Are Economic Losses from Extreme Weather Events Increasing?

Neumayer and Barthel (2011) investigate the question, "Has economic damage from natural disasters increased over time?" Noting that there is only one study of trends in economic losses at the global level (Miller 2008), which, moreover, used a data base assembled from ad hoc sources which used data of "very varied quality" for the various areas, they did a global analysis using a global database of more uniform quality compiled by the reinsurance company, MunichRe, for 1990-2008. They also undertook separate analyses for developed countries, developing countries, U.S and Canada (as one unit), Western Europe, Latin America and the Caribbean, and South and East Asia.

More specifically, they used two different methods of normalizing economic losses from natural disasters to look for evidence of trends in economic losses from (a) all natural disasters, and (b) all weather-related disasters. They also examined loss trends from convective weather events (i.e., flash floods, hail storms, tempest storms, tornados, and lightning) in the U.S. and Western Europe, and hurricanes in the U.S. and the Caribbean. They also examined temporal trends in the number of disasters in the database.

Results indicated that regardless of which normalization method is used, the researchers found no significant upward trend in normalized economic losses for either all natural disasters or weather related disasters. This was true at the global level, for developed and developing countries, as well as for the specific regions that were examined. Similarly, they found no trends in normalized losses for convective events or hurricanes. Lastly, they report that there is no method of determining whether the lack of trend is due to adaptive measures or due to changes in the intensities of the weather related events.

In considering the above, this paper does not bear out claims that global warming will intensify damages from extreme weather events. It also reaffirms the results of several other studies that have looked at loss trends under a variety of extreme weather events for specific areas/regions, finding that any increasing trend disappears once population and/or increased wealth is accounted for (Barredo 2008, Bouwer 2010, Brook and Doswell 2001, Crompton and McAneney 2008, Downton et al. 2005, Pileke et al. 2008).

Additional References
Miller, S., Muir-Wood, R., Boissonade, A. 2008. An exploration of trends in normalized weather-related catastrophe losses. In: H.F. Diaz and R.J. Murnane, Editors, Climate Extremes and Society, Cambridge University Press, New York.

Barredo, J.I. 2009. Normalised flood losses in Europe: 1970-2006. Natural Hazards and Earth System Sciences 9: 97-104.

Bouwer, L.M., 2010. Have Disaster Losses Increased Due to Anthropogenic Climate Change? Bulletin of the American Meteorological Society.

Brook, H.E., and Doswell, C.A. 2001. Normalized damage from major tornados in the United States: 1890-1999. Weather Forecasting 16: 168-176.

Goklany IM. 2000. Potential consequences of increasing atmospheric CO2 concentration compared to other environmental problems. Technology 7S: 189-213.

Goklany IM. 2007. The Improving State of the World: Why We're Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet. Washington, D.C.: Cato Institute; 2007.

Crompton, R.P., and McAneney, K.J. 2008. Normalised Australian insured losses from meteorological hazards: 1967-2006. Environmental Science and Policy 11: 371-378.

Downton, M.W., Miller, J.Z.B., Pielke, R.A., Jr. 2005. Reanalysis of U.S. National Weather Service Flood Loss Database. Natural Hazards Review 6: 13-22.

Pielke, R.A., Jr., Gratz, J., Landsea, C.W., Collins, D., Saunders, M.A., and Musulin, R. 2008. Normalized Hurricane Damage in the United States: 1900-2005. Natural Hazard Review 9: 29-42.