2 contains a description of the data source, introduces the construction of the tropical cyclone damage measure, and presents descriptive statistics. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. Future weather. The impact of cyclones can be extremely devastating, both in terms of loss of life and damage to infrastructure. The gray shaded area specifies the respective 95% confidence bands, and the red line depicts the connected estimates. High levels of moisture in the air and low wind sheer formed showers and thunderstorms. Estimated economic cost of Cyclone Pam in Vanuatu across all sectors was approximately 64% of the country's GDP in 2016. As per the guidelines of the World . Possible mechanisms for this situation are, for example, additional capital flowssuch as remittances from relatives living abroad (Yang 2008)international aid (deMel etal. Mohan (2017) provides further evidence that in Caribbean countries agricultural crops are more severely affected by hurricanes compared to livestock. Acemoglu D, Carvalho VM, Ozdaglar A, Tahbaz-Salehi A (2012) The network origins of aggregate fluctuations. This allows me to identify which of the competing hypothesesbuild-back-better, recovery to trend, or no recoveryis appropriate for which sector. Tropical Cyclone Cheneso was a strong tropical cyclone that affected Madagascar in January 2023. Global warming has 'changed' spread of tropical cyclones around the world In total, the majority of all sectoral aggregates experience lagged negative growth effects due to tropical cyclones. J Dev Econ 88(2):221231, Onuma H, Shin KJ, Managi S (2020) Short-, medium-, and long-term growth impacts of catastrophic and non-catastrophic natural disasters. 2019). 2018) or exposed area (Hsiang and Jina 2014) to weight the respective physical intensities of tropical cyclones. Nearly 2 million people have died globally due to tropical cyclones. However, little is known about the empirical InputOutput effects across broader sectors after a natural disaster shock. Compared to the existing literature, the non-existing of a direct positive contemporaneous response of the construction sector is a new finding. The second most indirectly affected sector is the construction sector. However, one year later, as shown in Fig. (2018). Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013 ). 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. The sample is larger than the maximum size of recognized sovereign states as it also includes quasi-autonomous countries such as the Marshall Islands, if data are provided for them by the UNSD. Second and most importantly, I contribute to the literature on InputOutput analysis of natural disasters. Country-year observations above two standard deviations are labeled with the respective ISO3 code. The winds are driven by this low-pressure core and by the rotation of Earth, which deflects the path of the wind through a phenomenon known as the Coriolis force. Perhaps the most challenging task is to identify critical sectors that may be responsible for widespread spillover effects leading to substantial modifications in other sectors production input schemes. In total, I use two different aggregation methods. Globally they are among the most destructive natural hazards. To be in line with the related growth literature, I estimate a further specification where I add a set of socioeconomic control variables (Islam 1995; Strobl 2012; Felbermayr and Grschl 2014). Taking all considerations together, I calculate the following tropical cyclone damage for each country i and year t: where \(w_{g,t-1}\) are the exposure weights, agricultural land, or population, in grid g in period \(t-1\). This does not mean that there have to exist a permanent negative growth effect for every period after the disaster. For sectoral GDP effects, however, no such evidence exists so far. Geosci Model Dev 12(7):30853097, Bacheler NN, Shertzer KW, Cheshire RT, MacMahan JH (2019) Tropical storms influence the movement behavior of a demersal oceanic fish species. The main specification is estimated for each of the \(j(={1,,7})\) sector aggregates separately. 25111299), Oosterhaven J (2017) On the limited usability of the inoperability IO model. How did the tropical cyclone Eloise impact the economy and people. Stat Softw Compon S352601. Exposed countries are defined as having at least one positive damage observation over the sample period. Provided by the Springer Nature SharedIt content-sharing initiative, Over 10 million scientific documents at your fingertips, Not logged in To implement the Fisher randomization test, I use the code generated by He (2017) and randomly permute the years of the tropical cyclone damage variable for 2000 repetitions. See the CLIMADA manual for furher details on the methods used https://github.com/davidnbresch/climada/blob/master/docs/climada_manual.pdf. Quick Answer: How Did Hurricane Florence Impact Public Health \(Damage_{i,t}\) is the derived damage function for country i at year t from Eq. Put in relation to the sample average per capita growth rate (2.53%), the effect translates to a decrease of \(-46\)%. This index is then multiplied by the cubed maximum wind speed \(S(max)_{g,t}^{3}\) in grid g and