Econ Syst Res 29(3):452461, Ouattara B, Strobl E (2013) The fiscal implications of hurricane strikes in the Caribbean. Correspondence to In order to design effective mitigation and adaptation disaster policies to this threat, it is important to understand the economic impact of natural disasters. It claimed overall more than 50 deaths. Impacts of tropical storms Buildings and bridges can be destroyed, people can get into difficulties in the water, and roads and railways can become damaged. Resembling large whirlpools, they are made up of rotating, moist air, with wind speeds that can reach over 120 km/h. To be consistent with the remaining analysis, I aggregate the given 26 sectors to the previously used seven sectoral aggregates.Footnote 14 For my analysis, I calculate the InputOutput coefficients by dividing the specific input of each sector by the total input of each sector given in the transaction matrix of the data: The resulting InputOutput coefficients \(IO^{j,k}\) range between 0 and 1 in year t. They indicate how much input from sector k is needed to produce one unit of output of sector j. Consequently, the InputOutput coefficients give an idea of the structural interactions of sectors within an economy and hence help to disentangle the indirect effects of tropical cyclone damage.Footnote 15. Clim Change 114(3):745768, Ghosh A (1958) Input-output approach in an allocation system. But those that do occur will be more intense and damaging. Notes The colored areas depict all significant coefficients between the sectors, with negative coefficients in red and positive in green. https://ideas.repec.org/c/boc/bocode/s352601.html, Nguyen CN, Noy I (2019) Measuring the impact of insurance on urban earthquake recovery using nightlights. First, I add to the research area on the macroeconomic effects of disasters. Loayza etal. How did the tropical cyclone impact environment Florence? | how did \end{aligned}$$, $$\begin{aligned} Damage_{i,t}= \dfrac{\sum _{g \in i}w_{g,t-1}}{W_{i,t-1}}*\sum _{g \in i} S (max)_{g,t}^{3}\mathbb {1}_{S(max)>92}, \end{aligned}$$, $$\begin{aligned} IO_t^{j,k}=\frac{Input_t^{j,k}}{Total Input_t^j} \end{aligned}$$, $$\begin{aligned} Growth_{i,t-1->t}^j=\alpha ^j + \beta ^j * Damage_{i,t} +\gamma ^j*{\mathbf {Z}}_{i,t-1} + \delta _t^j + \theta _i^j + \mu _i^j*t + \epsilon _{i,t}^j, \end{aligned}$$, $$\begin{aligned} Growth_{i,t-1->t}^j= & {} \alpha ^j + \sum _{L=0}^{20}( \beta _{t-L}^j * Damage_{i,t-L}) +\gamma ^j*{\mathbf {Z}}_{i,t-1} \nonumber \\&+ \delta _t^j + \theta _i^j + \mu _i^j*t + \epsilon _{i,t}^j, \end{aligned}$$, $$\begin{aligned} IO_{i,t}^{j,k}= & {} \alpha ^{j,k} + \beta ^{j,k} * Damage_{i,t}+ \lambda ^{j,k}*IO_{i,t-1}^{j,k} +\gamma ^{j,k}*{\mathbf {Z}}_{i,t-1} \nonumber \\&+\,\delta _t^{j,k} + \theta _i^{j,k} + \mu _i^{j,k}*t + \epsilon _{i,t}^{j,k}, \end{aligned}$$, $$\begin{aligned} R = {\left\{ \begin{array}{ll} 30, &{} \text {if } L \leqq 24^\circ \\ 30 + 2.5*abs(L)-24, &{} \text {if } L> 24^\circ \\ 75, &{} \text {if } L > 42^\circ . Environ Sci Technol 46(15):83748381, Lenzen M, Moran D, Kanemoto K, Geschke A (2013) Building Eora: a global multi-region input-output database at high country and sector resolution. Eur Econ Rev 101:441458, Chhibber A, Laajaj R (2008) Disasters, climate change and economic development in Sub-Saharan Africa: lessons and directions. Therefore, I re-estimate the results of Eqs. The coefficients range between zero and one. Meteorological history of Hurricane Florence - Wikipedia The recovery to trend hypothesis characterizes a pattern where after a negative effect in the short run, the economy recovers to the previous growth path after some time. 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. As climate change is warming ocean temperatures, there is potentially more of this fuel available. J Appl Meteorol Climatol 52(8):16881697, Blanc E, Strobl E (2016) Assessing the impact of typhoons on rice production in the Philippines. 