A recent study has unveiled the profound economic toll exacted by the climate crisis through a relentless onslaught of extreme weather events, revealing a shocking cost of $16 million (£13 million) per hour over the last two decades. These calamities, which include storms, floods, heatwaves, and droughts, have claimed numerous lives and laid waste to vast expanses of property. Global heating has made these events more frequent and severe, marking the first time researchers have quantified the escalated costs directly attributed to human-induced global warming.

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The study, which examined the years from 2000 to 2019, found that the annual costs averaged $140 billion (£115 billion), albeit with substantial fluctuations from one year to the next. Recent data has exposed an alarming escalation, with costs soaring to $280 billion in 2022.

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This comprehensive analysis was based on a unique methodology that combined data relating to how global heating exacerbates extreme weather events with economic data on the losses incurred. While the results are already staggering, the researchers caution that they are likely underestimated due to a lack of data, particularly from low-income countries, and the exclusion of additional climate-related costs, such as crop yield declines and sea level rise.

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The profound human impact of these extreme weather events is undeniable. Over two decades, 1.2 billion people have been affected by the climate crisis, with a striking two-thirds of the associated damage costs attributed to lives lost and a third to property and asset destruction. Storms, exemplified by the devastating Hurricane Harvey and Cyclone Nargis, account for a significant two-thirds of climate-related costs, with 16% stemming from heatwaves and 10% from floods and droughts.

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The study's significance extends beyond its numerical findings, as it has practical implications for funding recovery efforts. The researchers suggest that their methods can be utilized to calculate the required financial resources for a loss and damage fund established at the UN's climate summit in 2022, aimed at supporting the recovery from extreme weather disasters in economically disadvantaged nations. Moreover, this approach could facilitate faster disbursement of funds by rapidly determining the precise climate cost of individual disasters.

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Professor Ilan Noy of the Victoria University of Wellington in New Zealand, one of the study's lead authors, emphasized the enormity of the annual cost, asserting that it is already a substantial figure and underlines the potential underestimation of climate change costs in previous quantifications based on computer models. However, Noy emphasized the study's limitations, citing the absence of data for many extreme weather events, including heat wave-related fatalities in sub-Saharan Africa.

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The study's distinctive approach builds on hundreds of "attribution" studies that calculate the increased frequency of extreme weather events due to global heating. This enables researchers to estimate the proportion of damages directly caused by human-induced heating.

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Remarkably, the central estimate of the study reveals an average annual climate cost of $140 billion, ranging from $60 billion to $230 billion. These figures significantly surpass those derived from computer models, which rely on changes in average global temperature and often underestimate the impact of extreme temperatures experienced worldwide.

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The research also identifies specific years with the highest climate costs, including 2003, 2008, and 2010, marked by devastating heatwaves, Cyclone Nargis in Myanmar, and droughts in Somalia and a heatwave in Russia, respectively. Notably, property damages peaked in 2005 and 2017 when hurricanes struck the United States, a nation characterized by high property values.

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This study assumes a statistical value of $7 million for each life lost, an approach used by the US and UK governments, to calculate the economic impact of lives lost. While this valuation may be contentious, it is a common economic practice necessary for decision-making regarding investments.

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Noy emphasizes that focusing solely on infrastructure damage would bias cost estimates in favor of affluent countries, despite extreme weather disproportionately affecting poorer nations. This disparity is evident when contrasting the $140 billion damage estimate with the $100 billion promised by wealthy nations to assist poorer countries, a commitment yet to be fully realized. This discrepancy also stands in contrast to the annual $7 trillion in subsidies enjoyed by the fossil fuel industry.

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At the UN's COP27 climate summit in 2022, participating nations reached an agreement to establish a loss and damage fund intended to aid economically disadvantaged countries in recovering from climate-related disasters. The study's methodology could help determine the fund's required financial resources.

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Ideally, swift attribution studies of extreme weather events could provide rapid estimates of climate-related damages, expediting the distribution of funds and acting as an insurance scheme for affected countries. Additionally, this approach may be valuable for determining damages in climate-related lawsuits.

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In response to the study's findings, Dr. Stéphane Hallegatte, a researcher at the World Bank, underscores the visible increase in global economic losses caused by climate change-related disasters. This study provides a robust and convincing case that climate change's impact is not negligible, emphasizing the need for greater research collaboration with poorer countries.