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Natural disasters wreaking havoc on many economies


The report follows a year scarred by extreme weather including Hurricane Sandy
The report follows a year scarred by extreme weather including Hurricane Sandy

Staff writers

January 30, 2013 — According to the World Economic Forum, fragile economies and increasing extreme weather events are near the top of the list for the world's greatest worries this year.

Experts say environmental and economic concerns are on a "collision course"
Experts say environmental and economic concerns are on a "collision course"

The Global Risks report has highlighted greenhouse gas emissions and climate- related risks for several years now, but it's only this year that the threat of the world's weakened economy and its ability to respond to these events has emerged as a central theme among the more than 1,000 experts surveyed. 

"The most important finding in this year's report is that two storms, one environmental, the other economic, are on a collision course," says David Campbell of Oliver Wyman Group, one of the several companies which collaborates with the Global Risks report. "Just when the world's exposure to more frequent climate change related-natural catastrophes is rising, our innate ability to deal with these shocks is decreasing because of the weakened global economy."

Campbell adds that extreme weather events like Hurricane Sandy are becoming the "new normal." As a result, economic losses from these natural catastrophes are rising significantly as well. 

"That is in part due to the increased frequency of events, but also in part because more people are living in disaster prone areas worldwide," he says.

Natural disasters wreak serious havoc on many economies
Natural disasters wreak serious havoc on many economies

While a number of things can be done to address these concerns, experts are worried they won't happen at the speed they need to.

"We believe countries need to invest more in risk management," says Campbell. "Nations should appoint country risk officers to be in a multidisciplinary role to monitor and prioritize the management of risks within a country." 

Campbell adds that without allocating the resources needed to mitigate the rising risk from severe weather events, global prosperity for future generations could be threatened. 

"For that reason, political leaders, business leaders and scientists urgently need to come together to manage these complex risks."

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