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The Impact of Socio-economics and Climate Change on Tropical Cyclone Losses in the USA

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  • Silvio Schmidt
  • Claudia Kemfert
  • Peter Höppe

Abstract

Tropical cyclones that make landfall on the coast of the USA are causing increasing economic losses. It is assumed that the losses are largely due to socio-economic developments, i.e. growing wealth and greater settlement of exposed areas. However, it is also thought that the rise in losses is caused by increasing frequency of severe cyclones resulting from climate change. The object of this paper is to investigate how sensitive the losses are to socio-economic changes and climate changes and how these factors have evolved over the last 50 years. We will then draw conclusions about the part the factors concerned play in the observed increase in losses. For analysis purposes, storm loss is depicted as a function of the value of material assets affected by the storm (the capital stock) and storm intensity. The findings show the increase in losses due to socio-economic changes to have been approximately three times greater than that due to climate-induced changes.

Suggested Citation

  • Silvio Schmidt & Claudia Kemfert & Peter Höppe, 2008. "The Impact of Socio-economics and Climate Change on Tropical Cyclone Losses in the USA," Discussion Papers of DIW Berlin 824, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp824
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    References listed on IDEAS

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    1. Kerry Emanuel, 2005. "Increasing destructiveness of tropical cyclones over the past 30 years," Nature, Nature, vol. 436(7051), pages 686-688, August.
    2. Silvio Schmidt & Claudia Kemfert & Peter Höppe, 2008. "Tropical Cyclone Losses in the USA and the Impact of Climate Change: A Trend Analysis Based on a New Dataset," Discussion Papers of DIW Berlin 802, DIW Berlin, German Institute for Economic Research.
    3. Claudia Kemfert, 2005. "The Economic Costs of Climate Change," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 1(2), pages 43-49.
    4. Mary Downton & Roger Pielke, 2005. "How Accurate are Disaster Loss Data? The Case of U.S. Flood Damage," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 35(2), pages 211-228, June.
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    Citations

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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. Alano, Emmanuel & Lee, Minsoo, 2016. "Natural Disaster Shocks and Macroeconomic Growth in Asia: Evidence for Typhoons and Droughts," ADB Economics Working Paper Series 503, Asian Development Bank.
    3. A. Gettelman & D. N. Bresch & C. C. Chen & J. E. Truesdale & J. T. Bacmeister, 2018. "Projections of future tropical cyclone damage with a high-resolution global climate model," Climatic Change, Springer, vol. 146(3), pages 575-585, February.
    4. 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.
    5. Dejian Yu, 2015. "Intuitionistic fuzzy theory based typhoon disaster evaluation in Zhejiang Province, China: a comparative perspective," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 75(3), pages 2559-2576, February.
    6. Yanjun Wang & Shanshan Wen & Xiucang Li & Fischer Thomas & Buda Su & Run Wang & Tong Jiang, 2016. "Spatiotemporal distributions of influential tropical cyclones and associated economic losses in China in 1984–2015," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(3), pages 2009-2030, December.
    7. James M. Done & Debasish PaiMazumder & Erin Towler & Chandra M. Kishtawal, 2018. "Estimating impacts of North Atlantic tropical cyclones using an index of damage potential," Climatic Change, Springer, vol. 146(3), pages 561-573, February.

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    Keywords

    tropical cyclones; climate change; socio-economic impact; storm damage function;
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