Future economic damage from tropical cyclones: sensitivities to societal and climate changes

Roger A Pielke

Abstract

This paper examines future economic damages from tropical cyclones under a range of assumptions about societal change, climate change and the relationship of climate change to damage in 2050. It finds in all cases that efforts to reduce vulnerability to losses, often called climate adaptation, have far greater potential effectiveness to reduce damage related to tropical cyclones than efforts to modulate the behaviour of storms through greenhouse gas emissions reduction policies, typically called climate mitigation and achieved through energy policies. The paper urges caution in using economic losses of tropical cyclones as justification for action on energy policies when far more potentially effective options are available.

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Footnotes

  • One contribution of 9 to a Theme Issue ‘Climate change and urban areas’.

  • Tropical cyclone is the more general name for hurricane, which refers to tropical cyclones that occur in the North Atlantic and eastern Pacific.

  • Our 2000 paper replied on the IPCC SRES estimates. The IPCC has since that time released an update (Nakicenovic et al. 2000).

  • These assumptions do not include the effects of inflation. All dollars presented in this paper are expressed in 2006 values.

  • The IPCC SRES exercise estimates increases in per capita GDP to 2050 range from about 0.5% yr−1 to close to 4% yr−1, see fig. 3.10 at http://www.grida.no/climate/ipcc/emission/058.htm. The value of 2.5% is chosen so as to be within this range. On projected population growth see: http://www.census.gov/ipc/www/worldpop.html.

  • Thanks to Joel Gratz for these calculations.

  • http://www.insurancejournal.com/news/national/2006/04/18/67389.htm.

  • The scientists that I contacted for the informal elicitation were: Chris Landsea, Tom Knutson, Kerry Emanuel, Peter Webster, Johnny Chan, Greg Holland, Judy Curry, Kevin Trenberth, Gerry Bell, and Robert Tuleya. I also shared an early draft of this analysis with these scientists providing a chance to comment in advance of submission.

  • Note that the effect of a 20% increase in frequency will have about the same effect as about a 1.7% increase in intensity (using damage function proportional to the 6th power of the change in windspeed) or about a 2.7% increase in intensity (using a cubic damage function). So the independent effects of frequency changes at the 20% level on damages fall within the bounds of the analysis below for 2050 focused on intensity change in any case.

  • Thanks to Joel Gratz for this calculation.

  • I am grateful to William Nordhaus for a useful exchange on the issue of damage functions.

  • Of course, the real climate system does not work this way, and the effects of mitigation on hurricane behaviour remain poorly understood, but they are certainly less direct than the oversimplification offered here.

  • For example, a 2005 study by the Association of British Insurers (http://www.abi.org.uk/Display/File/Child/552/Financial_Risks_of_Climate_Change.pdf) reported that an increase in future losses from tropical cyclones could be mitigated via energy policies, but their analysis did not factor in societal changes. When such changes are considered, reducing vulnerability is up to 52 times more effective than energy policies, qualitatively identical to the results reported here. For discussion see: Pielke (in press).

  • http://www.axa.com/lib/axa/uploads/cpsocietes/2006/United_nations_PR_20060306.pdf.

  • http://www.proventionconsortium.org/themes/default/pdfs/microfin_guidebook.pdf.

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