Green Employment and the Green Economy

Tuesday, June 9, 2009

Earth Policy News - A Warming World Means More Destructive Storms

Earth Policy Institute
Plan B 3.0 Book Byte
June 9, 2009


Lester R. Brown

Elevated global temperatures bring a number of threats, including rising
seas and more crop-withering heat waves. Higher surface water temperatures
in the tropical oceans also provide more energy to drive tropical storm
systems, leading to more-destructive hurricanes and typhoons. The
combination of rising seas, more powerful storms, and stronger storm surges
can be devastating.

Just how devastating this combination can be became evident in late August
2005, when Hurricane Katrina came onshore on the U.S. Gulf Coast near New
Orleans. In some Gulf Coast towns, Katrina's powerful 28-foot-high storm
surge did not leave a single structure standing. New Orleans survived the
initial hit but was flooded when the inland levees were breached and water
covered everything in large parts of the city except for the rooftops, where
thousands of people were stranded. Even in August 2006, a year after the
storm had passed, the most damaged areas of the city remained without water,
power, sewage disposal, garbage collection, or telecommunications.

With advance warning of the storm and official urging to evacuate coastal
areas, 1 million or so evacuees fled northward into Louisiana or to
neighboring states of Texas and Arkansas. Of this total, more than 200,000
have not yet returned home and will likely never do so. These storm evacuees
are the world's first large wave of climate refugees.

Katrina was the most financially destructive hurricane ever to make landfall
anywhere. It was one of eight hurricanes that hit the southeastern United
States in 2004 and 2005. As a result of the unprecedented damage, insurance
premiums have doubled, tripled, and even in some especially vulnerable
situations gone up 10-fold. This enormous jump in insurance costs is
lowering coastal real estate values and driving people and businesses out of
highly exposed states like Florida.

The devastation caused by Katrina was not an isolated incident. In the fall
of 1998, Hurricane Mitch--one of the most powerful storms ever to come out
of the Atlantic, with winds approaching 200 miles per hour--hit the east
coast of Central America. As atmospheric conditions stalled the normal
northward progression of the storm, some 2 meters of rain were dumped on
parts of Honduras and Nicaragua within a few days. The deluge collapsed
homes, factories, and schools, leaving them in ruins. It destroyed roads and
bridges. Seventy percent of the crops and much of the topsoil in Honduras
were washed away--topsoil that had accumulated over long stretches of
geological time. Huge mudslides destroyed villages, burying some local

The storm left 11,000 dead. Thousands more, buried or washed out to sea,
were never found. The basic infrastructure--the roads and bridges in
Honduras and Nicaragua--was largely destroyed. President Flores of Honduras
summed it up this way: "Overall, what was destroyed over several days took
us 50 years to build." The damage from this storm, exceeding the annual
gross domestic product of the two countries, set their economic development
back by 20 years.

In 2004, Japan experienced a record 10 typhoons (hurricanes) that
collectively caused $10 billion worth of losses. During the same season,
Florida was hit by 4 of the 10 most costly hurricanes in U.S. history. These
4 hurricanes together generated insurance claims of $22 billion.

Against this backdrop, insurance companies and reinsurance companies are
finding it difficult to calculate a safe level of premiums, since the
historical record traditionally used to calculate insurance fees is no
longer a guide to the future. For example, the number of major flood
disasters worldwide has grown over the last several decades, increasing from
6 major floods in the 1950s to 26 in the 1990s.

Insurers are convinced that with higher temperatures and more energy driving
storm systems, future losses will be even greater. They are concerned about
whether the industry can remain solvent under this onslaught of growing
damages. So, too, is Moody's Investors Service, which has several times
downgraded the creditworthiness of some of the world's leading reinsurance
companies over the last six years.

Thomas Loster, a climate expert at Munich Re, a leading re-insurance
company, says the overall balance of natural catastrophes is now "dominated
by weather-related disasters, many of them exceptional and extreme. We need
to stop this dangerous experiment humankind is conducting on the Earth's

Munich Re has published a list of natural disasters with insured losses of
$1 billion or more. The first one came in 1983, when Hurricane Alicia struck
the United States, racking up $1.5 billion in insured losses. Of the 58
natural catastrophes with $1 billion or more of insured losses recorded
through the end of 2006, 3 were earthquakes, including the devastating 2004
earthquake-related Asian tsunami; the other 55 were weather-related--storms,
floods, hurricanes, or wildfires. During the 1980s, there were 3 such
events; during the 1990s, there were 26; and between 2000 and 2006 alone
there were 26.

Prior to Hurricane Katrina, the two largest events in terms of total damage
were Hurricane Andrew in 1992, which took down 60,000 homes and racked up
$30 billion worth of damage, and the flooding of China's Yangtze River basin
in 1998, which also cost an estimated $30 billion, a sum comparable to the
value of China's rice harvest. Part of the growing damage toll is due to
greater urban and industrial development in coastal areas and river
floodplains. But part is due to more-destructive storms.

In the West, the regions most vulnerable to more powerful storms currently
are the Atlantic and Gulf Coasts of the United States and the Caribbean
countries. In the East, it is East and Southeast Asia, including China,
Japan, the Philippines, Taiwan, and Viet Nam, that are likely to bear the
brunt of the powerful storms crossing the Pacific. In the Bay of Bengal,
Bangladesh and the east coast of India are particularly vulnerable.

Western Europe, traditionally experiencing a heavily damaging winter storm
perhaps once in a century, had its first winter storm to exceed $1 billion
in 1987--one that caused $3.7 billion of destruction, $3.1 billion of which
was covered by insurance. Since then, Western Europe has had nine major
winter storms with insured losses ranging from $1.3 billion to $5.9 billion.

As the climate changes, more extreme weather events are expected. Andrew
Dlugolecki, a consultant on climate change and its effects on financial
institutions, notes that damage from atmospherically related events has
increased by roughly 10 percent a year. "If such an increase were to
continue indefinitely," he notes, "by 2065 storm damage would exceed the
gross world product. The world obviously would face bankruptcy long before
then." Few double-digit annual growth trends continue for several decades,
but Dlugolecki's basic point is that climate change can be destructive,
disruptive, and very costly.

If we allow the climate to spin out of our control, we risk huge financial
costs. In a late 2006 report, former World Bank chief economist Nicholas
Stern projected that the long-term costs of climate change could exceed 20
percent of gross world product (GWP). By comparison, the near-term costs of
cutting greenhouse gas emissions to stabilize climate, which Stern now
estimates at close to 2 percent of GWP, would be a bargain.

# # #

Adapted from Chapter 3, "Rising Temperatures and Rising Seas," in Lester R.
Brown, Plan B 3.0: Mobilizing to Save Civilization (New York: W.W. Norton &
Company, 2008), available for free downloading and purchase at

For information contact:

Media Contact:
Reah Janise Kauffman
Tel: (202) 496-9290 x 12
E-mail: rjk (at)

Research Contact:
Janet Larsen
Tel: (202) 496-9290 x 14
E-mail: jlarsen (at)

Earth Policy Institute
1350 Connecticut Ave. NW, Suite 403
Washington, DC 20036

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