Natural disasters cost world a staggering $2.3 trillion annually

The global cost of disasters is growing: The economic burden of disasters is intensifying.

- BY DR. GYAN PATHAK

While the direct costs of disasters averaged USD 70-80billion a year between 1970 and 2000, between 2001and 2020 these annual costs grew significantly to USD 180-200 billion. Now in 2025, total disaster costs are estimated USD 2.3trillion annually when losses to health, education, livelihoods, ecosystems and supply chains are factored in. That is nearly ten times the annual direct losses reported in official figures.

The Global Assessment Report (GAR) 2025 of UN Office for Disaster Risk Reduction (UNDRR) says that the “big five” disasters—earthquakes, floods, storms, droughts and heatwavesaccount for over 95% of direct losses in the past two decades, many of which are preventable.

The report warns the world about more intense future risk and the costliest hazards up to 2050. As for future earthquake risks, it says that cities are projected to add 1.2 billion residents, and 98.4 per cent of them will be in the Global South. They will need resilient infrastructure. Losses from flooding will increase between 5 per cent to 13 per cent. In a high-emission climate change scenario losses from storms and tropical cyclone could increase by 35.6%. There will also be compounding landslide risks. Draughts may affect over three-quarters of the world's population.

The report further warns that over 90% of the land is at risk of becoming degraded by 2050, up from the current 40 per cent. In business-as-usual scenarios an additional 300 million hectares of forests and other natural ecosystems could be destroyed between 2015 and 2050, primarily due to natural land being converted to cropland, with grasslands particularly vulnerable.