Economic damage costs related to extreme climate events to date in the US exceed $35 Billion, says the National Oceanographic and Atmospheric Administration – NOAA. These costs are likely to affect both the domestic and the global economies already facing a serious crisis.
Nine billion dollar disasters have occurred so far in 2011 in the U.S. Among them are the upper Midwest and the Mississippi flooding; drought, heat waves, and fires in the Southern Plains and Southwest; tornadoes in several regions; and a large winter storm impacting many central, eastern and northeastern states.
Climate extremes have led to harvest losses affecting particularly corn, soybean, and cotton crops. Food prices moved upward as supply plummeted.
The hurricane season has been very active, with nine named storms so far. Tropical storm Irene is the first to gain hurricane strenght of the 2011 Atlantic season. It has passed over Puerto Rico on Sunday. There were no reports of deaths or major injuries in Puerto Rico, but 800,000 people — half of the island’s electricity customers — were left without power by the storm, which felled trees, swelled rivers over their banks and flooded some roads, says Reuters.
Irene, with 80 mph sustained winds, is now on a path towards the Bahamas and Florida coastline. A ridge of high pressure to the north of the storm, around Bermuda, should stay in place over the next few days, forcing the storm along a west-northwest path. Irene is expected to strengthen over the next 48 hours, potentially into a Category 2 hurricane, according to NOAA
Irene is set to be the first hurricane to hit the United States since Ike savaged the Texas coast in 2008. Hurricane-force winds extended outward from the core to 50 miles and tropical storm-force winds extended out up to 205 miles.
Authorities along the U.S. Atlantic seaboard, from Miami to New York, were closely watching Irene’s possible path, with at least some computer forecast models showing it might even sweep up near New York City early next week.
President Barack Obama was briefed about Irene while on vacation at the Massachusetts island of Martha’s Vineyard, White House officials said (Reuters).
Reports from Reuters say that the storm could be the catalyst the insurance industry has been seeking in its quest for across-the-board premium increases, in what already promises to be the costliest year in history for natural disasters around the globe.
There are likely to be other economic consequences of these climate-related disasters. Some of them are already in place. Reduced crops, food inflation, higher ethanol prices, disruption of economic activity, and destruction of property and infrastructure all have a recessionary component, affecting employment, income, and both private and public expending. They hit an already slow-moving economy in the midst of a new turn of the financial crisis as shockwaves after an earthquake.
Like the extreme natural events that hit Japan earlier, disasters in the U.S. will very probably add to domestic and global economic woes. An aggravation of the U.S. economic trouble will certainly add to the troubles of the fragile global economy. The U.S. recent stop-and-go, and the financial breakdown in the Eurozone are central elements of the present global crisis.
To make things worse, the Chinese government is highly concerned with food price inflation, mainly due to adverse climate events around the globe, and is set to reduce the pace of the domestic economy. A downturn of the Chinese economy at this moment would wipe out any hope that the global economy could recover from its present woes any soon.
Although the current crisis is a new turn of the financial crisis triggered by the subprime collapse, it has noticeable climate-related undercurrents. The crisis has not been fed only by bubbles, risk of default, and investors’ recurrent panic surges, but also by the economic consequences of extreme climate. After all, 2011 is the seventh year on a row with some major extreme climate events causing significant death tolls and economic damage.
Tags: Climate Change, climate-related disasters, crisis, economic losses, economy, hurricane, natural disasters, USA