Global Economic Damages from Tropical Cyclones – Sins of Omission

Worldwide Tropical cyclones from 1985 to 2005
Tropical Cycle Tracks 1985 to 2005 - Image via Wikipedia

Guest post by Indur M. Goklany

A few days ago I saw a report about a paper in Nature Climate Change on future economic damages from tropical cyclones (or hurricanes, as we Americans call them) by Robert Mendelsohn, Kerry Emanuel and others. Robert is an old acquaintance, excellent economist and, not least, a very courageous guy—courageous because he is one of the few academics willing to consider publicly that moderate global warming may be beneficial. [Bob is an exception to the rule that academic freedom seems to be largely wasted on academics so many of whom seem unable to resist peer pressure and prefer conformity over questioning politically correct “settled science” even if that betrays their lack of understanding of science and the scientific process.] I contacted Robert, and within a few minutes received a copy of the paper, The impact of climate change on global tropical cyclone damage (paywalled)—did I mention that he is also a gentleman!

The abstract states:

One potential impact from greenhouse-gas emissions is increasing damage from extreme events. Here, we quantify how climate change may affect tropical cyclone damage. We find that future increases in income are likely to double tropical cyclone damage even without climate change. Climate change is predicted to increase the frequency of high-intensity storms in selected ocean basins depending on the climate model. Climate change doubles economic damage, but the result depends on the parameters of the damage function. Almost all of the tropical cyclone damage from climate change tends to be concentrated in North America, East Asia and the Caribbean–Central American region. This paper provides a framework to combine atmospheric science and economics, but some effects are not yet modelled, including sea-level rise and adaptation.

The accompanying press release from the Yale School of Forestry & Environmental Studies, where Robert is professor, titled, Tropical Cyclones to Cause Greater Damage. This indicates that:

  • Tropical cyclones today cause $26 billion in global damages, which is 0.04% of gross world product. [COMMENT: The press release erroneously has this as 4%. No matter.]
  • By 2100, because of higher population and economic growth, global damages will double to $56 billion by 2100 if the present climate remains stable.
  • Climate change is predicted to add another $53 billion of damages. The damage caused by climate change is equal to 0.01 percent of GDP in 2100.”

UPI picked this up, and ran this brief story (shown in its entirety) under the headline Rise in damage from cyclones forecast :

NEW HAVEN, Conn., Feb. 1 (UPI) — Tropical cyclones will cause $109 billion in damages by 2100 because of vulnerability from population and economic growth. U.S. scientists say.

Researchers at Yale University say greater vulnerability to cyclones is expected to increase global tropical damage to more than double the current yearly average.

More intense storms will become more frequent with climate change, researchers said.

“The biggest storms cause most of the damage,” Robert Mendelsohn, the lead economist on the Yale project, said. “With the present climate, almost 93 percent of tropical cyclone damage is caused by only 10 percent of the storms.

“Warming will increase the frequency of these high-intensity storms at least in the North Pacific and North Atlantic Ocean basins, causing most of the increase in damage.”

The study’s estimates are based on a future global population of 9 billion and an annual increase of approximately 3 percent in gross world product until 2100, the researchers said.

“More people making a lot more income will put more capital in harm’s way,” Mendelsohn said in a release Wednesday.

What the abstract and the PR release did not emphasize, and the UPI missed totally is that with or without any climate change the global damages from the present to 2100 will decline, from 0.04% of global GDP to 0.02% of GDP!

The paper also tells us that if future global economic product increases by 20% (from $550 trillion to $660 trillion) in 2100, then cyclone/hurricane damages will increase by 7% (from $109 billion to $117 billion, I assume, rather than from $53 billion to $57 billion — the paper is not clear about which base should be used here). Regardless of which base should be used, greater economic growth would more than make up for losses from cyclone damages (by a factor of over 14,000-to-1).

This is consistent with the conclusion that a richer-but-warmer world is better off than a poorer-but-cooler world. See here, here and here.

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Mike McMillan
February 3, 2012 2:07 am

So the obvious solution to increased economic damage is to retard economic growth, which the current regime has accomplished beyond belief.. Talk about serendipity.
I also note that with his election, Mr Obama stated “this was the moment when the rise of the oceans began to slow…”
Whoda thunkit?

