Weather affects business, and “It’s clear that our economy isn’t weatherproof,”. Gosh, who knew?
For some monetary perspective on this issue, please note that Obama’s economic stimulus package was $787 billion (The American Recovery and Reinvestment Act of 2009) and it had little, if any, effect on the economy too.
From the: National Center for Atmospheric Research/University Corporation for Atmospheric Research
Economic cost of weather may total $485 billion in US
BOULDER—Everything has its price, even the weather. New research indicates that routine weather events such as rain and cooler-than-average days can add up to an annual economic impact of as much as $485 billion in the United States.
The study, led by the National Center for Atmospheric Research (NCAR), found that finance, manufacturing, agriculture, and every other sector of the economy is sensitive to changes in the weather. The impacts can be felt in every state.
“It’s clear that our economy isn’t weatherproof,” says NCAR economist Jeffrey Lazo, the lead author. “Even routine changes in the weather can add up to substantial impacts on the U.S. economy.”
This is the first study to apply quantitative economic analysis to estimate the weather sensitivity of the entire U.S. economy. The research could help policymakers determine whether it is worthwhile to invest in enhanced forecasts and other strategies that could better protect economic activity from weather impacts.
The authors caution that the study should be viewed as an initial estimate, which they plan to refine in subsequent research. Lazo and his colleagues did not calculate additional costs associated with extreme weather events, such as this year’s tornado outbreaks, since data on extreme events were not available for the time period covered by their economic model. Nor did they evaluate the possible impacts of climate change, which is expected to lead to more flooding, heat waves, and other costly weather events.
Still, the study concludes that the influence of routine weather variations on the economy is as much as 3.4 percent of U.S. gross domestic product.
The study, with co-authors from the University of Colorado Boulder, Lawrence Berkeley National Laboratory, and Stratus Consulting, is being published in this month’s issue of the Bulletin of the American Meteorological Society. The research was supported by the National Science Foundation, which is NCAR’s sponsor, and by the National Oceanic and Atmospheric Administration.
—–All sectors, all regions—–
Weather can affect both demand and supply of various sectors, with complex and sometimes countervailing influences on the overall economy. A snowstorm, for example, may disrupt air travel and drive up heating costs while boosting subsequent attendance at ski resorts. A prolonged dry spell can affect supplies of crops while enabling construction projects to remain on schedule.
Previous studies looked at weather influences on particular economic sectors or produced subjective estimates of overall weather impacts. In contrast, Lazo and his colleagues combined historical economic data with economic modeling techniques to produce a detailed analysis of the U.S. economy’s sensitivity to temperature and precipitation.
The results indicate that the mining and agriculture sectors are particularly sensitive. Routine variations in weather may take a toll on the mining economy of 14 percent each year, perhaps because of changing demand for oil, gas, and coal. Agriculture ranked second at 12 percent, conceivably because of the many crops that are affected by temperature and precipitation.
Other sensitive sectors include manufacturing (8 percent); finance, insurance, and retail (8 percent); and utilities (7 percent). In contrast, wholesale trade (2 percent); retail trade (2 percent); and services (3 percent) were found to be least sensitive.
The study also concluded that the economy of every state is sensitive to the weather. Although the state-level findings were more subject to error than national findings, the study indicated that New York was most sensitive (a 13.5 percent impact on the gross state product) and Tennessee was least sensitive (2.5 percent). However, sensitivity to weather variation did not seem to follow a particular geographic pattern, and Lazo says more research will be needed to determine why the economies of certain states are more affected by weather variations.
“A key point here is that when aggregated across all 11 sectors, no one part of the country appears significantly more weather sensitive than another region in relative terms,” the authors wrote.
The United States as a whole is less sensitive than individual states because economic production can shift from one region to another, according to the study.
—–Putting the pieces together—–
Lazo and his colleagues drew on 70 years of weather records through 2008 from across the contiguous United States. They focused on variations in temperature (heating-degree days and cooling-degree days that denote temperatures above or below 65 degrees), total precipitation, and deviation from average precipitation. They also studied economic indicators for major economic sectors over 24 years, the period for which detailed state-level data were available and consistent for major economic sectors.
They then conducted a regression analysis, a statistical technique for comparing multiple variables, to examine the impacts of weather on 11 nongovernmental sectors of the economy in every state. The team constructed a computer model in which other key variables—labor, capital, and energy—were held constant based on a five-year average.
The researchers produced the estimated range of $485 billion in potential economic impacts by applying their weather sensitivity findings of 3.4 percent to the 2008 U.S. gross domestic product of $14.4 trillion. As the economy grows, costs of weather variability can be expected to increase accordingly.
The University Corporation for Atmospheric Research manages the National Center for Atmospheric Research under sponsorship by the National Science Foundation. Any opinions, findings and conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the National Science Foundation.
About the article
Title: U.S. Economic Sensitivity to Weather Variability
Authors: Jeffrey Lazo, Megan Lawson, Peter Larsen, and Donald Waldman
Publication: Bulletin of the American Meteorological Society
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That word “impact” is curiously ambiguous. How do you disentangle positive and negative impacts? Or are positive ones out of the question? That would imply that perfection is weatherless. I suppose Heaven is supposed to be weatherless, but it sounds deadly boring to me.
Well, I believe that may be over-simplifying it just a little bit!
(1) Bush himself did not ‘put forward’ anything in the sense that he invented it and drove it through the Congress (like LBJ or FDR).
(2) It was definitely not a ‘stimulus package’ as subsequent money dumps were.
