Report warns fossil fuel expansion and delayed action are driving escalating losses, with poorer nations facing the harshest impacts despite contributing least to the crisis

Heatwaves, wildfires, droughts and storms cost the global economy more than USD 120 billion in 2025, underscoring the rising financial and human toll of climate change, according to a new report by UK-based non-governmental organisation Christian Aid.

The analysis said extreme weather events intensified across continents this year, with the most expensive disasters concentrated in richer countries where insured losses are higher, even as poorer nations suffered widespread devastation with limited financial protection.

“These disasters are not natural. They are the predictable result of continued fossil fuel expansion and political delay,” said Joanna Haigh, Emeritus Professor at Imperial College London.

Costliest Climate Events
The ten most financially damaging climate events of 2025 each caused losses running into billions of dollars, with combined damages exceeding USD 122 billion, the report said. Most of these figures reflect insured losses alone, suggesting the true economic impact is likely to be significantly higher, while human suffering often remains uncounted.

The United States bore the largest financial burden, with wildfires in California topping the list as the single costliest event, causing an estimated $60 billion in damage and more than 400 deaths.

Cyclones and floods across Southeast Asia ranked second, inflicting USD 25 billion in losses and killing over 1,750 people across Thailand, Indonesia, Sri Lanka, Vietnam and Malaysia. Devastating floods in China followed, displacing thousands, killing at least 30 people and causing USD 11.7 billion in damage.

“No continent was spared from crippling climate disasters in 2025,” the report said, noting that at least one major event struck each of the world’s six populated regions.

Asia Among Worst Hit
Asia accounted for four of the six costliest disasters. Flooding in India and Pakistan killed more than 1,860 people, cost up to USD 6 billion and affected over seven million people in Pakistan alone. Typhoons in the Philippines caused more than $5 billion in damage and displaced around 1.4 million people.

Other severe events included drought in Brazil, summer wildfires in Spain and Portugal, and cyclones that hit Australia and Reunion Island off Africa’s coast earlier in the year.

While the top ten disasters were ranked by financial losses, Christian Aid stressed that some of the most devastating events occurred in poorer countries where insurance coverage is low and data is scarce.

Poor Nations Bear Hidden Costs
Flooding in Nigeria in May and in the Democratic Republic of Congo in April affected thousands of people, with Nigeria alone reporting up to 700 deaths. Prolonged drought in Iran and across West Asia threatened water supplies for around 10 million people in Tehran, raising the prospect of mass evacuation.

The report also highlighted unusually severe events such as record-breaking heat that sparked wildfires in the Scottish Highlands, burning around 47,000 hectares, and Japan’s experience of both extreme snowstorms and record heatwaves in the same year.

Climate-related extremes were also recorded in Antarctica and the world’s oceans, with record sea temperatures and coral bleaching in Western Australia posing major threats to biodiversity.

Call For Urgent Action
Christian Aid said the events of 2025 underline the urgent need to reduce greenhouse gas emissions, accelerate the transition away from fossil fuels and increase funding for climate adaptation in vulnerable regions.

“This year has once again shown the stark reality of climate breakdown,” said Patrick Watt, Chief Executive Officer of Christian Aid. “Violent storms, devastating floods and prolonged droughts are turning lives and livelihoods upside down. The poorest communities are first and worst affected.”

“These climate disasters are a warning of what lies ahead if we do not accelerate the transition away from fossil fuels. They also underline the urgent need for adaptation, particularly in the global South, where resources are stretched and people are especially vulnerable to climate shocks,” he said.