The USA suffers the
world’s greatest economic loss because of natural disasters
(mainly hurricanes): on average annually 18 billion USD between 1980
and 2008. Four major coastal urban areas are particularly vulnerable:
Miami, New Orleans, Houston, and Tampa. With a unique confluence of
geography, expansive lowlands (particularly in the New Orleans area),
wetland loss, deforestation, rapid development, large populations of
the poor, and a heavy concentration of industry, the Gulf Coast is
extremely vulnerable to hurricanes. In addition to more than 1800
lives, Katrina cost the Gulf Coast area
at least $125 billion in economic damage and could cost the insurance
industry up to $60 billion in claims.
While absolute damage costs tends to be
greatest in developed economies. However, when losses are considered as
a percentage of GDP, developing nations are most at risk, particularly
Small Island Developing States. In the top 10 of countries most at risk
figure 3 small Caribbean counties: Haiti, Antigua and Honduras.
In the Caribbean, major population centres,
agricultural areas, ports, and centres of industrial and commercial
activity are mostly located in the coastal zone. And tourism—a mainstay
of many economies—is also largely concentrated in coastal areas.
Risk to infrastructure on the ground, and
therefore overall attractiveness to investment, is particularly
high in Small
Island Developing States (SIDS), which tend to
combine high exposure to natural hazards, especially tropical storms,
with high vulnerability, particularly in coastal regions where business
activity (tourism, fishing, logistics etc.) is most concentrated.
The biggest reason for increased loss of
life and property in coastal regions is population growth and
increasing development in coastal areas. As growth and development
continue, the damages caused by severe weather will increase regardless
of global warming. It stands to reason that climate
change, namely sea level rise and increases in tropical
storm activity, would exacerbate the damage
as global warming continues.
Many insurance companies have concluded that
these economic losses will increase, due to the combined risks of
climate change and the rapid expansion of urban areas.