Unchecked, climate change is estimated to push 132 million people into poverty over the next ten years and could drive 216 million people to migrate within their own countries by 2050, with hotspots of internal migration emerging as soon as 2030. Annual adaptation costs in developing countries are currently estimated at USD 70 billion, increasing to USD 140‑300 billion in 2030 and USD 280‑500 billion in 2050 .
Climate-related hazards put populations and economic assets at risk, and climate change further exacerbates the intensity and occurrence of such events. These impacts may be gradual, such as those associated with the effects of rising temperatures or sea levels, or acute and sporadic through shocks, such as flash floods or forest fires. They can affect the economy or human health and well-being directly, through the loss of life or the destruction of economic assets, and indirectly through the deterioration of the multiple ecosystem services provided by the environment.
Possible impacts include increases in the frequency and intensity of hot temperature extremes, marine heatwaves, heavy precipitation, droughts, intense tropical cyclones and reductions in Arctic sea ice, snow cover and permafrost. Further impacts include wildfires, coastal floods and sea-level rises . The immediate impact is increasing temperature, which has a wide-ranging physiological impact on humans. It can result in premature death and disability, especially in urban areas where populations are disproportionately affected due to the urban heat island effect .
In recent years, the global excess death ratio linked to cold temperatures fell by 0.51%, and hot temperatures increased by 0.21%, providing evidence of the direct impact of climate change on human well-being ). A single heatwave event can result in significant excess mortality , and an increasing number of people are affected. OECD data shows that population exposure to extreme heat has been increasing between 1979 and 2021, potentially exposing 52% of the world population in 1979 and 66% in 2021 to varying duration periods of extreme heat .
Greenhouse gas (GHG) emissions not only affect the global climate, they also lead to other environmental impacts, such as ocean acidification affecting marine ecosystems. Combined with higher temperatures, these forces will dramatically affect the global economy and human welfare. Overall, agricultural yield and food production will be reduced, threatening food security in vulnerable regions . In addition, millions of people could be displaced, and infrastructure destroyed.
These compound effects could substantially negatively affect the global economic outlook and contribute to socio-economic inequality. The World Economic Forum cites one study that shows global annual economic output could be reduced by 4% in 2050 due to climate change and that lower-income and lower‑middle income countries are more likely face GDP losses. The economic losses from natural disasters alone are estimated at USD 280 billion in 2021, representing approximately 0.29% of global GDP .
Although climate change is global, impacts will be unevenly distributed. It is expected that the most acute consequences will be observed in developing countries due to their geographical exposure, greater vulnerability, low income, greater dependence on agriculture and, in general, reduced ability to adapt to new climatic conditions ; .
Due to average and extreme temperature changes, agriculture will be particularly affected, and in consequence indigenous peoples and local communities dependent on agricultural or coastal livelihood ;. In addition, tropical and subtropical agriculture in developing countries is more climate-sensitive than temperate agriculture, meaning that low-income countries and Africa are also particularly affected .
Figure 13 presents the relationship between economic dependence on agriculture and GDP per capita. The relationship highlights how less developed countries will be directly impacted by climate change. It will affect the livelihood of millions of people in developing countries, generating dramatic impacts that will have consequences on migration flows, epidemics and approximately 3.3‑3.6 billion people around the world who live in areas that are highly vulnerable to climate change ..
To track the most significant impacts of climate change, the OECD has developed a new set of indicators centred on IPAC countries to monitor climate-related hazards and exposure to these hazards . The indicator set is based on the Intergovernmental Panel on Climate Change’s (IPCC) conceptualisation of climate risk, which considers climate-related hazard, exposure and vulnerability as the key dimensions of disaster risk (see Box 3).
Source: (IPCC, 2014). A more elaborate version of this figure is available in AR6 Working Group II and detailed descriptions for each dimension are available in .
