Minimizing the Economic Effects of Natural Disasters

Hurricanes, tornadoes, tropical cyclones, droughts, floods, and wildfires combine to become a perfect storm of devastating economic impacts. Financially, the effects are felt everywhere from the gas pump to the grocery store. Storm frequency is exacerbated by climate change. Calculating and categorizing the financial costs is a cumulative effort that can take years after a storm strikes. Developing a plan to address minimizing the economic impact will require professionals from a variety of industries work together and make decisions needed to stem the damage.

Let’s take a look at some of the numbers over the years and decades. In 2017, there were 16 weather and climate disaster events in the United States, with losses exceeding $1 billion each. These events included one drought, two floods, one freeze event, eight severe storms, three tropical cyclones, and one wildfire, according to the National Oceanic and Atmospheric Administration’s National Centers for Environmental Information. More notable than the high frequency of these events in 2017 is the cumulative cost – $306.2 billion – a new U.S. annual record, shattering the previous U.S. annual record cost of $214.8 billion, established in 2005 due to the impact of Hurricanes Dennis, Katrina, Rita and Wilma.

During the past four decades, from 1980 through 2017, there were 219 weather-related and climate-related disasters totaling $1,537 billion in losses, an average of $7 billion per event. They are broken down by category as follows: 25 droughts totaling $236.6 billion, an average of $8 billion each; 28 floods totaling $119.9 billion, an average of $4.3 billion each; 8 freeze events totaling $27.6 billion, an average of $3.5 billion each; 91 severe storms (hurricanes/tornadoes) totaling $206.1 billion, an average of $2.3 billion per storm; 38 tropical cyclones totaling $850.5 billion, an average of $22.4 billion each; 15 wildfires totaling $53.6 billion, an average of $3.6 billion each; 14 winter storms totaling $43.1 billion, an average of $3.1 billion each.

 

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