year t as calculated by Eq. Springer, New York, London, Toya H, Skidmore M (2007) Economic development and the impacts of natural disasters. How did the Tropical Cyclone Florence impact the people communities? \end{aligned}$$, https://doi.org/10.1007/s10640-021-00541-5, The economic impact of climate risks in China: evidence from 47-sector panel data, 20002014, The Impact of Hurricane Strikes on Short-Term Local Economic Activity: Evidence from Nightlight Images in the Dominican Republic, ICT diffusion and climate change: The role of economic growth, financial development and trade openness, CO2, SO2 and economic growth: a cross-national panel study, The Effects of Natural Disasters and Weather Variations on International Trade and Financial Flows: a Review of the Empirical Literature. Google Scholar, Auffhammer M, Hsiang SM, Schlenker W, Sobel A (2013) Using weather data and climate model output in economic analyses of climate change. As my panel has a length of 2545years, depending on the chosen model, I assume this bias will not influence my analysis.Footnote 19 Second, all control variables are measured in \(t-1\) to reduce potential endogeneity problems stemming from the fact that control variables in t can also be influenced by tropical cyclone intensities in t (Dell etal. 2019), Felbermayr and Grschl (2014) show that storms from the previous fiveyears can also have a negative growth effect. How did the tropical cyclone impact environment Florence? | how did The Effects of Cyclones on the Environment | Sciencing Even though, I thereby omit potential rainfall and storm surge damage, it is a common simplification in the literature (Hsiang 2010; Strobl 2011; Strobl 2012; Elliott etal. It is possible that the economy exhibits positive growth rates after a first negative growth shock. Sept. 16: Some areas receive as much as 34 inches of rain from Sept. 13 to Sept. 16. This importance for the sectoral composition was already demonstrated by Bulte etal. To demonstrate the average intersectoral connections within my sample, Fig. Tropical Cyclone Eloise, which hit southeastern Africa in January 2021, caused widespread flooding and landslides, resulting in at least 21 deaths and. This behavior most likely speaks for an enduring risk adjustment of tourists. 2017). So unfortunately, WA can expect regular cyclone impacts even as the climate . The underlying calculations for these numbers are as follows: agricultural damage: 91/1027 = 0.0886, population damage: 82/1035 = 0.0801. This study provides an explanation about which sectors contribute to an overall negative GDP-effect of tropical cyclones identified by previous studies (Noy 2009; Strobl 2012; Elliott etal. 4. Nevertheless, it unveils the importance of the manufacturing sectors, as already demonstrated by their strong intersectoral connection in Fig. Rev Environ Econ Policy 7(2):181198, Aznar-Siguan G, Bresch DN (2019) CLIMADA v1: a global weather and climate risk assessment platform. From a theoretical perspective, a natural disaster can have both positive and negative effects. Nat Hazards Rev 18(3):04016012, Mohan P, Strobl E (2017) The short-term economic impact of Tropical Cyclone Pam: an analysis using VIIRS nightlight satellite imagery. They show that there are nearly no lagged responses present. A one standard deviation strong event has a probability of 8.9% among events above zero for agricultural damage and 8% for population damage.Footnote 16, Heatmap of InputOutput coefficient averages, 19902015. It is evident from this analysis that many potential production changes are canceled out because of counteracting indirect effects. What impact do cyclones have on the economy? | how did tropical cyclone The remaining variables are defined as in Eq. It provides data on 26 homogeneous sectors for 189 countries from 1990 until 2015 and is the only InputOutput panel data set with (nearly) global coverage available. The robustness tests that frequently fail are those with Conley-HAC and NeweyWest standard errors. Econ Lett 94(1):2025, United Nations Statistical Division (2015a). Nonetheless, the results can provide general guidance for international disaster relief organizations that are active in various countries on how to direct their long-run disaster relief programs. Anatomy of monster storm: how Cyclone Ilsa is shaping up to devastate Additionally, Cole etal. Excellent proofreading was provided by Jamie Parsons and Harrison Bardwell. Furthermore, I use a more specific damage function than Hsiang & Jina (2014) which takes account of different sectoral exposure. These surges, sometimes called tidal waves, can drown people and animals, and are often the greatest killers in a cyclone. In contrast to this, the no recovery hypothesis states that natural disasters can lead to a permanent decrease of the income level without the prospect of reaching the pre-disaster growth path again.Footnote 1 This could result from a situation where recovery measures are not effectively implemented or where various negative income effects accumulate over time (Hsiang and Jina 2014; Onuma etal. This is a well-established method (Strobl 2012; Heinen etal. This study aims to better understand the sectoral impacts of tropical cyclones by looking at the direct and indirect effects in a large data set covering 205 countries from 1970 to 2015. Color intensities indicate p values according to: \(p<0.01\), \(p<0.05\), \(p<0.1\). Storms that are strongest originate off the west coast of Africa because they have two weeks worth of warm water to build up over. 