Quantifying indirect economic losses from extreme events to inform global and local adaptation strategies

Abstract

Existing studies on extreme event attribution are typically event-specific, particularly those conducted since the early 2000s. They primarily focus on direct economic losses to people and physical assets while overlooking the broader indirect losses that ripple through supply chains. Here, we combine disaster data with attribution studies and employ a global multi-regional input‒output model to assess both direct and indirect economic losses from droughts, floods, and storms attributable to anthropogenic climate change between 2009 and 2019. Our findings reveal that such extreme events cause 60.32 billion USD in direct economic losses and 65.07 billion USD in indirect economic losses annually—together accounting for about 46% of total losses from all extreme events. Climate adaptation investments are urgently needed in sectors such as manufacturing, agriculture, construction, transportation, and finance, with vulnerable regions concentrated in parts of Asia. International trade and industry linkages amplify the domestic impact of international extreme events, with 17% of China's attributable losses stemming from disasters abroad. This suggests that overseas adaptation could yield domestic resilience benefits. This study underscores the interconnected nature of global economic resilience against climate change and supports the design of equitable, science-based international climate finance mechanisms.