of eye-watering financial losses but also in the death and displacement of people around the world. Be it storms and floods in some of the world’s richest countries or droughts and heatwaves in some of the poorest, the climate crisis hit hard in 2021. While it was good to see some progress made at the COP26 summit, it is clear that the world is not on track to ensure a safe and prosperous world,” said the report author, Dr Kat Kramer, Christian Aid’s climate policy lead.

“The climate crisis has not abated in 2021. My own country of Bangladesh has seen this first hand, suffering at the hands of Cyclone Yaas not to mention the ever-growing threat of sea levels rise. I was at COP26 in Glasgow and while we heard lots of warm words from politicians, what we need is action that will see emissions fall rapidly and support given to those in need,” said Nushrat Chowdhury, Christian Aid’s Climate Justice Advisor in Bangladesh.

She also added that although it was good to see the issue of loss and damage become a major issue at COP26 it was bitterly disappointing to leave without a fund set up to actually help people who are suffering permanent losses from climate change. She stressed the global priority in 2022 needs to be to bring that fund to life.

“It is the industrialised north that has contributed to much of the climate change we see today. Those countries had agreed to mobilise $100 billion of climate finance per year by 2020 but failed to meet this goal,” said Dr Anjal Prakash, research director at the Bharti Institute of Public Policy, Indian School of Business. He was the coordinating lead author in the IPCC’s special report on oceans and cryosphere in a changing climate.

Prakash also said that during COP 26, the countries of the global south came with an expectation that the gathering will show them a roadmap in achieving the global goal on adaptation funding which was a major constituent of the Paris Agreement.

“As this new report documents, India is one of the countries which is greatly disadvantaged by climate change-induced disasters. Adhering to the principles of climate justice, the countries of the global south must call for technology transfer and adaptation finance for the countries that have not contributed historically to climate change but are bearing the brunt,” he said.

"This is a powerful and important report. It is eye-opening to have these climate impact stories of 2021 collected together and the estimates for the cost of lives, livelihoods and community, which is irreversibly altered when people are displaced,” said Dr. Heidi Steltzer, Professor of Environment and Sustainability and Biology, at Fort Lewis College, Colorado.

“The loss of community and with it connection to the Earth, to culture, and to one another is a tremendous cost. From this, what can we learn? This movement of people can be an opportunity for new connections and understanding – an opportunity to listen to the stories of displaced people,” she adds. Steltzer added that in doing so, we can grow understanding by learning across cultures about practices that cultivate well-being and increase security during crises that take place during extreme climate years such as 2021.

"Climate change will bankrupt us, and along the way we will lose so much more than money. To avoid this eventuality, we need to take courageous action - making sure that the burden of costs is distributed and do not worsen global inequality, while also making activities which drive climate change more expensive," added Rachel Mander, a member of the Young Christian Climate Network. Rachel took part in a walking relay to Glasgow for COP26.

 “This report gives a sense of the climate suffering which has taken place around the world in 2021. It’s a powerful reminder that the atmosphere will not wait for us to deal with the Covid pandemic. We need to act at scale and with urgency if we’re going to fend off these kinds of impacts into the future. Africa has borne the brunt of some of the most devastating, if not most financially costly, impacts, from flooding to drought,” said Mohamed Adow, Director of Nairobi-based think tank Power Shift Africa.

Right now East Africa is in the grip of a drought which is pushing communities to the brink. This is why it’s vital that 2022 sees real action to help such communities and why it’s good that COP27 will be held on African soil in Egypt. This needs to be the year we provide real financial support for those on the front line of the crisis.

Read the full report here

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