Bakkensen LA, Park D-SR, Sarkar RSR (2018) Climate costs of tropical cyclone losses also depend on rain. The weighted tropical cyclone damage variables are orthogonal to economic growth as well as the InputOutput coefficients, and the panel approach allows me to identify the causal effect. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. However, one year later, as shown in Fig. J Afr Econ 17(Supplement2):ii7ii49, Cole MA, Elliott RJR, Okubo T, Strobl E (2019) Natural disasters and spatial heterogeneity in damages: the birth, life and death of manufacturing plants. Ann Rev Resour Econ 8(1):4375, Hsiang SM, Jina AS (2014) The causal effect of environmental catastrophe on long-run economic growth: evidence from 6,700 cyclones. J Mon Econ 45(1):69106, Hsiang SM (2010) Temperatures and cyclones strongly associated with economic production in the Caribbean and Central America. What impact do cyclones have on the economy? | how did tropical cyclone World Bank Policy Research Working Paper 5507. http://hdl.handle.net/10986/3991, Heinen A, Khadan J, Strobl E (2018) The price impact of extreme weather in developing countries. Direct impacts on commercial property and infrastructure can lead to production shortfalls. The sample is larger than the maximum size of recognized sovereign states as it also includes quasi-autonomous countries such as the Marshall Islands, if data are provided for them by the UNSD. A damage function that takes into account only the exposed population would underestimate the damage caused to the agricultural sector, given the large unpopulated but agriculturally used areas in the north and west of Australia. Climate change will lead to fewer tropical cyclones overall. The country fixed effects \(\theta _i\) control for unobservable time-invariant country-specific effects, such as culture, institutional background, and geographic location. However, to control for possible rainfall damage, I conduct a robustness test which includes a variable for precipitation (see Appendix Table 24 and and Figs. One major effort of this paper is to generate a new meaningful sectoral damage variable on a country-year level. Freddy: The deadly cyclone that lasted more than a month Positive effects include, for instance, as a consequence of the destruction of capital, that the marginal productivity of capital increases, making it more attractive to invest in capital in the affected area (Klomp and Valckx 2014). (2012) investigate the effect of natural disasters on three sectors (agriculture, manufacturing, service) in a global sample for the period 19612005. Each year the impacts of tropical cyclones and other weather, climate and water extremes around the Earth give rise to multiple casualties and significant damage to property and infrastructure, with adverse economic consequences for communities that can persist for many years. Appendix A.5 presents further statistics: Figs. The most interesting changes can be observed within the single sectors of the manufacturing (D) aggregate. What is the Impact of Coriolis Force and Latent Heat on the.. Additionally, it seems that the fishing sector is responsible for the negative supply shock in the agriculture, hunting, forestry, and fishing sector aggregate. http://data.un.org/Explorer.aspx?d=SNAAMA, University of East Anglia Climatic Research Unit, Harris IC, Jones PD (2017) CRU TS4.01: climatic research unit (CRU) time-series (TS) version 4.01 of high-resolution gridded data of month-by-month variation in climate (Jan. 1901Dec. Econ Syst Res 29(3):452461, Ouattara B, Strobl E (2013) The fiscal implications of hurricane strikes in the Caribbean. The other proportional shares on total GDP are: Wholesale, retail trade, restaurants, hotels (15%); agriculture, hunting, forestry, fishing (14%); mining and utilities (10%); transport, storage, communication (8%). In a similar manner, Mohan and Strobl (2017) find evidence that a positive growth effect of the construction sector, financed by international aid or government programs, lead to a fast recovery of South-Pacific Islands after tropical cyclones.Footnote 27, Significant effects of tropical cyclone damage on disaggregated InputOutput coefficients. Unraveling the Effects of Tropical Cyclones on Economic Sectors For the agricultural sector, I use the fraction of exposed agricultural land, while for the remaining sectors, I use the gridded population. Cyclone Nivar and its Impact | Civils360 IAS In contrast to this, the no recovery hypothesis states that natural disasters can lead to a permanent