A connectivity revolution to manage climate risks Business News

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Unhindered access to satellite communication tools can serve as a systemic solution to reduce the economic impact of climate disasters

To say that climate change is the most serious existential threat facing humanity is an understatement. The upward trajectory of the prevalence of climate-related disasters has massively devastated the state of human life, with cities submerged, properties damaged and livelihoods displaced. The devastation caused by a changing climate becomes even more profound when measured in terms of the overall economic impact it has caused, not only due to the massive loss of property, but even more so due to the heavy toll in mortality and human morbidity.

Global increase in natural disasters

(Courtesy of Access Partnership)

Climate change as a systemic risk

The concept of systemic risk relates to the failure of an entire system as opposed to the simple failure of individual parts. In finance, this represents a cascading risk of failure that creates a ripple effect that can lead to the collapse of an entire system. We saw how it played out in the financial crisis of 2008, when a seemingly isolated mortgage bubble led to the biggest recession of our generation.

Similarly, climate change is rapidly becoming a systemic risk that has disastrous ramifications for the state of dominant economic structures as we know them.

Already, the signs are there.

Various models backed by science and data suggest that the economic impact of climate-induced disasters is set to increase significantly over the next decade. Assuming a conservative estimate that the cost of natural disasters continues to grow at its historic rate, the average annual economic impact of natural disasters will double by almost 97%, from $199 billion in 2015-2019 to $390 billion. dollars in 2025-29. . To put things into perspective, this will make climate-related disasters of the same magnitude as the 37and largest economy (according to 2021 IMF figures), corresponding to nearly 0.5% of global GDP.

Economic impact of natural disasters

(Courtesy of Access Partnership)

Again, this is only a conservative estimate. With the continued unpredictability of climate change, economic damage from disasters will increase exponentially. In addition to the directly measurable effects, there are also important social and cultural factors that further compound the impact of climate disasters. These include labor productivity losses and the displacement of families due to environmental migration.

Just as financial systemic risks can cause entire systems to collapse, climate change can trigger growing disruptions in our normal routines that will forever alter the course of human existence.

Harnessing technology to control climate risks

Controlling systemic risks requires synchronized action by all stakeholders likely to be affected. Luckily for humanity, technology is one of the tools that could potentially be harnessed to address this existential threat.

Governments and the private sector have recognized that emerging innovations in communications could be harnessed as an enabler to support adaptability to climate change. An effective deployment of these tools has improved the responsiveness of States to climate emergencies, thus preventing more severe economic losses both in their preparation phase and in their aftermath.

The outcomes that could occur due to differences in adaptation to modern emergency communications tools have been mapped by Access Partnership and its Fair Tech Institute in a white paper they recently released on the role of communications in managing disasters. Therefore, three scenarios emerge:

  • As per usual – this assumes that the status quo remains, with States making no significant changes in their use of existing communication systems.
  • Connectivity gap – this assumes that states take advantage of modern communication tools to respond to emergencies, but the level of development differs from country to country depending on their income levels.
  • Connectivity revolution – this presupposes a generalized adaptation of emergency communication systems in all countries, regardless of income.

Stark differences can result from how these scenarios play out. On the one hand, maintaining the status quo runs the risk of major disruptions to human life, which could further accelerate in the years to come. On the other hand, a utopian word where the connectivity revolution is achieved could result in an estimated US$148 billion reduction in economic damage, including a significant drop in avoidable lives lost and people affected by natural disasters. from 2025 to 2029.

The vision we should be striving for is no clearer than this.

The connectivity revolution as a systemic solution

That climate change is a…

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This notice was published: 2022-04-20 09:51:49

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