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How Sensitive Are Us Hurricane Damages To Climate? Comment On A Paper By W. D. Nordhaus

Author

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  • LAURENS M. BOUWER

    (Institute for Environmental Studies, Vrije Universiteit Amsterdam, De Boelelaan 1087, 1081 HV Amsterdam, The Netherlands)

  • W. J. WOUTER BOTZEN

    (Institute for Environmental Studies, Vrije Universiteit Amsterdam, De Boelelaan 1087, 1081 HV Amsterdam, The Netherlands)

Abstract

An article by William D. Nordhaus (2010) in this journal examined the economic impacts by hurricanes in the USA, and the potential impacts of climate change on future hurricane damages. His analyses show that hurricane damages normalized over time for changes in GDP have increased significantly since the year 1900, at a rate of about 3.1% per year. Moreover, the results of Nordhaus show that hurricane damages increase with the ninth power of maximum wind speed, which is considerably higher than findings of other studies. We perform similar statistical analyses with different data series of hurricane damage, which are more accurately corrected for changes in exposure of assets over time. Our results do not indicate an upward trend in hurricane losses since 1900, which is in line with earlier studies, and indicates that climate change has not increased hurricane damage in the past. Moreover, although the relation between damage and maximum wind speed appears to be considerably higher than assumed by other studies, this elasticity is more likely to be the eighth-power of maximum wind speed. This finding is relevant since it implies that future climate change impacts on hurricane damage may be considerably lower than Nordhaus indicates.

Suggested Citation

  • Laurens M. Bouwer & W. J. Wouter Botzen, 2011. "How Sensitive Are Us Hurricane Damages To Climate? Comment On A Paper By W. D. Nordhaus," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 1-7.
    • Handle: RePEc:wsi:ccexxx:v:02:y:2011:i:01:n:s2010007811000188
    DOI: 10.1142/S2010007811000188
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    Cited by:

    1. Matthew Ranson & Lisa Tarquinio & Audrey Lew, 2016. "Modeling the Impact of Climate Change on Extreme Weather Losses," NCEE Working Paper Series 201602, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised May 2016.
    2. Young Seok Song & Moo Jong Park, 2019. "Development of Damage Prediction Formula for Natural Disasters Considering Economic Indicators," Sustainability, MDPI, vol. 11(3), pages 1-22, February.
    3. Mr. Sebastian Acevedo Mejia, 2016. "Gone with the Wind: Estimating Hurricane and Climate Change Costs in the Caribbean," IMF Working Papers 2016/199, International Monetary Fund.
    4. Eric Kemp-Benedict & Jonathan Lamontagne & Timothy Laing & Crystal Drakes, 2019. "Climate Impacts on Capital Accumulation in the Small Island State of Barbados," Sustainability, MDPI, vol. 11(11), pages 1-23, June.
    5. TURKEŠ, Renata & SÖRENSEN, Kenneth, 2018. "Case studies and random instances for the problem of pre-positioning emergency supplies," Working Papers 2018004, University of Antwerp, Faculty of Business and Economics.

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