decrease of the income level without the prospect of reaching the pre-disaster growth path again.Footnote 1 This could result from a situation where recovery measures are not effectively implemented or where various negative income effects accumulate over time (Hsiang and Jina 2014; Onuma etal. 2008), and for a cross-section of 153 countries (Toya & Skidmore 2007). The variables are measured in constant 2005 USD. Both variables are associated with the occurrence of tropical cyclones since they only form when water temperatures exceed 26 \(^{\circ }\)C and torrential rainfalls usually constitute part of them. This suggests that the production chains of the economy are only slightly disrupted by tropical storms, and indirect impacts are thus negligible. What will Hurricane Florence impact be on the economy? 2014). Moody's estimates that the property loss and direct damages from Hurricane Florence will total $17-22 billion, making it one of the top 10 costliest natural disasters in US history. Nat Clim Change 2(3):205209, Miranda JJ, Ishizawa OA, Zhang H (2020) Understanding the impact dynamics of windstorms on short-term economic activity from night lights in Central America. The error term \(\epsilon _{i,t}\) is clustered at the country level. High levels of moisture in the air and low wind sheer formed showers and thunderstorms. The main specification is estimated for each of the \(j(={1,,7})\) sector aggregates separately. Additionally, it is unexplained how the sectors are interconnected and if their structural dependence changes. In Sect. PubMedGoogle Scholar. The record-breaking rainfall from hurricanes such as Harvey and Florence can be attributed to three factors that have been linked to a warming climate. The sixth named storm, third hurricane, and the first major hurricane of the 2018 Atlantic hurricane season, Florence originated from a strong tropical wave that emerged off the west coast . [2] Between 1979 and 2017, there was a global increase in the proportion of tropical cyclones of Category 3 and higher on the Saffir-Simpson scale. To the best of my knowledge, this is the first paper that analyzes global sectoral interactions after the occurrence of a tropical cyclone. For the latitude and longitude the model takes a spline interpolation, whereas for intensity and time observations it uses a linear interpolation. As the manufacturing sectors are responsible for much of the counterbalancing of indirect effects, they should not be forgotten by the policymakers, even though they show no direct negative effects. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. World Dev 21(9):14171434, Angrist JD, Pischke J-S (2009) Mostly harmless econometrics: an empiricists companion. (2018). Florence was labeled a post-tropical cyclone at 5 a.m. on Tuesday, Sept. 18, according to the National Hurricane Center. Q J Econ 110(4):11271170, Klein Goldewijk K, Beusen A, Doelman J, Stehfest E (2017) Anthropogenic land use estimates for the holoceneHYDE 3.2. All weights are available in the HYDE 3.2 data set (Klein Goldewijk etal. This exogenous measure allows me to identify an immediate negative growth effect of tropical cyclones for two out of seven sectoral aggregates including agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels. Furthermore, I cluster the standard errors at broader regional levels to account for the event that tropical cyclones can also affect neighboring countries within one region.Footnote 31 Additionally, I control for the yearly tropical cyclone frequency per year, I test a different damage variable (mean instead of maximum cubed wind speed per year), and include tropical cyclone basin fixed-effects in further robustness tests. Moreover, for the vast majority of sectors, the indirect effects do not last longer than oneyear. - 103.17.108.37. Tropical Cyclone Eloise, which hit southeastern Africa in January 2021, caused widespread flooding and landslides, resulting in at least 21 deaths and. Economic impact of Hurricane Florence set to devastate US east coast For example, Loayza etal. How Tropical Cyclone Eloise Impacted the Environment Notes The colored areas depict all significant coefficients between the sectors, with negative coefficients in red and positive in green. The gray areas represent the respective 95% confidence intervals and the red line indicates the respective (connected) cumulative point estimates. How did the tropical cyclone impact the people communities? 