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Damage Costs of Climate Change through Intensification of Tropical Cyclone Activities: An Application of FUND

Author

Listed:
  • Tol, Richard S. J.

    (Economic and Social Research Institute (ESRI))

  • Narita, Daiju

    (Kiel Institute for the World Economy, Kiel, Germany)

  • Anthoff, David

    (Economic and Social Research Institute (ESRI))

Abstract

Climate change may intensify tropical cyclone activities and amplify their negative economic effects. We simulate the direct economic impact of tropical cyclones enhanced by climate change with the integrated assessment model FUND 3.4. The results show that in the base case, the direct economic damage of tropical cyclones ascribed to the effect of climate change amounts to $19 billion globally (almost the same level as the baseline (current) global damage of tropical cyclones) in the year 2100, while the ratio to world GDP is 0.006%. The US and China account for much of the absolute damage, whereas small island states incur the largest damage if evaluated as the share to GDP. The results also show that they are sensitive to the choice of baseline and of the wind-speed elasticity of storm damage.

Suggested Citation

  • Tol, Richard S. J. & Narita, Daiju & Anthoff, David, 2008. "Damage Costs of Climate Change through Intensification of Tropical Cyclone Activities: An Application of FUND," Papers WP259, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp259
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    References listed on IDEAS

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    7. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    8. Anthoff, David & Hepburn, Cameron & Tol, Richard S.J., 2009. "Equity weighting and the marginal damage costs of climate change," Ecological Economics, Elsevier, vol. 68(3), pages 836-849, January.
    9. Richard Tol, 2002. "Estimates of the Damage Costs of Climate Change. Part 1: Benchmark Estimates," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 47-73, January.
    10. Tol, Richard S. J., 2001. "Equitable cost-benefit analysis of climate change policies," Ecological Economics, Elsevier, vol. 36(1), pages 71-85, January.
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    Cited by:

    1. Elizabeth Kopits & Alex L. Marten & Ann Wolverton, 2013. "Moving Forward with Incorporating "Catastrophic" Climate Change into Policy Analysis," NCEE Working Paper Series 201301, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jan 2013.
    2. Havranek, Tomas & Irsova, Zuzana & Janda, Karel & Zilberman, David, 2015. "Selective reporting and the social cost of carbon," Energy Economics, Elsevier, vol. 51(C), pages 394-406.
    3. Richard S J Tol, 2018. "The Economic Impacts of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 4-25.
    4. Anthoff, David & Rose, Steven & Tol, Richard S. J. & Waldhoff, Stephanie, 2011. "The time evolution of the social cost of carbon: An application of fund," Economics Discussion Papers 2011-44, Kiel Institute for the World Economy (IfW Kiel).
    5. Waldhoff, Stephanie & Anthoff, David & Rose, Steven K. & Tol, Richard S. J., 2014. "The marginal damage costs of different greenhouse gases: An application of FUND," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-33.
    6. Ikefuji, Masako & Horii, Ryo, 2012. "Natural disasters in a two-sector model of endogenous growth," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 784-796.
    7. Matthew Ranson & Carolyn Kousky & Matthias Ruth & Lesley Jantarasami & Allison Crimmins & Lisa Tarquinio, 2014. "Tropical and extratropical cyclone damages under climate change," Climatic Change, Springer, vol. 127(2), pages 227-241, November.
    8. 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.
    9. David Anthoff & Richard Tol, 2013. "The uncertainty about the social cost of carbon: A decomposition analysis using fund," Climatic Change, Springer, vol. 117(3), pages 515-530, April.
    10. Mendelsohn, Robert & Emanuel, Kerry & Chonabayashi, Shun, 2011. "The impact of climate change on hurricane damages in the United States," Policy Research Working Paper Series 5561, The World Bank.
    11. Yohe, Gary W. & Tol, Richard S. J. & Anthoff, David, 2009. "Discounting for Climate Change," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-22.
    12. Scott, Susan & Lyons, Sean & Keane, Claire & McCarthy, Donal & Tol, Richard S. J., 2008. "Fuel Poverty in Ireland: Extent, Affected Groups and Policy Issues," Papers WP262, Economic and Social Research Institute (ESRI).
    13. Ming-Zhu Wang & Marco Amati & Frank Thomalla, 2012. "Understanding the vulnerability of migrants in Shanghai to typhoons," 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. 60(3), pages 1189-1210, February.
    14. Mendelsohn, Robert & Emanuel, Kerry & Chonabayashi, Shun, 2011. "The impact of climate change on global tropical storm damages," Policy Research Working Paper Series 5562, The World Bank.
    15. World Bank & United Nations, 2010. "Natural Hazards, UnNatural Disasters : The Economics of Effective Prevention," World Bank Publications - Books, The World Bank Group, number 2512, December.
    16. Richard Tol, 2013. "The economic impact of climate change in the 20th and 21st centuries," Climatic Change, Springer, vol. 117(4), pages 795-808, April.
    17. Ernest Molua, 2012. "Climate extremes, location vulnerability and private costs of property protection in Southwestern Cameroon," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 17(3), pages 293-310, March.

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    Keywords

    climate change; tropical storms; economic impact;
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