Human, economic costs of nature disasters underestimated by up to 60% - World Bank

Human, economic costs of nature disasters underestimated by up to 60% - World BankNatural disasters have a more devastating impact on the poor than widely thought, forcing some 26 million people into poverty each year and setting back global spending on goods and services by the equivalent of $520 billion annually, the World Bank said on Monday, Reuters reports.

The human and economic costs of disasters, caused by extreme weather and earthquakes, have been underestimated by up to 60 percent because they ignore the high toll on the consumption and related well-being of the poor, the bank said in a new study.

“Severe climate shocks threaten to roll back decades of progress against poverty,” said World Bank Group President Jim Yong Kim in a statement. "Building resilience to disasters not only makes economic sense, it is a moral imperative.”

Stephane Hallegatte, the lead author of the report, said poor people tend to suffer more from disasters as they often live in places that are hit more often, and lose a bigger share of their income. They also receive less support from governments, friends and family, he added.

The report notes that a flood or earthquake can be disastrous for poor people but have a negligible impact on a country's overall wealth or production if it affects people who own almost nothing and have very low incomes.

But for them, disasters can have damaging long-term effects, such as forcing families to take a child out of school or to spend less on healthcare, it adds.

Among Guatemalan households hit by tropical storm Agatha in 2010, per capita consumption fell 5.5 percent, hiking poverty by 14 percent, according to research cited by the bank.

"Dealing with climate change and natural disasters and resilience is an important component of poverty reduction policy," Hallegatte told the Thomson Reuters Foundation.

If the value of assets threatened by disasters is the main factor in planning how to reduce risks, the majority of support will go to better-off countries and communities, he said.

The aim of the report - produced in response to demand from governments - is to help states balance protecting financial returns with taking care of the poor.

The World Bank plans to use the findings to steer policy discussions with countries on managing risks across the board.

The research could also guide countries on putting into practice their climate change action plans, submitted for the Paris Agreement that took effect on Nov. 4, Hallegatte said.

"If we select priorities based on our measure of the impact of natural disasters on well-being, we will be able to spend not only efficiently but also help the poorest," he said.
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