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. The increase in tropical cyclone losses has led to concern that anthropogenic climate change is contributing to this trend. Hurricane Florence: The science behind the storm Furthermore, the results of the randomization test show that the \(H_0\) of no effect of tropical cyclone damage can be rejected at the 1% and 5% level of confidence for the agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels sectors, respectively. www.emdat.be, Haimes YY, Jiang P (2001) Leontief-based model of risk in complex interconnected infrastructures. The situation is completely different in the wholesale, retail trade, restaurants, and hotels sector aggregate, where a negative influence can be observed over almost the entire 20-year period. Additionally, tropical cyclone intensity is measured by remote sensing methods and other meteorological measurements. (2012) find no significant for the service sector.Footnote 21 Likely reason for this downturn could be less (domestic and international) touristic income for the restaurant and hotel sectors (Hsiang 2010; Lenzen etal. Environ Resource Econ 78, 545569 (2021). This will provide further insights into whether production processes are seriously distorted by tropical cyclones. Tropical cyclones can have devastating economic consequences. In: Bobrowsky PT (ed) Encyclopedia of natural hazards. Furthermore, one can argue that only countries exposed to tropical cyclones are relevant for this analysis; therefore, Table 36 provides a regression of the main result for exposed countries only. Mohan (2017) provides further evidence that in Caribbean countries agricultural crops are more severely affected by hurricanes compared to livestock. Cumulative lagged influence of tropical cyclone damage on sectoral GDP growth (20years). While the importance of the fishing sector for indirect tropical cyclones effects is a novel finding, it does not mean that other agricultural sectors do not exhibit negative direct effects.Footnote 28. 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. 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. Direct negative impacts can result from the destruction of productive capital, infrastructure, or buildings, and thereby can generate a negative income shock for the whole economy (Kousky 2014). In general, this analysis reveals production scheme transformations that can result from both supply and demand changes of the sectors due to tropical cyclones. Additionally, this finding undermines the urgency to analyze past influences beyond one or two years when examining the economic impacts of natural disasters. How Tropical Cyclone Eloise Impacted the Environment Appendix A.3 provides a more detailed description of the composition of the individual ISIC categories. Therefore, I propose a new damage measure that explicitly considers these different exposures. Furthermore, although the manufacturing sector shows no direct monetary damage, it is responsible for several changes in the production schemes of other sectors, leading to a monetary downturn in the mining and utilities (C&E) sectoral aggregate. 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. Based on damage estimates from EM-DAT, the authors find a negative effect for the agricultural and a positive effect for the industrial sector. In total, the majority of all sectoral aggregates experience lagged negative growth effects due to tropical cyclones. What impact do cyclones have on the economy? | how did tropical cyclone PubMedGoogle Scholar. 2008), and for a cross-section of 153 countries (Toya & Skidmore 2007). This paper contributes to two strands of the literature. The results indicate that the policies should focus on the direct costs of tropical cyclones. Anatomy of monster storm: how Cyclone Ilsa is shaping up to devastate I take advantage of the International Best Track Archive for Climate Stewardship (IBTrACS) provided by the National Oceanic and Atmospheric Administration (Knapp etal. Q J Econ 131(3):15431592, Berlemann M, Wenzel D (2018) Hurricanes, economic growth and transmission channels: empirical evidence for countries on differing levels of development. 2019). Direct impacts on commercial property and infrastructure can lead to production shortfalls. 2008; Mendelsohn etal. First, I account for the economic exposure by weighting the maximum occurred wind speed per grid cell and year by the number of exposed people living in that grid cell relative to the total population of the country. 2012). Kunze, S. Unraveling the Effects of Tropical Cyclones on Economic Sectors Worldwide: Direct and Indirect Impacts. Their destructiveness has three sources: damaging winds, storm surges, and heavy rainfalls. Econ Lett 94(1):2025, United Nations Statistical Division (2015a). 