This blog post summarizes a recent Bank of Korea assessment showing how extreme weather already chips away at national economic performance. It outlines the wider human, ecological, and policy implications.
I explain the Bank’s finding that severe weather reduced third-quarter GDP growth by 0.1% in the 2020s. The sectors most affected, the escalating water-security challenge highlighted by academic research, and practical steps both policymakers and citizens can take to reduce risk are also discussed.
How extreme weather is eroding economic growth
The Bank of Korea warns that floods, hurricanes, heat waves and droughts are not only occurring more frequently, they are amplifying economic losses by disrupting production and increasing costs. These climate-driven shocks translate directly into weaker output, damaged infrastructure and reduced long-term productivity unless mitigation and adaptation measures are scaled up.
Sectoral hits and immediate impacts
On the ground, the effects are tangible: agriculture and fishing have experienced major productivity losses. Construction, forestry and maintenance sectors face stoppages and cost overruns.
Consumer-facing industries such as restaurants see demand fall as prices rise and disposable incomes shrink.
Water stress, public health and ecosystems under strain
Beyond immediate economic figures, extreme events threaten freshwater systems, sewage infrastructure and the natural systems that underpin livelihoods and health. Flooding and seawater intrusion can compromise drinking water and sanitation, creating secondary public-health crises that further burden economies.
Rising water insecurity: global and regional evidence
A study from Utrecht University underscores the scale of the problem: today some 55% of people globally lack reliable access to clean water. Absent strong mitigation, the figure could rise to 66% by 2100—disproportionately affecting regions in the Global South.
For countries like Korea, coastal flooding and saline intrusion already pose real risks to freshwater supplies and agricultural lands.
Ecological signals
Natural systems are sending warning signs: heat waves and droughts blunt seasonal patterns such as autumn foliage in the U.K. and Michigan. This indicates stress across ecosystems that provide services from tourism to pollination.
These ecological changes feed back into economic performance through reduced ecosystem services and increased management costs.
Practical responses: policy, finance and individual action
Decisive action today can reduce the long-term economic toll of climate extremes. While transition and resilience-building cost money, the alternative—unchecked damage to productive capacity and public health—will be far more expensive.
Where to focus effort
Decision-makers must weigh the upfront costs of transition and resilience against the escalating fiscal, human, and ecological losses of inaction.
Here is the source article for this story: Experts issue warning on powerful phenomenon dragging down economy: ‘May exert downward pressure’