Climate change and natural disasters increasingly affect people’s well-being and development prospects. While fatalities from climate-related disasters have decreased, thanks to better risk management, economic losses have grown sevenfold globally since the 1970s. Natural disasters push 26 million people into poverty every year, with long-term human capital and welfare impacts.
Climate change and disaster impacts disproportionately affect the poorest and most vulnerable populations, especially in low- and middle-income countries. They may cause 216 million people to migrate in their own country by 2050, and push as many as 132 million people into poverty by 2030. Climate change will affect food prices and food security, health, and labor productivity, and bring more frequent and severe floods, droughts, and storms.
Investing in climate resilience presents an enormous economic opportunity: On average, $1 invested in resilient infrastructure yields $4 of benefits, with total net benefit of $4.2 trillion over the lifetime of new infrastructure assets in low- and middle-income countries. Similar opportunities exist in other sectors, with benefit-cost ratios larger than 4 for early warning systems, and 2–10 in other sectors.
Despite the demonstrable benefits in terms of lives saved and losses avoided, investments in adaptation and resilience are far from adequate. Too much public and private infrastructure is built following outdated standards and not designed to be resilient to current or future risks. New urbanization continues in flood zones. And while some innovation is occurring, it is not reaching those who need it most.