Economy is burdened by changes in climate

Heavy snow, a harsh cold wave, extreme heat, typhoons and heavy rains have hit Korea hard this year.

According to a report by Hyundai Research Institute (HRI), the unusual weather is putting a burden on the economy.

The institute called for expanded investments to prepare for the future impact of climate change.

HRI said the damages and losses from climate change have increased - the average death rate per single natural disaster jumped from 7.6 people in the 1990s to 17.5 people in the 2000s.

Also, the average financial cost shot up from 6.3 trillion won ($5.4 billion) in the 1990s to 17.5 trillion won in the current decade, affecting many aspects of the Korean economy.

This is also becoming a global trend; a report by Swiss Re shows that the amount of insurance losses globally related to the climate was $5 billion on average before the 1990s, but the amount jumped eight times to $43.4 billion in 2008.

Although the number of natural disasters in Korea has decreased from 222 events in the 1980s to 36 this decade, the average number of deaths per event has jumped from 12.5 people to 17.5 people, indicating that the scale and strength of natural disasters have become bigger and stronger.

HRI pointed out that commodities, industry, safety and financial costs are becoming increasingly affected by climate change.

For instance, prices for fresh agricultural products shot up, and vegetables were affected the most. In April fresh vegetables prices increased 28.9 percent compared with the same period last year, putting a huge burden on households. Industries also were affected, as various sectors including construction, transportation and distribution all face indirect losses from increased costs.

Safety was another issue. Various diseases increased through the years, including scrub typhus and malaria.

Households were hit with more expenses, such as insurance costs.

“Investments must be increased for drainage systems, roads and buildings,” said Kim Dong-ryeol, a researcher at HRI.

HRI said that the research and development budget for the weather research center this year for Korea is 16.9 billion won ($4.6 million), while the United States and Japan had 354.1 billion won and 39.1 billion won, respectively.

Korea only had two supercomputers for forecasting climate changes, behind 277 in the U.S., 21 in China and 16 in Japan.

By Jung Seung-hyun [seungjung@joongang.co.kr]