Gilbert K. Arnold
February 3, 2012 2:52 am

Common sense should tell you that more people, with more money to spend will spend it to live in places that are likely to have the probablility of damage from hurricanes and other “extreme” weather events. As Dr. Goklany points out in one of his references, “fucused adaptation” has the potential to ameliorate the probable damages. Having better nutrition, clean drinking water, and access to abundant afforable energy will do much greater good than forcing the developed countries to destroy their economies so the lesser developed countries catch up with us. Put another way. A rising tide lifts all boats equally.

Mike the convict
February 3, 2012 3:06 am

Am I the only one who feels totally ripped of with the lack of CAGW based naural disasters?
I mean OK so I can’t water ski to the North Pole yet, or maybe ever, polar bears are not drowning in droves so any Welcome Mat from polar bears skins haven’t eventuated, sea levels are only rising in the lowest parts of the oceans for some unfathomable reason. But what really gets my goat is that I have been completely ripped off as to a complete and utter lack of increase in Cyclones in Australia and in particular north Queensland.
Our very own Commonwealth of Australia Bureau of Meteorology (BoM) states that we average 12 a year. Meh we haven’t had 12 this year nor last year nor the year before that so where have my cyclones gone? (Cyclone season in Australia is roughly december to April).
Yes we had 1 big one last year which according to the poor insurance companies has bankrupted them severely but apart from that nada. Not a zot.
I demand my weekly cyclones or I want a refund of my insurance policy increases.
I blame Al Gore. He must be storing them up for a um warm day or something.

Brian H
February 3, 2012 3:13 am

No, no, no! You don’t understand. To avoid damage increase from rising GDP, growth must be throttled to prevent higher losses!
See? It’s all very simple when viewed correctly.

Rogelio Escobar
February 3, 2012 3:23 am

OT but I can see the Australian warmists being involved with this scam
Put somewhere else if not appropriate thanks

Don Keiller
February 3, 2012 3:36 am

xChris Huhne (ex) Minister for Energy and Climate Change in the UK has been charged with “perverting the course of justice” and has resigned his position.
If convicted he will do jail-time.
Huhne is the person mainly responsible for plastering the landscape and sea in and around the UK with near-useless windmills.
It has costed every taxpayer some £200/year in increased energy costs and the number of UK citizens in “Fuel Poverty” has doubled on his watch.
Huhne and his obsessive policies have undoubtedly resulted in people in the UK dying of hypothermia.
What is it with “Green” politicians and scandal?
Maybe you have to be “economical with the truth” when trying to sell a scam.

Chris Wright
February 3, 2012 4:09 am

Don Keiller says:
February 3, 2012 at 3:36 am
“xChris Huhne (ex) Minister for Energy and Climate Change in the UK has been charged with “perverting the course of justice” and has resigned his position.”
That’s welcome news. The charge of perverting the course of justice is a very serious one and actually carries a theoretical life sentence. Of course that won’t happen, but it is likely that, if found guilty, he will end up behind bars. Well, fingers crossed.
I agree – it is certainly possible that old people on very small incomes may have died as a fairly direct result of his criminal policies.
Sadly, Huhne will probably never be charged for his greatest crime. He’ll also probably be replaced by another Lib Dem climate change fanatic.
Meanwhile, today in the UK it’s freezing cold and half an hour ago all those thousands of useless monstrosities were putting out just 0.7 percent of total consumption.
As an aside, the first time I heard Huhne’s name was quite a few years ago, when he was quoted as saying that he thought the ERM was working rather well. It’s not just in climate science that many people devote entire careers to being wrong!

February 3, 2012 4:15 am

Chimps throwing darts or experts predicting the future — same thing.

February 3, 2012 4:58 am

Don’t get too excited. Who ever they get to replace Huhne will be just as bad as him. There will be no difference if he goes down (which he won’t as it’s only council tax or bbc tax avoiders who do jail time here).

February 3, 2012 5:09 am

any news from our madagascar/african friends ?

Don Keiller
February 3, 2012 6:08 am

Mailman, the excitement is in the fact that a rabid proponent of the climate change and “green” energy scam will no longer be able to aggressively drive these insane policies forward.
Huhne supporters (believe it or not there are some!) say the loss of Huhne’s “intellect” is a blow to the Government.
I beg to differ. If he was half as clever as he thought he was, he wouldn’t have got himself into this mess in the first place.
Like many arrogant narcissists in positions of power, he let his gonads do the thinking.