7. 2015). The underlying tables are only included for the direct sectoral effects, while the robustness tables for the InputOutput analysis are available upon request. 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. The storm started to form as the result of an area of low pressure over Western Africa. From a theoretical perspective, a natural disaster can have both positive and negative effects. Notes This figure demonstrates the distribution of the tropical cyclone damage variable (in standard deviations) for exposed agricultural areas (a) and exposed population (b) from 1970 to 2015, Figure 3 shows the country-year observations of the tropical cyclone damage variable for (a) exposed agricultural land and (b) exposed population. To address the varying economic exposure of affected areas, studies have used population (Strobl 2012), nightlight intensity (Heinen etal. Latent heat is another critical factor that influences the development of tropical cyclones. Consequently, for each grid point g, a wind speed S is calculated depending on the maximum sustained wind speed (M), the forward speed (T), the distance (D) from the storm center, and the radius of the maximum wind (R)Footnote 8: As a result, I generate hourly wind fields for each of the 7814 tropical cyclones in my sample period (19702015).Footnote 9 Figure 1 illustrates the resulting modeled wind fields for Hurricane Ike in 2008 on its way to the U.S. coast. The start of the arrow shows the input, and the end denotes the respective output. The authors find that after the 2008 Wenchuan Earthquake neighboring counties suffer from indirect negative growth effects due to changes within the manufacturing sectors. 16 in Appendix A.5. I expand their approach by not looking at overall GDP but at disaggregated GDP responses for seven sectoral aggregates. High levels of moisture in the air and low wind sheer formed showers and thunderstorms. They show that there are nearly no lagged responses present. The underlying estimations can be found in Tables 1213 in Appendix A.5. 18. 8 thus reduces the complexity of the analysis by showing only the sign of the significant coefficients together with color intensities representing different p-values. 2020). Details of How did the tropical cyclone eloise impact the environment? Springer, Dordrecht and New York, p 940, Lenzen M, Kanemoto K, Moran D, Geschke A (2012) Mapping the structure of the world economy. Fourth, to alleviate concerns of biased uncertainty measures (Hsiang 2016), I calculate different standard errors: NeweyWest standard errors with a lag length of 10 years and Conley-HAC standard errors, allowing for a spatial and temporal dependence within a radius of 1000km and within a time span of 10 years. It . For the sector aggregate wholesale, retail trade, restaurants, and hotels, a one standard deviation increase in tropical cyclone damage cause a decrease of \(-\,1.16\) percentage points of the annual per capita growth rate. 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. Across the Caribbean the economic costs of tropical cyclones amount to 2% of GDP annually since the 1950. As per the guidelines of the World . Energy Econ 46:576592, Kruk MC, Knapp KR, Levinson DH (2010) A technique for combining global tropical cyclone best track data. First, as shown by Nickell (1981), there is a systematic bias of panel regressions with a lagged dependent variable and fixed effects. Additionally, it is unexplained how the sectors are interconnected and if their structural dependence changes. Generally speaking, the proposed models offer a simple but strong way for causal interpretation of the impact of tropical cyclones on sectoral growth. Sept. 16: Some areas receive as much as 34 inches of rain from Sept. 13 to Sept. 16. Other basins have different names for the same phenomenon: tropical cyclone. Queensland has 20% of Australia's sugar cane production, but . 