1315 show the cumulative results for different lag lengths (5, 10, 15), and Tables 1315 exhibit the underlying estimations. Concurrently, the construction sector demands significantly more input (1.84%) from the agriculture, hunting, forestry, and fishing sector. Table 1 presents the results of the main specification for each of the seven annual sectoral GDP per capita growth rates. Better post-disaster assistance is not the only required improvement; policymakers should also find ways to better prepare the affected sectors of their economy for possible effects of tropical cyclones before they strike. Anatomy of monster storm: how Cyclone Ilsa is shaping up to devastate Int J Disaster Risk Sci 10(2):166178, Munich R (2018) NatCatSERVICERelevant natural loss events worldwide 19802018. First, as shown by Nickell (1981), there is a systematic bias of panel regressions with a lagged dependent variable and fixed effects. Economic sectors most vulnerable to direct capital destruction of tropical cyclones must be identified. While some studies provide evidence of only a short-term economic impact of tropical cyclones (Bertinelli and Strobl 2013; Elliott etal. I tested my data extensively for outliers having a high influence on my results. Resembling large whirlpools, they are made up of rotating, moist air, with wind speeds that can reach over 120 km/h. The storm was named by the Australian Bureau of Meteorology on 4 February and and finally came to an end on 14 March. 2018 Hurricane Florence: Facts, FAQs, and how to help Nonetheless, the results can provide general guidance for international disaster relief organizations that are active in various countries on how to direct their long-run disaster relief programs. What are 3 impacts of tropical cyclones? Kunze, S. Unraveling the Effects of Tropical Cyclones on Economic Sectors Worldwide: Direct and Indirect Impacts. 1 but only for values above 92 km/h. The sectoral GDP data originates from the United Nations Statistical Division (UNSD) (United Nations Statistical Division 2015b). The South Pacific has recently been hit by particularly destructive cyclones like Winston and Pam. Consequently, \(\beta ^j\) is the coefficient of main interest in this specification. Furthermore, I use a more specific damage function than Hsiang & Jina (2014) which takes account of different sectoral exposure. Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolinas and Georgia. Observations were excluded if they were above the \((2k+2)/n\) threshold for leverage and above the 2/sqrt(n) threshold for dfbeta. As demonstrated in Fig. Cyclone Eloise - Wikipedia Open Access funding enabled and organized by Projekt DEAL. While the distribution reveals that on average, geographically smaller countries, such as Hong Kong, Dominica or Jamaica, have a higher damage, there exists a difference between both damage measures, even for the highly exposed countries. Additionally, I cluster the standard errors at broader regional levels as a further robustness test. Sven Kunze. Further details on the data on tropical cyclones can be found in Appendix A.1. This corresponds to a mean annual global loss of USD 16.7 billion (measured in constant 2005 USD) for the sample average. My results indicate that this negative aggregate effect can be attributed to two sectoral aggregates, including agriculture, hunting, forestry, and fishing; manufacturing and wholesale, retail trade, restaurants, and hotels. The underlying estimations can be found in Tables 1213 in Appendix A.5. 2010). How Tropical Cyclone Eloise Impacted the Economy These factors are a decrease in the forward speed of a storm, increased intensity, and more water vapor in the atmosphere. The wind speed drops with distance to the center of the hurricane and as soon as it makes landfall. Latent Heat and Its Impact on Tropical Cyclones. 2020), and, simultaneously, more people will be exposed to tropical cyclones. The procedure is hierarchical and reaches from other official governmental publications over publications from other international organizations to the usage of data from commercial providers (United Nations Statistical Division 2015b). During 6 February, the Australian Bureau of Meteorology (BoM) reported that the tropical low had developed into a Category 1-cyclone on the Australian scale . However, on average, the previously found effects can be replicated for 12 out of the 15 robustness tests.Footnote 35 Given the reduced quality of the data and a shorter time span (20years), the InputOutput analysis still offers solid results. Since the commonly used report-based EM-DAT data set (Lazzaroni and van