Economic Growth Won’t Keep Up With Hurricane Damages

Researchers have concluded that not only will the financial damages from hurricanes increase dramatically by the end of the century, but that the rate of economic growth won’t grow at a level to keep pace with hurricane-caused financial losses.

A new study conducted by the Potsdam Institute for Climate Impact Research analyzing the magnitude of future hurricane losses in relation to economic growth, and showcasing the economic impact in the United States, has found that financial losses per hurricane could triple by the end of the century if climate change is not mitigated somehow, while annual losses could on average rise by a terrifying factor of eight.

However, of maybe most import is the finding that the economic growth of the United States and other nations will not grow at a pace enough to counterbalance the increasing losses caused by increasingly frequent hurricanes.

“So far, historical losses due to tropical cyclones have been found to increase less than linearly with a nation’s affected gross domestic product (GDP),” said Tobias Geiger, of the Potsdam Institute (PIK), and an author of the study.

“However, if you analyze losses with respect to per capita income and population growth separately, this reveals a different picture: Our analysis for the United States shows that high income does not protect against hurricane losses. As the number and intensity of tropical cyclones is projected to increase under unchecked global warming, by the end of the century average hurricane losses with respect to national GDP could triple.”

The researchers used top line weather models which linked a hurricane storm’s wind speed, the exposed population, and per capita GDP to reported losses.

“We used information about historical hurricane tracks for the Eastern United States to identify the connection between the affected population, average per capital income and associated damages,” added Katja Frieler, also of PIK and author of the study. “Finally, we applied this relationship to thousands of potential future hurricane tracks that could affect the Eastern United States until 2100 under different levels of global warming.”

“Some people hope that a growing economy will be able to compensate for the damages caused by climate change — that we can outgrow climate change economically instead of mitigating it. But what if damages grow faster than our economy, what if climate impacts hit faster than we are able to adapt?” Anders Levermann asked, the third author of the study. “We find that this is the case with hurricane damages in the United States, the hope in economic growth as an answer to climate change is ill-founded. While adaptation to unavoidable impacts of global warming is important, climate mitigation remains of vital relevance to prevent or damp still avoidable consequences.”