The New York Times had a piece over the weekend, noting that there's been a lot of weather related disasters recently, and relating these to climate change:
The floods battered New England, then Nashville, then Arkansas, then Oklahoma — and were followed by a deluge in Pakistan that has upended the lives of 20 million people.Given the generally poor state of climate change reporting in the US media, this is welcome.
The summer’s heat waves baked the eastern United States, parts of Africa and eastern Asia, and above all Russia, which lost millions of acres of wheat and thousands of lives in a drought worse than any other in the historical record.
Seemingly disconnected, these far-flung disasters are reviving the question of whether global warming is causing more weather extremes.
The collective answer of the scientific community can be boiled down to a single word: probably.
“The climate is changing,” said Jay Lawrimore, chief of climate analysis at the National Climatic Data Center in Asheville, N.C. “Extreme events are occurring with greater frequency, and in many cases with greater intensity.”
However, it motivated me to want to know more about the quantitative aspect of natural disasters - how significant are natural disasters to the global economy? What is the trend? Etc.
The best data I have found so far are from a 2009 report, Global Assessment Report on Disaster Risk Reduction, by the United Nations International Strategy for Disaster Reduction Secretariat (UNISDR).
Firstly, here are data on just the total economic losses due to natural disasters, in nominal (ie not inflation adjusted) dollars.
So they also do the obvious thing and provide a graph of losses as a ratio to GDP:
Here "100" denotes the average value over 1975-2007. Given that in 2005, the total losses were about $220 billion (US), and that global GDP that year was $45.5 trillion according to the IMF (estimated at market exchange rates), we are talking about natural disaster losses of about 0.5% of GDP that year, and the "100" average in the above graph corresponds to about 0.17% of global GDP.
These percentages sound small, but probably the way to think about them is as compared to economic growth. If the losses due to natural disasters were to become of the same size as current year-to-year economic growth, presumably there would not be much growth (we would just be replacing the stuff destroyed in disasters). Since global growth has generally been 4-5%/year, the worst case for natural disasters has been about a tenth of that. Not completely negligible - though certainly not a harbinger of imminent collapse.
Of the above graph, the report itself says "Figure 2.37 shows that when these losses are adjusted for inflation and expressed as a percentage of global GDP, the trend is far less pronounced and statistically insignificant."
My eyeball glance leaves me unsure that trend is statistically insignificant. Most of the big values are on the right hand side of the graph. However, analyzing it is not completely straightforward, since the data are certainly not normally distributed and a simple linear regression will not be reliable. I hope to present a non-parametric analysis tomorrow.
However, even if there was a residual trend, I think we would still have work to do to separate any exogenous climate signal from endogenous economic issues. In particular, it's very likely that there's been an overall shift in asset prices relative to GDP during the 1975 to 2007 period of this graph, and we would expect disaster losses to be proportional to asset prices (because they will be dominated by destruction of real estate). That too will have to wait for further analysis.