Better understanding climate-related hazards can inform and support countries’ efforts to mitigate and adapt to climate change. However, despite the growing availability of data from earth observation, there is a lack of readily available indicators at the national and subnational levels to measure climate-related hazards. In response, the OECD is developing internationally comparable indicators for assessing exposure to climate-related hazards , providing evidence that countries are increasingly exposed to climate-related natural hazards but that these exposures vary considerably both across and within countries.
Over the past decades, population exposure to heat stress has increased significantly. This is alarming for at least two reasons: the potential impact this will have on human health and the economic costs involved in dealing with it.
The share of IPAC population exposed to hot summer days has grown every year, with an estimated 17% more people exposed to hot summer days in 2021 compared to 1979 (see Figure 14). Countries whose population was most exposed to heat stress include: Saudi Arabia (90.9%), India (69.7%) and Türkiye (10.3%).
Southern Europe is also significantly affected, with Greece, Italy and Spain experiencing more than 60 days of exposure per year to strong (or worse) heat stress between 2017 and 2021 and these countries are also experiencing more than 10 additional days per year of strong (or worse) heat stress exposure compared to the reference period 1981-2010. The hot European summers are here to stay, with the recent wave in France and England in 2022 highlighting once more the urgency of taking appropriate measures to tackle extreme heat.
Similarly, Indonesia, India and Saudi Arabia are experiencing increasing exposure to heat stress of more than 250 days of strong (or worse) exposure per year. For example, in Saudi Arabia, there have been an additional 11 days per year of strong (or worse) heat stress exposure compared to the reference period 1981-2010. In India alone, heat stress exposure between 2017 and 2021 affected approximately 1.35 billion people, highlighting the serious risks associated with heat stress in certain countries.
Moreover, in 21 countries ‑ of countries covered under IPAC ‑ more than 10% of their populations were exposed to an increasing number of tropical nights over 2017‑21. This included extreme examples, such as India and Saudi Arabia, where more than 95% of its population is being exposed to tropical nights highlighting the urgency to adapt to climate change and increase mitigation efforts.
Increasing temperatures combined with extreme rainfall means countries dependent on agriculture production may be extremely vulnerable. A majority of IPAC countries are experiencing a substantial number of days with extreme precipitation events (compared to the reference period 1981-2010). In 2021, croplands were especially exposed in several western and northern European countries, such as Belgium, Latvia, the Netherlands, Sweden and Switzerland. IPAC countries with the highest share of croplands exposed to extreme precipitation include Indonesia (25.5%), Peru (11.9%) and Colombia (11.1%).
The economy of countries dependent on the agricultural sector is highly vulnerable to extreme precipitation. Six out of ten countries considered most dependent on the agriculture, forestry and fishing sector are also among the most exposed to extreme precipitation of more than one week per year. For example, the GDP share of the agriculture, forestry and fishing sector in Indonesia and Colombia is approximately 13.3% and 7.1%, respectively, highlighting that some countries’ GDP may be more exposed to extreme precipitation events than others (Figure 15). This could lead not only to lower incomes and risks to food security but also to possible dramatic changes in migration flows.
Croplands are also increasingly affected by extreme droughts. Across the IPAC region, there has been a significant decrease in soil moisture on croplands over the last four decades. Countries most affected by agricultural droughts include Argentina and South Africa, which experienced a decline of more than 6% on average in cropland soil moisture in the past five years. (Figure 16).
Drought on croplands also differs widely across regions within countries. There are increasing drought conditions on croplands for almost 70% of OECD large regions, such as the United States and Europe, where cropland soil moisture has been lower in the past five years. In three OECD countries, certain subnational regions recorded a drop in soil moisture of more than 10% on average over the past five years compared to the reference period 1981‑2021, including Chile, Portugal and the United States.
Wildfires are also increasing and concentrating in specific countries and regions, with disastrous results. For example, 20% of global burned land occurred in ten IPAC countries between 2017 and 2021. This poses a problem for those countries and affects global mitigation efforts. Of the ten countries identified, three are high-income economies (Australia, Canada and the United States), six are upper‑middle‑income economies (Argentina, Brazil, China, Colombia, Mexico and South Africa), and one is a lower‑middle-income economy (India), suggesting wide disparities in terms of labour constraints, financing needs, wildfire policy implementation and coping capacity.