On point (1), what started as the Emergency Economic Stabilization Act appears to have come from Paulson and Wall Street, and Bush is said to have ‘immediately signed on’. Remember that there was a panic on Wall Street and behind the scenes we can guess that the powers that be completely convinced themselves that throwing good money after bad made perfect sense.
The story I remember best is that they met with Bush in an emergency meeting and convinced him that in a matter of days we would witness financial Armageddon. The notion that Bush and his spineless advisors plus the institutionalized socialism in DC would easily fall for this *is* VERY believable. But there was definite pressure to (A) get something quasi-Constitutional quickly to the President, and (B) get him to sign it. Many of us were contacting our reps and the White House urging them *not* to do any such thing. However, as usual, the people were ignored.
There was the prevailing notion that if Bush did nothing that he would kill McCain’s chances! Remember how McCain suspended his so-called campaign to get this done? Stunts like that by McCain and all politicians demonstrate what we are up against. There was practically no-one standing up to block this move, especially the Congress which could easily have over-ridden a veto. As much as I despise country club RINO’s like Bush, I have a hard time pinning this completely on him. I think it was a lot like what happened when his father (‘read my lips’) was snookered into a tax increase by the same phenomenon, institutional momentum.
On point (2), the thing was *not* a stimulus anyway, it evolved into the signed-bill called TARP (‘Troubled Asset Relief Program’), perhaps bailout is the best word. I would simply call it re-supplying the junkie with more drugs. We should have taken the hit then in 2008 painful as it might have been, closed Wall Street for however long it took to calm down, and begin weaning ourselves off the ironically fragile, centralized system that internationalists have built for themselves.
P.S. No argument on “Obama just doubled down on stupid”, except perhaps on the math. President Dumbo is logarithmically stupid. He is riding the Asymptote to infinity.
So, what have we got here?
1. Weather forecasting, a much maligned area of science for it’s lack of precision except over VERY short time periods added to:
2. Climate forecasting, a science so divorced from reality that it has become acceptable to use climate models to prove theory instead of data from…reality…added to:
3. Economic forecasting, the use of statistical models to determine what decisions will have what effects on the economy that retains credibility despite the fact that the most robust economies in the world have the least interference from government, and that the most heavily managed economies through history have been magnificent failures.
and what do they come up with?
“Agriculture ranked second at 12 percent, conceivably because of the many crops that are affected by temperature and precipitation.”
I nearly blacked out from laughing so hard when I got to “conceivably”. When I recovered enough to breath again, I read the whole sentence and got to “the many crops that are affected by temperature and precipitation”.
OMG!
many? Many? MANY?
Do tell! What’s the list of crops that are NOT affected by temperature and precipitation? Are rocks a crop? Oh wait…its just another model, and they can make any reality they want in their models.
So, in their minds, there are crops of rocks.
Knowing that their entire premise is based on the modeling of the rocks in their heads, it all makes so much more sense now…..
The cost of weather and climate has no meaning when the reality is you cam do nothing about what nature throws at you. Live with it and adapt.
All that money Obama has pledged to economic revival has been money wasted. He is acting like our last Prime Minister, Gordon Brown, who wasted billions trying to do we now know to be nothing. What it did do was put the UK into the poor house. Do not let your President do the same with your money. Remember every green job means the loss of 5 real jobs.
Wow, another very expensive glimpse of the flamin’ obvious!
I started my working life labouring on farms. On contract rates. No work, no income. While the weather was reasonably fine, we worked. If it rained too hard or our vehicles couldn’t access a site due to excess mud or snow, we didn’t work. In retrospect, it was a brilliant lesson in how the world works. No output = no income. Simple.
Years later, some social scientists carrying out a survey about ‘job satisfaction’ asked me how much I enjoyed being a teacher. They thought I was slightly odd and had no idea what I meant when I told them
“It’s great – it never rains or snows in my classroom.”
The waste of taxpayer funds is staggering. The federal government is completely out of control. If anyone needs evidence of that fact, here is an example of taxpayers being forced to subsidize “art”: click
MORE NOTABLE IS THE LATTER PART OF THE FORECAST WHERE ANOTHER LATE-
SEASON RAIN EPISODE IS POSSIBLE. THERE IS CONSISTENCY NOW AMONGST
THE MODEL RUNS CONCERNING AN UPPER LEVEL LOW PROGGED TO DROP
SOUTHWARD OFF THE NORTHERN CALIFORNIA COAST BY LATE TUESDAY AND
WEDNESDAY. LATEST RUNS OF THE GFS AND ECMWF STILL BRING A DEEP UPPER
LOW OFF THE COAST BY NEXT TUESDAY NIGHT WITH RAIN CHANCES REACHING
INTO OUR CWA. HAVE ADDED POPS TO THE FORECAST…SLIGHT CHANCE FOR
NOW…WHICH CAN BE ADJUSTED AS IT GETS CLOSER. GIVEN THE DEEPNESS
OF THE LOW CENTER AS WELL AS ITS PROXIMITY…THUNDERSTORMS ARE ALSO
POSSIBLE AND THIS WILL NEED TO BE WATCHED.
======================================================
Ouch. This is bad news. Not only would ag be negatively impacted by a late cold storm like this. Also, if there is thunder, and the storm is short on moisture (a common thing with Yukon storms like this), we may have a redo of the horrible fire storms of June 2009. In that event, the fire smoke was so thick, it lowered temperatures and impacted the wine grape crops due to less light.
Meanwhile in Minot there is no joy.
Apparently, there is still snow melt in the mix in that watershed.