February 3, 2012 6:40 am

According to the NOAA’s assessment the Atlantic hurricane activity is directly related to the Equatorial Atlantic’s SST; neither of which is predictable.
However that not may be the case.
Comparing the NOAA’s Atlantic Accumulated Cyclone Energy (ACE) index with the ‘Atlantic Hurricane probability index’ based on the North Atlantic historical data (also available from the NOAA) it could be concluded that the hurricane activity will (on average) stay just above the normal for at least a decade.
curryja | January 30, 2012 at 6:29 am
I have a draft post on decadal scale hurricane projections, I’ll post this in april or so when people are starting to think about hurricanes. I agree with Vukcevic’s prediction

February 3, 2012 11:54 am

I’ve never understood their reasoning for why they expect an increase in hurricane activity due to warming. They claim that the polls will warm faster than the tropics. So wouldn’t that reduce the temperature differential between the polls and the tropics and thus reduce the amount of hurricane activity? What am I missing?

Alan Watt
February 3, 2012 12:43 pm

I absolutely agree we should take some actions soon to control losses due to cyclones/hurricanes. I can think of several things that will have a greater impact, sooner, and at much lower cost than trying to reduce CO2 emissions:
1) Eliminate the US federally-subsidized flood insurance, which encourages people to build in areas known to flood periodically.
2) Enact building code changes to make structures more wind-resistant. US residential structures have actually become weaker as a result of adopting pneumatic framing nailers — it’s the fasteners which fail rather than the materials. A civil engineer (Ed Sutt) developed “hurriquake” nails (see here) which work in current pneumatic nailers and vastly improve fastener performance. For about $150 increased cost per new house (less than the incremental cost for low-flow toilets) the structures are much stronger against wind damage. Doesn’t help existing structures, but you have to start somewhere.
3) Continue to develop better detection, prediction and warning systems. This may not help reduce structure losses, but will reduce loss of life.
4) Continue to grow the economy so more people can afford insurance, and there are more insurers to share the risk.
Whether severe weather has a long-term up trend, down trend, or level trend, it is highly variable year to year. It is always a risk. Thanks to satellites and other monitoring tools, loss of life in the US from severe weather has declined significantly. That economic losses are increasing is due simply to growth: more people and costly structures in the path. If we’d build less in obviously high risk areas and build better elsewhere, that would go a long way towards restraining loss increases. And if we keep growing the economy, the inevitable losses will be more affordable.

common sense
February 3, 2012 12:48 pm

They’ve made great strides in forecasting paths, but I will only care when they can predict the storms before actual formation, not just before it reaches cyclone classifications.

February 3, 2012 1:43 pm

After a decade of rapidly falling dam levels and a Bureaucracy filled by alarmists predicting our dams will never fill again so we need a “water grid” and desalination no wonder the authorities were reluctant to release precious water when the dams reached storage capacity.
After all flood storage capacity was 200% and levels were 100% leading into the wet period.
And, famous forecaster’s had their reputations ruined before – notably a dry summer in 1974 forecast and all Brisbane ewsidents know how that one played out.
If there is any credible evidence the BOM in Aus. gave a “clear and present danger” warning then the dam engineers are at fault – my recollection – it may be faulty – is that the BOM did not issue such a warning.
On the other hand the flooding elsewhere in Queensland ought to have been a warning.
The main message I get from all this is weather can vary AND the alarmists were completely wrong with their predictions – THEY predicted endless drought.

February 3, 2012 7:57 pm

Brian H says: “No, no, no! You don’t understand. To avoid damage increase from rising GDP, growth must be throttled to prevent higher losses! See? It’s all very simple when viewed correctly.”
You theory makes sense. But then, compared to AGW fanatics, anything makes sense.

Tom Harley
February 3, 2012 11:49 pm

Reblogged this on pindanpost.

February 4, 2012 12:16 am

Quoting Mendelsohn in the press release: “Warming will increase the frequency of these high-intensity storms at least in the North Pacific and North Atlantic Ocean basins, causing most of the increase in damage.”
With all due respect to Dr. Mendelsohn (an economist), and without questioning his economic findings, warming decreases tropical cyclone energy. Cyclone energy results from interaction of cold and warm air — the greater the disparity the greater the energy. A warmed world would have LESS disparity, LESS contrast in air mass temperatures, and hence weaker cyclones.
Warmer is better in so many ways.

February 4, 2012 3:52 pm

Lol. It’s actually not 9 billion, it’s 8 billion. Off by a billion~

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