On average, approximately 1.2 million square km, which is roughly equivalent to the size of South Africa was burned per year between 2017 and 2021 in the most affected countries -Argentina, Australia, Brazil, Colombia, India, Portugal and South Africa.
Exposure to wildfire is significant and widespread. It risks the destruction of ecosystem services, notably biodiversity and carbon capture, as well as human life. Approximately 10% of the population in India, Mexico and South Africa, and 5‑10% of the population in Chile, Costa Rica and Israel live in areas with a very high wildfire danger. An annual average of 62% of the population in South Africa and 44% of the population in Australia were exposed to very high wildfire danger between 2017 and 2021. India’s population is the most exposed: in 2021 alone, 160 million people were living in areas with a very high wildfire danger (see Figure 17).
Across the IPAC countries, there is an overall increase in forest exposure to very high or extreme wildfire danger (Figure 17). For example, Brazilian forests have around 2 million km2 exposed to wildfire danger over the past five years. Other countries such as the United States, Australia and Mexico also have considerable amounts of forest exposed, with 894 000 km2, 701 000 km2 and 632 000 km2 of forest areas exposed to very high or extreme fire risk, respectively. The high amounts of forest exposure highlight the considerable wildfire risk forests face and should be treated with urgency given the key role forests play in climate change mitigation measures around the world.
Climate change can also cause extreme events such as storms, which not only lead to the loss of human life, but can destroy economic infrastructure, increasing the costs of loss and damage, as well as future replacement and construction. Over the past two decades, built-up area exposure to violent storms remains consistent across the IPAC region (Figure 18). Countries most exposed to violent storms are located principally in northwestern Europe and eastern Asia. Countries such as Belgium, Iceland, Ireland, the Netherlands and the United Kingdom had more than 80% of their population and built-up areas exposed to violent storms in 2020, highlighting the importance of accounting for wind threats as a climate‑related natural hazard (Figure 18).
Meanwhile, exposure to tropical cyclones is limited to a subset of IPAC countries due to their geographic position. The most exposed IPAC countries are Japan, Korea and Mexico, where more than 60% of their populations and built-up areas are exposed to tropical cyclones (with wind speeds higher than 119 km/h or 33 m/s). Japan is the country most exposed to violent storms, with almost 80% of its population exposed to cyclones of Category 3 or higher (with wind speeds higher than 178 km/h).
The recent floods in Pakistan in September 2022 were dramatic. Early estimates suggest that one‑third of the country was under water and at least two-thirds of the country was affected, displacing 33 million people and causing more than 1 200 causalities . These events are a reminder of how river flooding can affect people’s lives directly and cause substantial economic losses by damaging infrastructure, settlements and agricultural lands. Of the 51 IPAC countries under review, the Netherlands and Hungary have around 20% of total land area exposed to extreme river flooding. Meanwhile, 18.6% of China’s built-up area is exposed, followed by Latvia (16.1%), and Croatia (12.7%) (Figure 19). In terms of agricultural land exposure, the most affected IPAC countries are Hungary, the Netherlands, and the Slovak Republic with more than 17% of their cropland exposed to possible extreme events.
River flooding can also cause significant human losses. Among the IPAC countries, populations in Latvia and the Netherlands are the most exposed, with more than 24% of people potentially affected, followed closely by China (21%) and India (17%). These last two countries also experienced the largest increase in population exposure to river flooding, with an additional 3 million and 5.3 million people exposed, respectively, in 2015 compared to 2000.
Low-lying coastal communities face a range of coastal flooding hazards, such as storm surges and erosion. These hazards are expected to increase as climate change increases the frequency and severity of coastal floods. The most exposed countries are the Netherlands, Belgium and Denmark: approximately 51% of the Netherlands land area is potentially exposed to coastal flooding with a ten-year return period, followed by 6.3% for Belgium and 5.6% for Denmark. These figures should, however, be interpreted with caution as they do not account for existing flood protection measures. Nevertheless, they underscore the importance of maintaining existing protections to prevent future exposures.