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. The individual colors represent different wind speed intensities. Both variables are associated with the occurrence of tropical cyclones since they only form when water temperatures exceed 26 \(^{\circ }\)C and torrential rainfalls usually constitute part of them. In contrast to Eq. One reason could be that the destruction of productive capital outweighs the higher number of orders. I show that tropical cyclones have a significantly negative impact on the annual growth rate of two sectoral aggregates: agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels. PDF Tropical Cyclones: Impacts, the link to Climate Change and Adaptation (2020) provide evidence that after hurricane strikes in Central America, a short-term negative growth period (12months) is compensated by a positive recovery in the second year. (Color figure online). From 1980 to 2018 tropical cyclones were responsible for nearly half of all natural disaster losses worldwide, with damage amounting to an aggregate of USD 2111 billion (Munich Re 2018). About 12 hours before Hurricane Florence makes an appearance, both of Duke Energy's North Carolina plants will shut down. Figure 8 also offers an explanation for the downturn of the mining and utilities (C&E) sector aggregate after some years, as shown in Fig. Additionally, a new damage measure is developed that considers the varying levels of exposure of different sectors. 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. Pictured: The East Coast of the U.S. and the Gulf of Mexico viewed by satellite as Hurricane Florence made landfall on September 14. Google Scholar, Albala-Bertrand J-M (1993) Natural disaster situations and growth: a macro-economic model for sudden disaster impacts. Appendix Table 43 and 54 show that the results remain qualitatively unchanged. Econ Inquiry 46(2):214226, de Mel S, McKenzie D, Woodruff C (2012) Enterprise recovery following natural disasters. Second, I use this new damage data to analyze all (exposed) countries (84) to tropical cyclones worldwide, which allows me to obtain more generalizable results.Footnote 2 Third, I conduct a thorough assessment of the long-term sectoral influences of tropical cyclones, as there is evidence, that long-term effects on total GDP exist (Felbermayr and Grschl 2014; Hsiang and Jina 2014; Onuma etal. Winds have lessened to 45 mph. 2020). The sectoral GDP data originates from the United Nations Statistical Division (UNSD) (United Nations Statistical Division 2015b). 2013). The results indicate that the policies should focus on the direct costs of tropical cyclones. Hurricane Florence's Economic Damage on Carolinas, Virginia, and US The Aftermath of Hurricane Florence | AIR Worldwide 2014). Hurricane Florence reached its maximum wind speed of 130 knots (category 4 hurricane) on 11 September and made landfall on 14 September in North Carolina. J Econ Anal Policy 8(1):13. Additionally, it is unexplained how the sectors are interconnected and if their structural dependence changes. The manufacturing sectors use significantly less input from itself, which is not shown in Fig. In total, I extend this research area in three ways: First, I introduce a new objective damage measure that allows for sector specific exposure of tropical cyclones. Rev Econo Stat 101, Botzen WJW, Deschenes O, Sanders M (2019) The economic impacts of natural disasters: a review of models and empirical studies. Ecol Econ 107:333346, Le Cozannet G, Modaressi H, Pedreros R, Garcin M, Krien Y, Desramaut N (2013) Storm surges. (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 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. 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. World Dev 105:231247, Bertinelli L, Strobl E (2013) Quantifying the local economic growth impact of hurricane strikes: an analysis from outer space for the Caribbean. Climate change impacted Hurricane Florence's precipitation and size Driven by climate change, at least in some ocean basins (Elsner etal. WMO continues to monitor the "remarkable" tropical storm, which has cut a destructive path across . Hsiang (2010) also finds a negative effect of hurricanes for this sectoral aggregate for the Caribbean countries, whereas Loayza etal. The agriculture, hunting, forestry, and fishing sector aggregate first depicts negative growth rates but then quickly recovers after four years. Abstract. 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. By calculating the annual sectoral GDP per capita growth rate, I lose the first year of observation of the panel. This hypothesis is supported by empirical findings for a positive GDP growth effect for Latin American countries (Albala-Bertrand 1993), for high-income countries (Cuaresma 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. 