Winds of 100 miles per hour, Hurricane Francine ripped in South Louisiana on September 11, knocking out power to hundreds of thousands of people. However, its most dangerous and damaging effect was the storm surge of seawater it pushed ashore, inundating coastal communities such as Terrebonne and Lafourche. A preliminary estimate by AccuWeather puts the damage at $9 billion, which is likely to be revised as scientists, insurance companies and government officials gather more data.
In the days, weeks and months after a hurricane like Francine makes landfall, a horde of public agencies and insurance companies try to figure out roughly how much they think the disaster will cost. It’s much more than just a number on the books: These estimates help state governments prioritize where to send aid and help initiate insurance claims, allowing people and local economies to recover more quickly from a disaster.
You’ll often see dramatically different estimates of hurricane damage, because each is done for its own purpose: Preliminary assessments made by the Federal Emergency Management Agency, for example, are used in the first 30 days after landfall to help determine if a major disaster declaration is warranted, and also helps officials figure out what public assistance programs may be needed in a disaster-stricken area.
Initial damage estimates can also raise public awareness, potentially increasing the amount of aid donated. “We saw this during Harvey in Texas in 2017,” said Jon Porter, AccuWeather’s chief meteorologist. “Many people across the country did not realize the extent and severity of the damage and suffering during the storm. As soon as AccuWeather issued our preliminary estimate of the total damage and economic loss from Harvey at $190 billion, we saw an outpouring of additional aid and relief from across the country in Texas.
Insurance companies can make a quick estimate of the damage since they already have data on property values. “But really, to get an accurate picture, you have to do a careful case study,” said Adam Rose, who studies the economics of disasters at the University of Southern California. “It’s usually not completed for another year or two, but it’s helpful to have some kind of a quick and dirty estimate ready.”
AccuWeather’s preliminary estimates aggregate a range of costs such as damage to property and infrastructure, lost jobs and wages, airport closures and much more. “Our estimates also account for the cost of evacuations, temporary relocation and the long-term impacts on transport, tourism and business logistics,” said Porter.
Counting how much a disaster costs also matters in the long run because it tells people the economic importance of disasters, and serves as an indicator of whether progress is being made to recover from such events. On a national scale, one of the most cited sources is the Billion-dollar weather and climate disasters dataset, a monthly report by the National Oceanic and Atmospheric Administration’s National Centers for Environmental Information. It records U.S. disasters that pass the billion-dollar mark, obtained from mining a mix of public federal and state statistics, as well as private sector data such as insurance claims, according to Adam Smith, an applied climatologist at the agency who leads the dataset.
Those billion-dollar price tags include losses incurred from a number of extreme weather events, such as hurricanes, severe storm events, tornadoes, floods, winter storms, wildfires, droughts and heat waves. However, not all monetary damages are included in that count—only what NOAA considers “direct total losses.”
Their definition of direct total losses spans 16 different categories, including damage to homes, vehicles, businesses, government buildings – as well as their contents – business interruption and the loss of living quarters when you are out of your home while it is repaired or repaired. rebuild. The assessment also includes damage to roads, bridges, charging systems, electrical grids, as well as crops. It is, as Smith describes it “a comprehensive yet still conservative estimate of what is actually lost.”
There’s still a lot it doesn’t cover, such as health-related costs that stem from a disaster, or the environmental degradation that can happen when a hurricane hits, Smith said.
The estimate from the billion dollar data set not only omits physical health care costs, but also does not count them mental health crises left in the wake of natural disasters. And then there is nature. Suppose a group of coral reefs or mangroves, two well-established natural buffers against storm surges, are damaged during a hurricane, effectively reducing the area’s resilience to future storms. Those associated costs are also not factored into the billion-dollar disaster damage assessment.
By not accounting for all of these effects, in addition to other expenses that tend to emerge after a disaster such as supply chain disruptions, the data set only captures a portion of a major disaster’s total price tag, thus providing only a snapshot of what losses look like as a warming planet makes disasters more frequent and more severe.
And when something like the damage to mental and physical health is not taken into account, it can contribute to the exclusion of the very people who tend to lose the most in a disaster and what can be done to alleviate it historical burden.
“If all we focus on is the cost to the economy, disaster losses are bearable, right? Within our economy, GDP tends to rise after disasters in the United States,” said Andrew Rumbach, a senior fellow at the Urban Institute. “That doesn’t mean they’re a good thing.”
After a storm hits, the loss of power and water, and the destruction of bridges and roads can make it difficult or impossible for businesses to restart. These are their own forms of widespread economic losses. If a hurricane hits New Orleans and Louisiana’s economic productivity drops in subsequent years, it takes a lot of numbers to determine how much the storm itself contributed, and how much productivity would have dropped anyway.
The nature of hurricanes means the economic damage can spread far beyond the coastlines they directly hit. Atlantic hurricanes form at sea, use hot water as fuel then ports along the Gulf and East coasts could take a hit, as they did when Katrina did $1.7 billion in damage to Louisiana’s ports. Even ports that are not hit can still cause economic ripple effects shut down as a precaution as a storm approaches. Goods don’t get where they need to be on time, and the costs pile up.
So in the longer term, the economic tallies of hurricane losses will often be much higher than initial estimates. But those first rough calculations are critical to avoid even bigger losses later. “If insurance companies pay their premiums sooner,” Rose said, “if government assistance is implemented sooner and more effectively, you can kind of start the recovery and reduce those business interruption losses.”
When talking about disaster damage, it is mainly in the language of business and economics, with staggering dollar signs. But there is a risk that comes with focusing too much on price tags, warns Rumbach, and that risk has to do with how disasters expose and exacerbate existing social divides. “There is also just that bigger question that we always have to ask: Is monetary value the right measure?”
As Rumbach sees it, a hurricane can destroy a mansion and a dozen cheaper garages. While the damage to the mansion and the collective damage to the mobile homes as they are crushed by governments and insurance agencies may be comparable, the magnitude of the impact just isn’t the same.
“Focusing too much on economic numbers really risks underestimating the impact that disasters have on marginalized populations,” Rumbach said. “Everything involved costs less. They make less income. Their homes are worth less, their infrastructure is less of a cost. Does that mean that the disasters are less important because they cost less money?”