Bergeijk 2014) has been criticized for measurement errors (Kousky 2014), endogeneity, and reverse causality problems (Felbermayr and Grschl 2014), I use meteorological data on wind speeds to generate a proxy for the destructive power of tropical cyclones.Footnote 3 This approach is in line with previous empirical studies (e.g., Hsiang 2010; Strobl 2011, 2012), but I advance this literature by generating a sector-specific damage function. In the first test, I introduce a variable which counts the yearly frequency of tropical cyclones above 92 km/h per country (see Appendix Table 40 and Figs. Therefore, we can be sure that the reduced sample size does not drive the new results. \end{array}\right. } Taking all considerations together, I calculate the following tropical cyclone damage for each country i and year t: where \(w_{g,t-1}\) are the exposure weights, agricultural land, or population, in grid g in period \(t-1\). In the second test, I take the mean wind speed cubed \((S(mean)^3_{g,t})\) above 92 km/h per grid and year to calculate the \(damage_{i,t}\) (see Appendix Table 41 and Figs. The start of the arrow shows the input, and the end denotes the respective output. Figure 7 illustrates the connections of significant changes of the InputOutput coefficient together with the effect size relative to the sample average of the respective InputOutput coefficients in parentheses (in %) resulting from model 6. 2.Economy 3.People /communities http://hdl.handle.net/10986/2512, Yang D (2008) Coping with disaster: the impact of hurricanes on international financial flows, 19702002. The coefficients show the increase of the respective damage variable by one standard deviation. In Pictures: Cyclone Eloise displaces thousands in Mozambique 2632). The logged per capita value added is not included for the robustness tests of the indirect effects of model 6, because it already compromises a lagged dependent variable. Quick Answer: How Did Hurricane Florence Impact Public Health He finds a negative effect for the ISIC sectors agriculture, hunting, forestry, and fishing (A&B), mining, and utilities (C&E), wholesale, retail trade, restaurants, and hotels (GH), but a positive effect for the construction sector (F). Econ Lett 94(1):2025, United Nations Statistical Division (2015a). This is because there are regions showing increases or . Hsiang (2010) also finds a negative effect of hurricanes for this sectoral aggregate for the Caribbean countries, whereas Loayza etal. Slider with three articles shown per slide. The remainder of this paper is structured as follows: Sect. Eur Econ Rev 101:441458, Chhibber A, Laajaj R (2008) Disasters, climate change and economic development in Sub-Saharan Africa: lessons and directions. 7. The different colors represent different average coefficients, ranging from 0 (light purple) to 0.24 (dark purple). Figure 6 demonstrates that three out of seven sectoral aggregates suffer from delayed negative impacts of tropical cyclones. In the years following a tropical cyclone, the majority of sectors experience negative growth effects. The increase in tropical cyclone losses has led to concern that anthropogenic climate change is contributing to this trend. This finding clearly opposes the build-back-better hypothesis as well as the recovery to trend hypothesis. The storm currently has a maximum sustained wind speed of 25 mph and is located 105 miles west-northwest of New York City at the time of publication, as reported by CBS News. Cyclones also can bring torrential rains that lead to flooding. In total, the majority of all sectoral aggregates experience lagged negative growth effects due to tropical cyclones. This paper contributes to two strands of the literature. Such data are positively correlated with GDP (Felbermayr and Grschl 2014) and prone to measurement errors (Kousky 2014). By calculating the annual sectoral GDP per capita growth rate, I lose the first year of observation of the panel. Freddy has finally been declared over by the French Meteorological service. Driven by climate change, at least in some ocean basins (Elsner etal. Alfred-Weber-Institute for Economics, Heidelberg University, Bergheimerstrasse 58, Heidelberg, 69115, Germany, You can also search for this author in J Dev Econ 97(1):130141, Terry JP (2007) Tropical cyclones: climatology and impacts in the South Pacific. In this respect, the results of this research can also be used to calculate the future costs of climate change. As tropical cyclones are exogenous to sectoral economic growth, the greatest