Economic Growth Is the Best Climate Insurance Policy

by Marlo Lewis on September 3, 2015

in Blog

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Declining vulnerability to river floods and the global benefits of adaptation” is the cheery title of a study published in Proceedings of the National Academy of Sciences (PNAS) and reviewed this week by Craig Idso on CO2Science.Org. What caught my attention is the study’s rather obvious albeit unstated implications:

  • Richer is safer.
  • Economic growth is the best climate insurance policy.
  • Climate policies that hinder growth would also reduce investments that make our naturally dangerous climate more livable.

The study, by Brenden Jongman of Amsterdam University and five colleagues, examines three factors affecting flood-related deaths and damages around the globe: hazard (the natural frequency and intensity of floods, without human interventions), exposure (the population and assets located in flood-prone areas), and vulnerability (the susceptibility of exposed population and assets to death and damages). The researchers use high-resolution modeling and empirical data to compare changes in hazard and exposure to changes in vulnerability. The metrics for vulnerability are mortality rates (fatalities as a percentage of exposed population) and loss rates (economic damages as a percentage of exposed GDP).

From the abstract:

We find that rising per-capita income coincided with a global decline in vulnerability between 1980 and 2010, which is reflected in decreasing mortality and losses as a share of the people and gross domestic product exposed to inundation. The results also demonstrate that vulnerability levels in low- and high-income countries have been converging, due to a relatively strong trend of vulnerability reduction in developing countries. Finally, we present projections of flood losses and fatalities under 100 individual scenario and model combinations, and three possible global vulnerability scenarios. The projections emphasize that materialized flood risk largely results from human behavior and that future risk increases can be largely contained using effective disaster risk reduction strategies.

India provides a telling example of the power of adaptation to reduce flood-related vulnerability. Two similar tropical cyclones struck eastern India in 1999 (Cyclone 05B) and 2013 (Phailin). “Exposed population was greater in 2013 due to population growth and development in cyclone-prone areas. However, the vulnerability in the region had drastically decreased with the implementation of a disaster management authority; cyclone shelters and early-warning systems ensured that only a small fraction of the population was vulnerable to this event.” As a consequence, “fewer than 50 lives were lost in 2013, whereas the cyclone in 1999 was responsible for more than 10,000 lives lost.”

Why is richer safer? “A higher GDP per capita allows for more investments in DRR [disaster risk-reduction] measures, better building quality, and better communication of both direct and long-term risks.”

More wealth does mean more stuff in harm’s way. Nonetheless, rising GDP reduces flood-related damage rates as well as death rates:

The results clearly show a strong negative relationship between income, on the one hand, and mortality rates and loss rates, on the other, for the period 1990–2010. This confirms earlier findings from statistical analyses of loss databases. . . .average mortality rates of 0.03–0.1% (300–1,000 fatalities per million modeled exposed people) are very common among countries with a GDP per capita of $10,000 (PPP) or less, whereas such high vulnerability is no longer found among richer countries. . . .Also, for losses, there seems to be a vulnerability threshold around $10,000 (PPP). This shows that, whereas absolute losses may be higher for high-income countries, relative losses as a percentage of modeled exposed GDP decrease with rising income.

The “gap” in vulnerability between rich and poor countries is “substantial.” However, the “overall vulnerability to flooding has declined in all world regions over the period 1990–2010,” with 5-year average mortality and loss rates declining “by more than one half in this period.”  Moreover, “the average mortality and loss rates in lower income countries have declined relatively faster than the average rates in higher income countries.” The researchers also find no evidence of a Kuznets Curve relationship whereby economic growth initially increases vulnerability to flood-related damages. Rather, their “results show a general pattern of decreasing vulnerability over time within all income-classified country groups.” From a climate-safety standpoint, rising GDP has no downside.

Two graphs from the study nicely capture the big picture.

Flood mortality risk Jongman et al PNAS 2015






Flood damages risk Jongman et al PNAS 2015





Figure explanation: High-income countries have the lowest mortality and loss rates, and vice versa. In addition, “the vulnerability of people and GDP, respectively, have declined over the past two decades, leading to a relative convergence of vulnerability levels between low- and high-income countries.”


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