Hurricane Sandy: Economic Costs and Global Warming

Summary.  Hurricane Sandy struck the state of New Jersey and the New York metropolitan area on Monday October 29, 2012.  It caused damage estimated to range as high as US$50 billion, much of it due to storm surges that impacted wide stretches of shoreline in New Jersey, the heart of New York City, and eastward along New Yorkand Connecticut. 

The ravages of the storm could be due to factors related to global warming, such as increases in the moisture content of air over warm ocean waters, rising sea levels, and a blocking high pressure system that forced the path of the storm toward land.

Global warming is expected to worsen the impacts of extreme weather events such as Hurricane Sandy.  Society is faced with the prospect of having to remediate their effects as emergency situations each time one occurs.  Costs of such efforts affect us all, since they ultimately create a demand for higher taxes and for higher insurance premiums.  An alternative would be to undertake investments now to eliminate fossil fuels from our energy economy.  The sooner the world decarbonizes its energy usage, the smaller the accumulated level of atmospheric greenhouse gases will be, and the less harmful will be the effects of global warming on the people of the world.

 

Hurricane Sandy was an extensive and highly damaging storm that crossed from its ocean track onto land in New Jersey on Monday October 29, 2012.  Its characteristics, contributing to the high damage it caused, were the very large area it covered and the very high storm surge that it generated.  In addition, its winds, while not as high as those of other hurricanes, brought down many trees that severed electricity service, damaged homes, and even directly caused some deaths.

Why was Sandy destructive?  The climate science underlying the warming of the planet provides predictions, or scenarios, in terms of probabilities of trends occurring over long time periods and spanning wide regions of the planet.  Long term projections of future trends in the climate are not able to ascribe causes for short term weather events, such as hurricanes, with certainty.  In addition, not enough time has passed as of this writing for climate scientists to assess Hurricane Sandy in terms of its relationship to the warming of the planet.

Nevertheless, three factors from warming involved in hurricane activity include increased moisture content of air, higher sea level, and a weather block that caused the storm to shift its course.  First, as water temperatures get warmer, the absolute amount of water vapor that the air above it can hold increases by about 7% per ºC (about 4% per ºF) (for any temperature, this amount defines 100% on the scale of relative humidity).  As the ocean surface warms, a storm such as a hurricane picks up more water vapor which can be deposited as rain as the storm proceeds.

Second, sea levels have been rising since the industrial revolution began. Glaciers and land-based ice sheets have been melting, contributing new water to the oceans; this is attributed at least partly to global warming.  Also, water expands by about 0.026% per ºC at 25 ºC (0.015% per ºF at 77 ºF).  This expansion can proceed only upwards.  Although this percentage may seem insignificant, increased temperatures of ocean surface water penetrate to sufficient depths that expansion occurs throughout this layer.  This results in measurable increases in sea level as the earth warms.  The long-term rise in global average sea levels is shown below for the period 1870 to  2000.



Global average sea level trend from 1880 to 2000, referenced to a zero value given as the average for the period from 1961 to 1990, in mm.

Source: Intergovernmental Panel on Climate Change, 4th Assessment Report, 2007; http://www.ipcc.ch/publications_and_data/ar4/syr/en/figure-spm-1.html.

 

It is seen that over this interval the global average sea level has increased by about 190 mm (7.5 in.).  Furthermore, a reportpublished on Nov. 28, 2012 finds that sea levels have been increasing in recent decades even faster than predicted earlier by the Intergovernmental Panel on Climate Change. 

Third, the path followed by Hurricane Sandy was not typical for Atlantic hurricanes.  They usually track northeastward following the coast of the eastern U. S.  Sandy took an abrupt shift westward after following a northeastward path, due to the presence of a blocking high pressure air mass over eastern Canada and Greenland.  It is possible that the this blocking high was present as a result of an Arctic summer in which more sea ice melted this summer than ever recorded previously.  Loss of ice results in absorbing more heat from sunlight during the Arctic summer than when more ice is present.  It is possible that this altered weather over the Arctic placed the blocking high in Sandy’s path, a pattern that would not have been present without the exceptional extent of melting of Arctic sea ice.

