Floods, storms and water risk to cost economy trillions by 2050
The global economy could lose trillions of dollars in the coming 30 years, due to escalating crises relating to water distribution. The UK alone could take a GDP loss of more than $150 billion in that same timeframe.
In the last 24 months, the UK’s water companies have continued to make headlines for the damaging discharge of raw sewage into the country’s waterways. Water companies pumped sewage into English rivers nearly 375,000 times in 2021, according to figures published by the Environment Agency. This was a slim decline on the catastrophic year before, which saw Southern Water, for example, fined £90 million for widespread pollution after pleading guilty to more than 6,000 unpermitted sewage discharges. However, the policy is still leaving British beaches inundated with sewage.
As it struggles to address this, though, the UK is also set to face another kind of water crisis altogether. Consulting firm GHD has calculated that by 2050, the UK will have lost $153 billion – an annual GDP decline of 0.1% – to floods, storms and droughts. This is without taking into account the additional damage that polluting the country’s remaining water amid a drought might cause, or additional health hazards floods will present when the rising water is filled with sewage.
The UK is one of seven countries GHD evaluated, all of which faced multi-billion GDP losses to water crises in the next 30 years. The countries facing the biggest impacts were the United States, and the Philippines.
The US could lose some $3.7 trillion in GDP, or 0.5% per year – with numerous cities like Las Vegas and LA having been built and expanded in the middle of deserts, while many more south-eastern coast hubs face uncertain futures, having already been exposed as vulnerable to flooding in hurricane season.
In the Philippines, meanwhile, global warming is placing ever-greater pressures on coastlines already prone to flooding due to subsidence. The country’s capital, Manila is among the fastest sinking cities on the planet, with some areas subsiding up to 1.5 centimetres per year. By 2050, this kind of pressure could wipe $124 billion from the country’s GDP – or 0.7% per year – making it the hardest hit economy proportional to its size.
Overall, water problems are forecast to cost the world economy many trillions in the lead up to 2050. The bill for just seven countries is already expected to hit $5.6 trillion.
The firm’s researchers noted, “As climate change will lead to more intense rainfall, floods and droughts in the coming decades, these costs will continue to rise.”
