This trend is no one’s friend: The steady increase in damages from extreme weather
By Jerry Hinkle, CCL Economics Policy Network
As described in our latest white paper, the economic costs to the US of climate change are now quite substantial and are likely to grow dramatically as temperatures continue to rise. The paper addresses four key sources of such costs: extreme weather events, sea level rise, adaptation, and slowed economic growth. The trend in the cost of one source, extreme weather, is illuminated here in this blog post.
Though it is challenging to accurately attribute the proportion of the costs stemming from climate change, it is quite clear that the number of costly extreme weather events in the US, and the total costs of those events, has risen dramatically over the last several decades. According to NOAA (1), the number and total damages from these events have risen significantly each decade since the 1980s (see Figure 1 below). Specifically, the average number of events per year costing at least $1 billion increased from 2.7 in the 80s to 11.3 this decade. The average cost rose from $16.4 billion each year to $79.5 billion—both more than four-fold increases. The average increase per decade over this period is 66 percent for the number of events and 70 percent for damages. The average value of the damages is also increasing relative to GDP: it was 0.39 percent in the 1980s and 0.49 percent this decade.
Of course, 2017 was a record year for damages related to extreme weather. There were 16 events costing more than $1 billion (see picture below) for a total preliminary cost of $306.2 billion. For a perspective of this cost, it represents 1.53 percent of US Gross Domestic Product (GDP), and roughly one-third of the net value that the US economy grew by in 2017—a sizable loss!
But hold on—according to scientists, a driving source of the increased extreme weather is climate change driven by rising global temperatures. Given that the temperature rise from pre-industrial times through last decade was 1.0 degrees centigrade, and that the total increase by 2100 is expected to be 3.4 degrees (2) (assuming all commitments to the Paris Climate Accord are met), it is likely these damages will continue to increase dramatically. Thanks to NOAA, in Figure 2 above we can see a more detailed map of what type of events were experienced this past year. Can you imagine a day in the not too distant future when the damages of 2017 are considered a mild year?
In sum, though extreme weather is only one source of such costs, this data makes clear that the cost of inaction on climate change has been significant and is likely to become even greater in the future. To avoid ever increasing weather disasters, we should embrace the effective, common sense climate solutions we know are available to us now.
- NOAA is the National Oceanographic and Atmospheric Administration. This data comes from National Centers for Environmental Information (NCEI, of NOAA).
- See either climateactiontracker.org or climateinteractive.org which uses the MIT model.
Jerry Hinkle is an economist who holds master’s degrees in Economics and Climate Policy.
The Economics Policy Network is a team of CCL leaders and supporters with a diverse background in the field of climate science. These network contributors write regular guest posts, offering thorough insight into topics that fall within their expertise. This post and other resources are available in the form of white papers on CCL Community.