Catastrophic Weather Events Lead to Billions in Global Damages

A drought initially dried out the landscape, eventually giving way to a spark and a strong gust of wind. Before long, extensive regions of South Carolina were engulfed by raging flames.

During the past weekend, the state saw over 100 fire outbreaks — an exceptionally high number, particularly during fire season. Doug Wood, a representative of the state’s Forestry Commission, explained that the combination of dry air, flammable materials, and powerful winds greatly facilitated the rapid advancement of the flames.

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The situation in South Carolina represents a recent significant example of compound weather events, which transpire when two or more simultaneous phenomena result in consequences harsher than any of them would have produced individually. This issue is global in scope, and its increasing occurrence in a warming world signals potential risks ahead.

Recently, Malaysia experienced devastating floods that claimed at least five lives, displacing thousands, disrupting palm oil production, and triggering mudslides throughout the region. Earlier this year, a series of overlapping weather disasters led to historic wildfires in Los Angeles, resulting in 29 fatalities.

Texas, known as the epicenter of extreme weather in the US, has faced a series of compound events in recent years. The catastrophic freeze of 2021, which resulted in at least 200 deaths, is attributed to a series of compounded occurrences. Likewise, last year’s record-breaking Smokehouse Creek Fire originated from a severe drought that significantly impacted the Great Plains in 2023.

As global temperatures rise and the effects of weather fluctuations become more apparent, compound weather events are expected to inflict even greater damage. A study released last year in Nature projected that by mid-century, climate-related damages could cost the global economy approximately $38 trillion (based on 2005 dollar values) annually.

Deborah Brosnan, a climate risk scientist and head of Deborah Brosnan & Associates, noted that the Los Angeles wildfires illustrate the risks associated with concurrent weather events contributing to more significant disasters. The Palisades, Eaton, and other wildfires occurred after California experienced two consecutive wet winters, encouraging extensive vegetation growth. The prior year was one of California’s warmest on record, drying out that vegetation and instigating a rapid drought across the southern part of the state. The drought grew from around 17% coverage in late December to nearly 32% by early January when the fires ignited.

“LA experienced typical wildfires; however, compounded by prolonged drought and elevated temperatures—both associated with climate change—the aftermath was aggravated,” Brosnan pointed out. (Research indicates that climate change has made Los Angeles 35% more prone to burning.)

Excavators deployed by the US Army Corps of Engineers to clear debris from homes damaged by the Eaton Fire in Altadena, California. Image: Kyle Grillot/Bloomberg

Assessing the direct costs associated with cascading events can be complex since damages are often cataloged by individual storms or fires. The wildfires in California have led to losses estimated at $164 billion. In comparison, the financial consequences of the preceding drought remain unaccounted for in US government assessments. Furthermore, the compound effects continue long after the fires are extinguished: The region has also seen heavy rains affecting burn-scarred areas, causing mudslides.

“This exemplifies how all these factors can intertwine to amplify the dangers we face,” stated Lou Gritzo, chief science officer at industrial insurer FM. “And this was merely the result of these weather incidents colliding. One could argue that had any single one of them not occurred, the resulting repercussions would have been considerably less severe.”

A similar occurrence took place in Australia, where a drought from 2017 to 2019 was followed by the 2019-2020 Black Summer Fires, leading to insurance claims upwards of $1.5 billion.

Compound events yield disproportionate effects and are relatively rare, making them difficult to analyze, remarked Doug Richardson, a weather and climate research scientist at the University of New South Wales.

“We need to improve our models to better incorporate these types of interactions among various climate hazards at specific spatial resolutions, which will allow us to understand how these hazards might engage with one another,” he contended, urging for a larger sample size to assess the frequency of potential compound events.

However, not all cascading weather phenomena culminate in fires. Flooding can also arise when rainfall saturates the soil and loosens vegetation, setting the stage for subsequent precipitation to have a more pronounced impact. This was part of the underlying factors of the Malaysian floods, which were also influenced by extreme tidal conditions.

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In Sabah and Sarawak, over 27 inches (70 centimeters) of rain was recorded in January, saturating the soil. Another storm struck just as tidal levels peaked due to the alignment of the sun, Earth, and moon, Nursalleh bin Kasim, principal assistant director of research and technical development at the Malaysian Meteorological Department, explained.

One extreme event can initiate another. For instance, drought strips moisture from the soil. With no excess water available for evaporation, the sun’s energy is redirected towards heating the air. This creates a hotter climate that exacerbates the drought.

“There can be feedback into the atmosphere,” pointed out Ronnie Abolafia-Rosenzweig, a project scientist at the US National Center for Atmospheric Research.

Wider climate implications, such as rising sea levels, increase the risks, combined with vulnerabilities stemming from construction in exposed areas, Brosnan warned. Notably, deforestation raises the likelihood of landslides, while the degradation of mangroves and coral reefs intensifies coastal flooding.

Emergency services aid in evacuating residents from the flooded town of Lewin Brzeski, Poland, in September 2024. Image: Bartek Sadowski/Bloomberg

Events can also display “spatially compounding” effects, affecting multiple regions at once, as explained by Jakob Zscheischler, a researcher in compound events at the Helmholtz Centre for Environmental Research in Germany. He referenced the fall 2024 floods that devastated various parts of Europe, caused by unprecedented rainfall from Storm Boris, which led to at least 29 deaths and significant destruction across countries including Italy, Poland, and Romania. Munich Re estimated that this compound event resulted in damages nearing $4.3 billion, with about half covered by insurance.

“Climate change has already heightened rainfall intensity during such events and will only continue to do so,” warned Zscheischler, noting that this places additional stress on infrastructure and transnational flood management since multiple countries are simultaneously affected.

Brosnan cautioned that fragmented emergency management approaches lead to inadequate responses to complex events with widespread ramifications. However, historical precedents from non-weather disasters may offer valuable lessons as the world adapts to more common compound occurrences.

Bruce Chong, director of climate and sustainability at engineering firm Arup, suggested that Japan’s comprehensive earthquake preparedness culture serves as an effective model. “They recognize earthquakes as a reality,” he observed. “On a daily basis, they are already aware and prepared in various facets, including community task sharing with the government. This has developed into a collective communal challenge.”

© 2025 Bloomberg

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