2632). Asterisks and color intensities indicate p values according to: ***\(p<0.01\), **\(p<0.05\), *\(p<0.1\). Furthermore, a shortage in the labor force can lead to a wage increase, which can serve as an incentive for workers from other regions to migrate to the affected region, also leading to a positive effect (Hallegatte and Przyluski 2010). Their destructiveness has three sources: damaging winds, storm surges, and heavy rainfalls. There are two important points to note about this tropical cyclone damage variable. 2018 Hurricane Florence: Facts, FAQs, and how to help Additionally, tropical cyclone intensity is measured by remote sensing methods and other meteorological measurements. The impact of weather on economic growth and its production factors, Climate change and developing country growth: the cases of Malawi, Mozambique, and Zambia, A framework for assessing the economic impacts of Arctic change, https://github.com/davidnbresch/climada/blob/master/docs/climada_manual.pdf, https://www.munichre.com/en/solutions/for-industry-clients/natcatservice.html, https://ideas.repec.org/c/boc/bocode/s352601.html, http://www.nhc.noaa.gov/verification/verify5.shtml, https://unstats.un.org/unsd/snaama/Metadata/Glossary#, https://unstats.un.org/unsd/snaama/assets/pdf/methodology.pdf, http://data.un.org/Explorer.aspx?d=SNAAMA, http://creativecommons.org/licenses/by/4.0/. What are 3 impacts of tropical cyclones? https://www.munichre.com/en/solutions/for-industry-clients/natcatservice.html, Newey WK, West KD (1987) A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix. The underlying estimations can be found in Tables 1420 in Appendix A.5. Unraveling the Effects of Tropical Cyclones on Economic Sectors Worldwide: Direct and Indirect Impacts, $$\begin{aligned} S_{g} = {\left\{ \begin{array}{ll} \max (0, ((M - abs(T)) * \frac{R}{D}^\frac{3}{2} *e^{1-\frac{R}{D}^\frac{3}{2}})+T),&{} \text {if }D<10*R \text { from center to outer core} \\ 0, &{} \text {if }D>10*R \text { out of radius}. 2012). Weather Clim Soc 3(4):261268, Felbermayr G, Grschl J (2014) Naturally negative: the growth effects of natural disasters. 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. Additionally, I cluster the standard errors at broader regional levels as a further robustness test. 2. In a single country study on floods in Germany, Sieg etal. The data are collected every year for as many countries and regions as possible.Footnote 11 The sample used in my analysis covers the 19702015 period and includes a maximum of 205 countries.Footnote 12, To analyze potential sectoral shifts within the economy after a tropical cyclone, I take advantage of the InputOutput data of EORA26 (Lenzen etal. It is therefore important to examine their effects over time (Felbermayr and Grschl 2014; Hsiang and Jina 2014). PDF 4.5: Economic Impacts of Tropical Cyclones - University of Colorado Boulder Notes The colored areas depict all significant coefficients between the sectors, with negative coefficients in red and positive in green. It has been shown that the damage of tropical cyclones increases non-linearly with wind speed and occurs only above a certain threshold. The analysis of the past influences of tropical cyclone damage demonstrates that the sectoral growth response following a tropical cyclone is a complex undertaking. Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013). The logged per capita value added is not included for the robustness tests of the indirect effects of model 6, because it already compromises a lagged dependent variable. How did tropical cyclone Florence impact the economy? For both variables, I use the year-by-year variation calculated from the Climatic Research Unit (CRU) version 4.01, which is available at a resolution of approximately 50km since 1901 (University of East Anglia Climatic Research Unit et al. Additionally, within the agriculture, hunting, forestry, and fishing sectors, only the fishing sector experiences indirect negative effects. J Econ Geogr 19(2):373408, Cuaresma JC, Hlouskova J, Obersteiner M (2008) Natural disasters as creative destruction? In: Bobrowsky PT (ed) Encyclopedia of natural hazards. First, I add to the research area on the macroeconomic effects of disasters. Figure 6 illustrates the cumulative point estimates of the past influence of tropical cyclone damage on the different sectoral growth variables.Footnote 22 The x-axis represents the lags of the damage variable, while the y-axis indicates the size of the cumulative coefficient \(\beta\) (in standard deviations). First, tropical cyclones frequently cause a surge in ocean waters causing sea . Environmental impacts caused by Hurricane Florence A tropical cyclone is a low pressure system that develops over tropical waters, characterized by high winds and heavy rain. volume78,pages 545569 (2021)Cite this article. J Eur Econ Assoc 18(6):33373375, Forster J, Schuhmann PW, Lake IR, Gill JA (2012) The influence of hurricane risk on tourist destination choice in the Caribbean. I find a significantly negative influence of tropical cyclones on two sector aggregates including agriculture, as well as trade and tourism. Therefore, they take 5-year averages of the number of affected people normalized by the total population as main explanatory variable.
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