Pressure on economics of climate change and natural disasters

Ōtepoti - Cyclone Gabrielle, the floods in Auckland and other extreme weather events, have again pushed questions on the social and economic costs of such events to the forefront.

If the new weather continues on its current trajectory, the frequency and severity of these events will only increase as the planet gets warmer.

Although floods are our most frequent natural disaster, we are also prone to earthquakes, droughts, volcanoes, landslides, and tsunamis, economic forecaster Berl says.

The number of Kiwis exposed to the risks will also increase as more people move to cities, which are especially vulnerable to such hazards. Aotearoa has a very high risk of exposure to natural disasters

Its exposure to extreme natural events and / or climate change is among the highest in the world, with a very high risk of exposure. Risk is measured by the extent of the population that is exposed and burdened by the impacts of extreme natural events.

This is unsurprising, given that many of our largest cities are prone to flooding, earthquakes, and volcanic activity.

Based on historical seismic activity, there is a high risk of a magnitude six earthquake occurring at least once a year, and a magnitude seven earthquake occurring once every five years.

Despite high risk of exposure to these events in Aotearoa and understanding of the importance of disaster preparedness, in practice New Zealanders tend to be underprepared.

Research has shown that just one in three of us have actively taken steps to prepare ourselves and/or our household. The key barriers to disaster preparedness are cost, lack of information, and the mindset that we will never be part of such an event, with half of us believing so.

While there is not much we can do about natural disasters such as earthquakes, tsunamis, and volcanic eruptions, we can mitigate against the risks of anthropogenic climate change. The impacts of global warming will vary by region, industry, population groups, etc. Primary industries are the bread and butter of the Aotearoa New Zealand economy and our communities.

The primary sector makes up around three-quarters of our goods exports and supports one in 10 jobs. Unfortunately, these industries are also particularly exposed to the negative impacts associated with climate change.

It is important to note that other things which people value, such as cultural heritage assets, environmental assets, and intangible personal losses such as pets, are rarely attributed with a number when calculating the total damage to an affected area.

The number of fatalities and injuries are usually aggregated separately to economic damages. Loss of life and injury have economic consequences to livelihoods, families, and communities.

Direct disaster damage is typically used for insurance purposes, and to budget for government recovery costs. However, indirect damage, or indirect economic loss, is concerned with the wider ripples of loss which are felt much longer after the disaster.