The Cost of The Climate Crisis

There’s a heavy price to the increase in climate disasters. What role does money play in the climate crisis? The answer becomes more complicated by the minute.

In 2022, damages brought on by climate disasters in the United States totalled $165.1 billion. In Pakistan, damages came to approximately $40 billion, Brazil reached $812 million and Ethiopia lost $640 million due to drought conditions. With such substantial amounts spanning across the world, it is only natural to ask where the money is going. A significant amount is going toward healthcare. For example, in Canada, a singular episode of extreme wildfire smoke due to increased wildfires cost $1.28 billion. Another large portion is allocated to infrastructure repair like the $1.74 billion spent after the Japan floods in 2018. However, many costs related to climate crises are overlooked and indirect such as insurance increases, therapy, funerary arrangements, unemployment pay and more.

From medical bills treating smoke inhalation to housing accommodations, with each new climate disaster comes the pressing concern of the varied costs associated with its consequences. As the climate crisis continues to mature, natural disasters are increasing in number and regular climate events such as rainfalls are developing more and more into dangerous climate events. As a result, countries are needing to allocate an ever-expanding amount of funds toward the damages of such events. For example, as explained by the Canadian Climate Institute (ICC), “over the last decade, the average cost of weather-related disasters and catastrophic losses each year has risen to the equivalent 5-6% of annual GDP growth”. 

International officials raised the issue at the COP27 meeting, which resulted in a collaborative policy piloted by the G7 and V20 group called the Global Shield. The project focuses on risk prevention by providing countries with tools, knowledge and support in the face of climate crises. Global Shield is being used to address the concerns of climate-vulnerable countries that are disproportionately exposed to the impacts of natural disasters. On their website, the Canadian Government highlights the financial efforts that will be taken to foster resilience in these countries which includes the protection of the most vulnerable, specifically women and girls. With this initiative, countries that are large contributors to the climate crisis (the agents responsible for the rise in natural disasters) position themselves as benefactors who are empowering those in need. Although financial initiatives are valuable and important to address urgent issues, these countries strategically negate their responsibility in the proliferation of these climate-driven catastrophes. Global Shield is an approach that treats the symptoms of the disease rather than looking to where it originates which allows these countries to continue the environmentally harmful practices that engender the very crises they claim to fight. 

In June 2023, The Global Shield Solutions platform was officially opened, yet little has come from the platform in the months following its initial launch. There is still potential for the future, but in the present, the Global Shield continues to sound collaborative and progressive on paper while failing to enact real change and placing a greater responsibility on climate-vulnerable countries to fortify themselves against problems they had little part in perpetuating. Other attempts at financial compensation in the face of the climate crises are being borne out of smaller alliances between climate-vulnerable countries that are facing the strong impacts of increased natural disasters. Specifically, Bangladesh, Jamaica, Malawi, Nepal, Senegal, Trinidad and Tobago and Tonga and Vanuatu have been discussing the pooling of funds to better respond to specific crises through financial means. Once again, we can see increased initiative on the part of climate-vulnerable countries in response to the ineptitudes of climate change contributors in terms of their inability to cede their destructive attitudes toward the environment. 

By looking at the financial impacts of climate change manifestations in the form of destructive weather events and natural disasters, we can begin to unveil the complex network of socio-political motives, barriers and challenges that surround climate change action. Although there have been countless reiterations about the desire to resolve the climate crisis from environmentally destructive countries, it is often their own interests and desire for comfort that diverge from that goal. As a result, we see a continued increase in cost related to climate crises that still harm the wellbeing of said countries in various ways therefore impacting the mental and physical health of their populations and their landscapes. We also see these same countries placing more and more responsibility upon countries that are subject to crises that they have no control over by supposedly arming them with the tools to become more resistant to said catastrophes.

Money is a powerful tool for change, yet its allocation in terms of the climate crises can reveal how it can be used for good and evil.