threat to causal identification could arise by omitting important climatic variables that are correlated with tropical cyclones (Auffhammer etal. Given these positive demand effects, one may ask why a significant contemporaneous positive direct effect for the construction sector cannot be seen. Additionally, I allow for country-specific linear trends \(\mu _i*t\). To address the varying economic exposure of affected areas, studies have used population (Strobl 2012), nightlight intensity (Heinen etal. On Sunday it moved on from Zimbabwe to dump heavy rain on some areas of South Africa's Limpopo, Mpumalanga and KwaZulu-Natal provinces, authorities there said. Springer, New York, London, Toya H, Skidmore M (2007) Economic development and the impacts of natural disasters. They can best be summarized by three possible hypotheses: recovery to trend, build-back-better, and no recovery (Chhibber and Laajaj 2008). Hurricane Florence: The science behind the storm 2020). Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013 ). 912, while Tables 511 show the regression results. The sum of these exposure weights \(w_{g,t-1}\) is divided by the total sum of the weights \(W_{i,t-1}\) in country i in period \(t-1\). These opposing production changes may be one of the reasons why we can see no aggregate direct cost effects. Proc Natl Acad Sci USA 107(35):1536715372, Hsiang SM (2016) Climate econometrics. The damaging winds are responsible for serious destruction of buildings and vegetation. Future weather. During 5 February, a tropical low was located south of Bali, Indonesia. The Effects of Cyclones on the Environment | Sciencing Notes This figure shows the significant effects of a one standard deviation increase in tropical cyclone damage on the respective InputOutput coefficient. Distribution of tropical cyclone damage, 19702015. The word hurricane is only used in the Atlantic, Caribbean Sea, Gulf of Mexico, and eastern Pacific, for storms that sustain winds at or above 74 miles per hour. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. About how did tropical cyclone eloise impact the economy. Tropical cyclone | Definition, Causes, Formation, and Effects Upon examining the underlying estimates in Tables 1213 in Appendix A.5, it is evident that the transport, storage, communication sectoral aggregate also turns negative, at least at the 90% confidence interval.Footnote 23. Econ J 122(559):6491, Dell M, Jones BF, Olken BA (2014) What do we learn from the weather? B.E. Second and most importantly, I contribute to the literature on InputOutput analysis of natural disasters. The remaining variables are defined as in Eq. \end{aligned}$$, https://doi.org/10.1007/s10640-021-00541-5, The economic impact of climate risks in China: evidence from 47-sector panel data, 20002014, The Impact of Hurricane Strikes on Short-Term Local Economic Activity: Evidence from Nightlight Images in the Dominican Republic, ICT diffusion and climate change: The role of economic growth, financial development and trade openness, CO2, SO2 and economic growth: a cross-national panel study, The Effects of Natural Disasters and Weather Variations on International Trade and Financial Flows: a Review of the Empirical Literature. The radius of maximum wind (R, in km) is related to the latitude (L) of the respective raw data tropical cyclone position in the following way: Since the tropical cyclone data are available at global coverage since 1950, I will extend my database later for further specifications. How did the tropical cyclone impact the communities of Florence? | how This hypothesis is supported by empirical findings for a positive GDP growth effect for Latin American countries (Albala-Bertrand 1993), for high-income countries (Cuaresma etal. The storm is expected to affect Duke Energy's 1,870 megawatt (MW) Brunswick and 932MW Harris nuclear plants in North Carolina, as well as potentially the 1,676MW Surry plant in Virginia, owned by Dominion Energy. Unraveling the Effects of Tropical Cyclones on Economic Sectors Worldwide: Direct and Indirect Impacts, $$\begin{aligned} S_{g} = {\left\{ \begin{array}{ll} \max (0, ((M - abs(T)) * \frac{R}{D}^\frac{3}{2} *e^{1-\frac{R}{D}^\frac{3}{2}})+T),&{} \text {if }D<10*R \text { from center to outer core} \\ 0, &{} \text {if }D>10*R \text { out of radius}. 00:00 00:00 An unknown error has occurred Additionally, within the agriculture, hunting, forestry, and fishing sectors, only the fishing sector experiences indirect negative effects. 