Climate change could add around $100 billion to costs of extreme weather

(C) Reuters. Climate change could add around $100 billion to costs of extreme weather

LONDON (Reuters) – Climate change could add around $100 billion, or more than 20%, to the global cost of extreme weather events such as floods, heatwaves and droughts by 2040, research from Cambridge University showed on Wednesday.

The findings come from the university’s Climate Change Business Risk Index, which uses climate modeling data to quantify extreme weather event risks and their potential to disrupt business operations and supply chains globally.

Average direct costs of around $195 billion a year could rise to $234 billion by 2040, the report said, an increase of $39 billion a year at today’s values, with the remainder taken up by indirect costs such as those from supply chain disruption.

Andrew Coburn, chief scientist at the Centre for Risk Studies, said companies were struggling to get to grips with the long-range weather forecasts and how their businesses would be affected by the transition to a low-carbon economy.

“Accurately quantifying this kind of information on business-relevant timescales will help businesses plan for their increased exposure to heatwaves and other climate-related risks,” the researchers said in a statement.