These and other factors contributed to an unprecedented extent of damage from the storm surge accompanying Hurricane Sandy; there was also damage and economic loss inland including massive losses of electric power.  Coincidentally, a report by Grinsted and coworkers (submitted for publication some months earlier) appeared in the Proceedings of the (U. S.) National Academy of Sciences (commentary here) .  They surveyed records of storm surges from previous hurricanes and found, using a storm surge index, that hurricane-associated storm surges have increased recently in correlation with the increase in the global temperature.  They found that the highest values of the index occurred with the most extreme storm events.  More generally, climate scientists foresee that the intensity, and possibly the number, of severe tropical storms will increase as global warming proceeds.

The economic costs of Hurricane Sandy are hard to estimate, but are extremely high.  The New York Times reports that New York’s Governor Andrew Cuomo and New Jersey’s Governor Chris Christie together have assembled the aggregate damage assessment of US$71 billion.  They intend to petition the U. S. federal government for assistance in meeting these emergency expenses.  This sum includes US$9 billion estimated by Gov. Cuomo to construct new facilities and devices intended to mitigate any new threat of more intense, more damaging storms in the future.  Gov. Cuomo broke down his damage estimates in some detail , itemizing the categories of government response, individual assistance, housing, business impact, health, schools, transit, roads and bridges, parks and the environment, water, waste and sewer, utilities, and government operation revenue.  He estimated that the storm destroyed or damaged 305,000 housing units, caused 2,190,000 customers to lose power, and impacted   265,300 businesses.  Overall, in 16 states 8,510,000 million customers lost power. 

Gov. Christie issued a preliminary estimate of damage in New Jersey of US$29.4 billion.  His estimates included personal property, businesses, transportation, utilities infrastructure, and effects on the state’s tourism industry.  As is likely true for all areas impacted by the storm, more long-term effects include loss of economic activity, induced population shifts and impacts on the value of real estate.  [Addendum on Dec. 5, 2012:  ADP, the payroll processing firm, estimatedthat for the month of November, 86,000 jobs were lost because of the hurricane.  Losses were highest in manufacturing, retailing, leisure and hospitality, and temporary help industries.]

Insured losses from Sandy estimated by three firms fall in the range of US$16-25 billion, according to Zacks Equity Research.  In addition, one of the firms estimated that lost economic activity can be estimated at US$50 billion; these typically are uninsured and cannot be recovered.  Many large insurance companies that cover losses in the area hit by the storm have indicated that their ability to absorb the benefit payments due from their coverages exceed their capacity.  [Addendum on Dec. 5, 2012:  For instance, the insurance companies Travelers Corp. and Allstate report that losses they sustained due to Hurricdane Sandy are each over US$1 billion. ]

Analysis

Extreme weather events such as Hurricane Sandy appear to be increasing in number and severity in recent years, in conjunction with the increasing global average temperature.  This pattern is consistent with the expectations from climate modeling for a warming planet, which foresees, at various locations on the surface of the earth, more intense storms, increasing rainfall with flooding, and more extreme heat waves with drought.  Previous posts have surveyed the economic consequences of earlier extreme weather in the U. S.  and globally.

Global warming and its harmful consequences for humanity reflect not the annual rate of emission of greenhouse gases, but rather their total concentration accumulated in the atmosphere.  As long as even low annual rates of emission continue, the accumulated total continues to grow.  Accumulated atmospheric greenhouse gases determine the extent of global warming.  Carbon dioxide, the principal greenhouse gas, remains in the atmosphere for decades or centuries.  Therefore the greenhouse gas level cannot retreat to values we experienced in earlier decades.  We are stuck with the greenhouse gases currently present, and the extent of global warming they confer, indefinitely.  If the world wishes to stabilize the global average temperature, necessarily at a new, higher value, we must work toward developing a zero-carbon energy economy. 

Each extreme weather event is a natural disaster inflicting enormous damage, both physical and economic, on its victims.  Societal harms also arise as social and local economic structures are disrupted.  Each event brings with it the need for compensation at a large scale to help victims recover and restore their lives and livelihoods.  Eventually all citizens pay for this, because relief comes from governments, insurance benefits, and private charities.  Costs attributed to governments potentially lead to higher taxes that we all bear, and insurance benefit payments lead to higher premiums that many of us will pay.

The alternative to unscheduled needs for emergency response to extreme weather events is to invest in creating a carbon-free energy economy. All nations of the world should be striving to achieve a zero emissions energy economy as soon as possible.  This means that instead of creating the need for even more emergency relief by continuing “business-as-usual”, we invest early in zero carbon energy.  These investments will help stabilize the atmospheric level of greenhouse gases at lower levels, so that warming of the planet is attenuated.

© 2012 Henry Auer