Evidence for sharp increase in the economic damages of extreme natural disasters – 7 October 2019

Climate change has increased the frequency and intensity of natural disasters. Does this translate into increased economic damages? To date, empirical assessments of damage trends have been inconclusive. A new study demonstrates a temporal increase in extreme damages, after controlling for a number of factors.

Coronese M., Lamperti F., Keller K., Chiaromonte F., Roventini A., (2019), Evidence for sharp increase in the economic damages of extreme natural disasters, Proceedings of the National Academy of Sciences (PNAS), DOI: 10.1073/pnas.1907826116,

Read the paper here.

Significance Statement

Observations indicate that climate change has driven an increase in the intensity of natural disasters. This, in turn, may drive an increase in economic damages. Whether these trends are real is an open and highly policy-relevant question. Based on decades of data, we provide robust evidence of mounting economic impacts, mostly driven by changes in the right tail of the damage distribution – that is, by major disasters. This points to a growing need for climate risk management.