1.Environment . In order to examine tropical cyclones as exogenous weather shocks, I pursue a panel data approach with year and country fixed effects in a simple growth equation framework (Strobl 2012; Dell etal. Tropical Cyclone Eloise was the strongest tropical cyclone to impact the country of Mozambique since Cyclone Kenneth in 2019 and the second of three consecutive tropical cyclones to impact Mozambique in the 2020-21 South-West Indian Ocean cyclone season. The underlying calculations for these numbers are as follows: agricultural damage: 91/1027 = 0.0886, population damage: 82/1035 = 0.0801. Tropical Cyclones | World Meteorological Organization The gray areas represent the respective 95% confidence intervals and the red line indicates the respective (connected) cumulative point estimates. They ask significantly less input from other sector aggregates, while, at the same time, sectors from other aggregates ask more input from the manufacturing sectors. The results are particularly pressing, as tropical cyclones will continue to intensify due to global warming (Knutson etal. Originally a low-pressure system north of the Gulf of Carpentaria, Ingrid moved eastward and developed into a tropical cyclone in the Coral Sea on 6 March 2005. \(Damage_{i,t}\) is the derived damage function for country i at year t from Eq. Cyclone Nivar : A cyclone is a general term for a weather system in which winds rotate inwardly to an area of low atmospheric pressure. At the same time, other sectors demand more from the manufacturing sectors, resulting in a zero aggregate negative effect for them. Driven by climate change, at least in some ocean basins (Elsner etal. Econometrica 55(3):703708, Newson R (1998) PARMEST: Stata module to create new data set with one observation per parameter of most recent model. Google Scholar, Auffhammer M, Hsiang SM, Schlenker W, Sobel A (2013) Using weather data and climate model output in economic analyses of climate change. During 5 February, a tropical low was located south of Bali, Indonesia. 5. 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. I decide not to use the WIOD database because its country sample is not very exposed to tropical cyclones. 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). Consequently, \(\beta ^j\) is the coefficient of main interest in this specification. All weights are available in the HYDE 3.2 data set (Klein Goldewijk etal. Color intensities indicate p values according to: \(p<0.01\), \(p<0.05\), \(p<0.1\). Since the tropical cyclone data has global coverage since 1950, I am able to introduce lags of up to 20years without losing observations of my dependent variable, which ranges from 1971 to 2015. Possible reasons for these indirect effects, could be changes in fishing patterns in response to tropical cyclones (Bacheler etal. Additionally, I cluster the standard errors at broader regional levels as a further robustness test. Econ J 129(619):13271342, He S (2017) Randomization inference with Stata: a guide and software. About how did tropical cyclone eloise impact the economy. Cyclones also can bring torrential rains that lead to flooding. Princeton University Press, Princeton, Book 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. Best track data are a postseason reanalysis from different available data sources, including satellites, ships, aviation, and surface measurements, that are used to describe the position and intensity of tropical cyclones (Kruk etal. These surges, sometimes called tidal waves, can drown people and animals, and are often the greatest killers in a cyclone. Previous empirical studies on the relationship between economic development and tropical cyclone damage found a negative influence on GDP growth (e.g., Strobl 2011; Bertinelli and Strobl 2013; Grger and Zylberberg 2016). In this respect, the results of this research can also be used to calculate the future costs of climate change. Provided by the Springer Nature SharedIt content-sharing initiative, Over 10 million scientific documents at your fingertips, Not logged in The growth literature predicts that some potential positive or negative impacts of natural disasters emerge only after a few years. Cyclone Cheneso. J Infrastruct Syst 7(1):112, Hallegatte S, Przyluski V (2010) The economics of natural disasters: concepts and methods. (2018). Proc Natl Acad Sci USA 107(35):1536715372, Hsiang SM (2016) Climate econometrics. Latent Heat and Its Impact on Tropical Cyclones. [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. 2019; Cole etal. 2 contains a description of the data source, introduces the construction of the tropical cyclone damage measure, and presents descriptive statistics.