With respect to the exposure of built-up areas, of the IPAC countries, the Netherlands has 48.1% of its built-up area exposed to coastal flooding, followed by Belgium (7.1%) and China (4.3%). This reflects the fact that much of the land along the North Sea coast is either below sea level or just slightly above it, exposing a sizeable amount of the land and its built-up areas to coastal flooding hazards.
Although there are differences across countries, most experience one or more climate-related hazards with varying degrees of intensity. Moreover, countries are not only vulnerable if they are exposed to a specific hazard, but also how these hazards may be interconnected, reinforcing or undermining one another. Future analysis could investigate the interconnectedness between climate-related hazards to develop a composite indicator that identifies which climate-related hazards are more, or less, impactful for a given country.
Climate-related hazards may be reinforced by others and could exacerbate socio-economic impacts, or alternatively be undermined by adaptation policies. The effects of climate hazards are reflected in how countries are affected by losses and damages associated with climate related events. This assessment is essential for adaptation policies and emergency preparedness.
Countries will face the effects of climate change directly by implementing various mitigation and/or adaptation policies. However, climate change is so pervasive and its impacts so ubiquitous that even those countries that do not respond directly will do so indirectly by implementing actions or policies that are the consequence of the deleterious effects of global warming, such as losses and damages from extreme events.
Between 1970 and 2019, disasters from weather, climate and water extreme events represented 50% of all recorded disasters, 45% of deaths and 74% of related economic losses . The World Meteorological Organization (WMO) reported an almost eightfold increase in average daily economic losses between 1970‑79 and 2010‑19.
In Europe alone, the total economic losses from weather- and climate-related events were estimated at EUR 450‑520 billion (in 2020 euros) in the period 1980 to 2020. Only one-quarter to one-third of these losses were insured. Fatalities during the same period were estimated as high as 145 000, and just 3% of all events were responsible for 60% of economic losses . These estimates underscore the economic impact of natural disasters and the fact that a mere few can have dramatic effects.
The United States’ National Oceanic and Atmospheric Administration (NOAA) recorded 332 separate weather and climate disasters between 1980 and September 2022, where overall damages/costs reached or exceeded USD 1 billion. More than half of them (55%) occurred after 2010. The NOAA estimates that the related total direct costs have exceeded USD 2.278 trillion since 1980, of which USD 1.193 trillion has been insured since 2010.
Natural disasters are estimated to cause around USD 18 billion per year in direct damage to power generation and transport infrastructure in low- and middle-income countries. Additionally, infrastructure service disruptions cost between USD 391 billion and USD 647 billion per year to households and firms in low- and middle-income countries . These costs will only increase in the future, with severe implications for the sustainability of public finances.
In 2018, the droughts, floods and storms in India caused an estimated USD 6.1 billion in damages . When Hurricane Dorian made landfall in the Bahamas in 2019, it caused at least 70 deaths, with losses and damages estimated at one-quarter of the Bahamas’ GDP . The 2019-20 Australia wildfire season resulted in 19 million hectares (ha) of land being burned and at least 33 deaths. The economic impacts were estimated at AUD 20 billion .
Reported economic losses from climate-related events are highly volatile from year to year. However, they have been increasing globally since 2000 -much faster than GDP (see Figure 20).
By March 2021, 126 developing countries were formulating and implementing national adaptation plans (NAPs), with 22 countries having completed the preparation of their first NAP . However, with mounting losses and damages, countries are recognising the need to strengthen the coherence of their approaches to climate change with that of disaster risk reduction . The humanitarian community now considers climate change one of the greatest threats facing communities worldwide.
Heat stress, defined here, is exposed to more than eight weeks of hot days over the period 2017‑21.
Annual population exposure to more than 8 weeks of tropical nights.
Extreme precipitation is defined here as precipitation of more than one week.
Compared to the climate reference period (i.e. 1981-2010).
River flooding events are defined in terms of a 100-year flooding event.