As human-induced climate change progresses, the frequency and intensity of extreme weather events is likely to increase, leading to a high probability of increasing direct production losses and consequently to higher consumption losses.
Disruption caused by extreme weather events typically impacts a country's health sector, as well as the economy through disturbances to income, employment, economic growth, energy supply and food security.
In the aftermath of an extreme weather event, regions tend to react in a variety of ways. Some might not manage to recover in between subsequent events, while others might even profit from disasters when the economy is built back to be more resilient or efficient after a shock. On an inter-regional level, local production shocks induced by extreme events can - via price and demand fluctuations in the highly interconnected global trading network - result in losses or gains in production or consumption elsewhere in...