Natural disasters are becoming more frequent and severe due to climate change, posing a major threat to the green economy. The green economy is defined as one that aims to reduce environmental risks and ecological scarcities, while enhancing human well-being and social equity. However, natural disasters can undermine these goals by causing human and economic losses, disrupting ecosystems and infrastructure, and increasing poverty and inequality.

According to a report by the World Meteorological Organization (WMO) and the UN Office for Disaster Risk Reduction (UNDRR), from 1970 to 2019, climate and weather related disasters accounted for 50 per cent of all disasters, 45 per cent of all reported deaths and 74 per cent of all reported economic losses. More than 91 per cent of the deaths occurred in developing countries, where people are more vulnerable to natural hazards and have less capacity to cope and recover.

The report also shows that economic losses have increased sevenfold from the 1970s to the 2010s, going from an average of $49 million to $383 million per day globally. Storms, the most prevalent cause of damage, resulted in the largest economic losses around the world. Three of the costliest 10 disasters, all hurricanes that occurred in 2017, accounted for 35 per cent of total economic disaster losses around the world from 1970 to 2019.

Natural disasters can have negative impacts on the green economy in several ways. First, they can destroy or damage physical assets that are essential for low-carbon and resource-efficient production and consumption, such as renewable energy sources, green buildings, public transport systems, waste management facilities, and natural capital. For example, Hurricane Maria in 2017 wiped out most of Puerto Rico’s power grid, which relied heavily on solar panels and wind turbines.

Second, they can disrupt or reduce the supply and demand of green goods and services, such as organic agriculture, ecotourism, recycling, and environmental consulting. For example, droughts can affect the availability and quality of water and soil for organic farming, while floods can damage crops and infrastructure for ecotourism. Moreover, natural disasters can reduce consumer confidence and spending on green products and services, especially if they are perceived as more expensive or less reliable than conventional alternatives.

Third, they can increase the costs and risks of transitioning to a green economy, both for public and private actors. For example, natural disasters can divert public funds and attention from long-term investments in green infrastructure and policies to short-term relief and recovery efforts. They can also increase the uncertainty and volatility of financial markets and insurance premiums, making it harder for firms and banks to access capital and credit for green projects. Furthermore, they can create social and political instability and resistance to green reforms,
especially if they exacerbate existing inequalities
and grievances.

However,
natural disasters can also create opportunities
for advancing the green economy,
if they are used as a catalyst
for building back better.
For example,
natural disasters can raise awareness
and urgency about the need
to address climate change
and its impacts,
both among policymakers
and the public.
They can also provide a window of opportunity
to redesign
and rebuild infrastructure
and institutions
that are more resilient,
inclusive,
and sustainable.
Moreover,
they can stimulate innovation
and entrepreneurship
in green sectors
that can offer solutions
for disaster risk reduction
and adaptation.

Therefore,
it is crucial
to adopt a proactive
and integrated approach
to managing natural disasters
and promoting the green economy.
This requires enhancing multi-hazard early warning systems
and disaster preparedness;
strengthening disaster risk governance
and financing;
investing in resilient
and low-carbon infrastructure;
supporting green recovery
and reconstruction;
fostering green innovation
and entrepreneurship;
ensuring social protection
and inclusion;
and enhancing international cooperation
and solidarity.

As the President of the World Bank Group David Malpass said: “With commitment from governments,
multilateral lenders like the Bank Group,
and the private sector,
the solutions are achievable”.