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Thursday, April 18, 2024

Climate perils costing PH economy 3% of its GDP annually, say Swiss economists

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Zurich, Switzerland—The Philippines is the country suffering the highest annual economic losses from the impact of four major weather perils studied—floods, tropical cyclones, winter storms and severe thunderstorms—at three percent of its gross domestic product.

This is according to reinsurance giant Swiss Re, a Zurich-based group, which acts as an insurer for insurers. According to its study published Wednesday, climate perils are already causing the United States annual economic losses of $97 billion, or 0.4 percent of its annual economic output

It reaffirmed that climate change could reduce global economic output by seven to 10 percent by 2050.

“Climate change is leading to more severe weather events, resulting in increasing impact on economies,” said the Swiss Re group’s chief economist Jerome Jean Haegeli.

“Therefore, it becomes even more crucial to take adaptation measures.”

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To understand how insurers can assess risks, the study, based on 2022 data, took stock of the impact of the most frequent natural disasters on the gross domestic product (GDP) of 36 sample countries.

Swiss Re economists took into account the four most frequent and most expensive weather disasters.

By this yardstick, the Philippines is the hardest-hit country, followed by the United States, then Thailand with annual economic losses of 0.36 percent of GDP, Austria (0.25 percent) and China (0.22 percent).

India was seventh on 0.20 percent, with Australia eighth on 0.19 percent and Japan 10th on 0.18 percent.

The assessment provides a broad view of the economic implications if weather perils continue to intensify.

It does not take into account all weather risks, such as heatwaves, with Swiss Re saying it was “difficult to predict” the full impact of climate change.

Globally, the four risks studied represent around $200 billion in economic losses each year.

Swiss Re economists said that while reducing greenhouse gas emissions was essential, it was also imperative to take measures to help stem economic losses.

Such measures could include reviewing building regulations, creating flood defence systems and discouraging building development in areas heavily exposed to climate change.

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