Natural disasters cost $520 billion a year, World Bank says
March 2, 2017 | 1:23 PM
by Bloomberg
File Photo: Somali traders attempt to salvage some of their wares from the burning stalls at the main Bakara market in Somalia's capital Mogadishu. Photo - AFP

Singapore: Global natural disasters cost $520 billion of consumption loss annually, 60 percent larger than asset losses that are commonly reported, the World Bank said in a report.

The estimate is based on the impact of disasters such as floods, windstorms, earthquakes, and tsunamis on people’s well-being, measured by the decline in their consumption, Stephane Hallegatte, one of the authors of the report which was released on Wednesday, said in an email.

"The design of disaster risk management should, then, not rely only on asset losses,” the World Bank said. "Targeting poorer people with disaster risk reduction interventions - such as dikes and drainage systems - would generate lower gains in avoided asset losses but larger gains in well-being.”

Asia Pacific is the world’s most exposed region to natural disasters, accounting for about 40 percent of the global tally, said Hallegatte, who is also senior economist at the lender’s climate change group. The region has high population densities and suffers from relatively high frequency of typhoons, earthquakes and tsunamis such as the one that led to the 2011 meltdown of the Fukushima nuclear reactors, he said.

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