4, I introduce a lagged dependent variable, since I suspect a strong path dependence of the InputOutput coefficient, i.e., most sectors plan their inputs at least one period ahead. The error bars depict the 95% confidence intervals. There are two important points to note about this tropical cyclone damage variable. It is therefore important to examine their effects over time (Felbermayr and Grschl 2014; Hsiang and Jina 2014). Based on the InputOutput analysis, there are only a small number of significant sectoral shifts. 2632). 2019). NHESS - Economic damage and spillovers from a tropical cyclone To demonstrate the average intersectoral connections within my sample, Fig. How did the tropical cyclone Eloise impact the economy and people. Perhaps the most challenging task is to identify critical sectors that may be responsible for widespread spillover effects leading to substantial modifications in other sectors production input schemes. (2012) use data from EM-DAT as main input for their explanatory variables. J Appl Meteorol Climatol 52(8):16881697, Blanc E, Strobl E (2016) Assessing the impact of typhoons on rice production in the Philippines. Despite having the largest negative shock, destroyed capital is relatively quickly replaced. In subsequent years, tropical cyclones negatively affect the majority of all sectors. Environ Res Lett 13(7):074034. Tropical Cyclone Freddy on track to become record-breaking storm J Eur Econ Assoc 18(6):33373375, Forster J, Schuhmann PW, Lake IR, Gill JA (2012) The influence of hurricane risk on tourist destination choice in the Caribbean. 2019), Felbermayr and Grschl (2014) show that storms from the previous fiveyears can also have a negative growth effect. 2023 Springer Nature Switzerland AG. 6: The manufacturing sectors ask significantly less input from it. In: Bobrowsky PT (ed) Encyclopedia of natural hazards. The Aftermath of Hurricane Florence | AIR Worldwide 2014) remain. So unfortunately, WA can expect regular cyclone impacts even as the climate . Since climatological impacts are most likely nonlinear, I also include squared precipitation and temperature in a further robustness test. J Dev Econ 88(2):221231, Onuma H, Shin KJ, Managi S (2020) Short-, medium-, and long-term growth impacts of catastrophic and non-catastrophic natural disasters. This heat is the energy that is released or absorbed during a phase change in water. Ten mass-feeding kitchens were set up. Econ Syst Res 25(1):2049, Lenzen M, Malik A, Kenway S, Daniels P, Lam KL, Geschke A (2019) Economic damage and spillovers from a tropical cyclone. Second, I use this new damage data to analyze all (exposed) countries (84) to tropical cyclones worldwide, which allows me to obtain more generalizable results.Footnote 2 Third, I conduct a thorough assessment of the long-term sectoral influences of tropical cyclones, as there is evidence, that long-term effects on total GDP exist (Felbermayr and Grschl 2014; Hsiang and Jina 2014; Onuma etal. A tropical cyclone is a low pressure system that develops over tropical waters, characterized by high winds and heavy rain. The agricultural sector relies heavily on environmental conditions as most of its production facilities lie outside of buildings and are hence more vulnerable to the destructiveness of tropical cyclones. I decide to only examine changes in the InputOutput coefficients and not at indirect costs because it almost needs no assumptions. Queensland has 20% of Australia's sugar cane production, but . Based on damage estimates from EM-DAT, the authors find a negative effect for the agricultural and a positive effect for the industrial sector. The fourth tropical storm and fifth tropical cyclone of the 2022-23 South-West Indian Ocean cyclone season, Cheneso developed out of a zone of disturbed weather status which was first monitored at RSMC La Runion on 17 January. Rev Econ Stat 93(2):575589, Strobl E (2012) The economic growth impact of natural disasters in developing countries: evidence from hurricane strikes in the Central American and Caribbean Regions. On average, the sector aggregates agriculture, hunting, forestry, and fishing (A&B) and mining and utilities (C&E) are only slightly dependent on other sectors, while there is a stronger dependence for the remaining sectoral aggregates. Thus, tropical cyclones are and will continue to be a serious threat to the life and assets of a large number of people worldwide. This will provide further insights into whether production processes are seriously distorted by tropical cyclones.
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