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What are we talking about this week? The real cost of climate change 2023, a report from Kisters looking at the global cost of natural disasters caused by climate change.
Kisters? Kisters is an international environmental data and insights organisation founded in Aachen, Germany, in 1963. It focuses on gathering and reporting data on the water, weather, energy, environment and IT sectors.
What’s the gist of the report? Well, at the rate the UK economy is growing, and with natural disasters caused by climate change on the rise, Kisters have crunched the numbers. Their research found that the rapid rise in frequency and intensity of natural disasters in the UK could make the country bankrupt in 100 years. According to Kisters, the cost of natural disasters in the UK is rising by 11.2 per cent a year, while the UK’s GDP grew by 4.3 per cent in 2022 (according to the Office for National Statistics). Kisters’ report shows that if these trends continue then by 2122 the cost of natural disasters such as floods or storms could match the government’s budget, which obviously currently facilitates spending in healthcare, defence, education and other areas, which are, needless to say, quite important.
Blimey. What specifically will cause this? In the UK, floods are the biggest worry. Between 2010 and 2019, flood damage cost the UK $7.8bn (Kisters uses dollars rather than pounds throughout the report). The report says that due to a particularly alarming growth rate, we could reach a point where they cost the government $41.4bn this decade, the equivalent of building 82 NHS hospitals. Spotlight would point out that this suggests that the cost of building an NHS hospital is around £100m less expensive than it actually is. Kisters calculations put the cost of building a hospital at around $500m or about £400m. But according to NHS Providers the average cost of building a mid-sized hospital is £500m, more than $600m.
So we’re all doomed, then? Not quite. Kisters’ figures don’t account for inflation, or the potential return on investment for the government from improving flood defences or mitigation. The picture the company paints would only be expected to become reality if Whitehall didn’t do anything to improve our resilience against natural disasters over the next 100 years, which – you would hope – is unlikely.
That’s not to say the report isn’t highlighting an important issue. Between 1990 and 2019, the cost of natural disasters in the UK averaged at around $1.4bn a year. And as Kisters reports the annual growth rate was 11.2 per cent a year. Natural disasters becoming more extreme will have big implications, in particular for Britain’s coastal towns and cities, which have long been affected by rising sea levels. Kisters also points out that the trend could lead to the UK’s agricultural and transport sectors being disrupted – with crops rendered non-viable due to unprecedented weather patterns, and extreme weather causing chaos on the roads and rail.
And it’s not just floods? No. Floods are the most expensive risk the UK faces at present, with the cost of dealing with extreme flooding projected to rise to $217.2bn by 2030-2039 without intervention. But an increasing number of extreme storms also poses a threat. Between 2010 and 2019 storms cost the UK around $1.6bn, but by 2030-2039 this is estimated to rise to $3.8bn. In 2020-29, Kisters predicts the UK government will spend $43.8bn on dealing with the effects of all climate-caused natural disasters.
In a sentence? Climate-caused natural disasters in the UK are becoming so severe, and so expensive to deal with, that if current trends continue the government may run out of money responding to floods, storms and other extreme weather events.
If you have a report, briefing paper or a piece of research that you’d like featured in the Research Brief, get in touch at spotlight@newstatesman.co.uk.
[See also: Under Sunak, the UK can't feasibly call for fossil fuel phase out]
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