International
Hurricane Harvey flooding in Houston, Texas / Flickr

Int'l - Cost of extreme weather due to climate change is severely underestimated

Over the past decade, a compelling body of evidence has linked a range of extreme weather events to human-caused climate change. This area of research – known as “event attribution” – provides a means for climate scientists to examine how the severity and frequency of weather events, such as heatwaves, droughts and storms, are changing as greenhouse gas concentrations rise.

In a pair of new journal papers, we have attempted to open up a new avenue for quantifying the “attributable costs” of weather-related disasters. We focus on recent droughts and floods in New Zealand and the landfall of Hurricane Harvey in Texas in 2017.

Using event attribution as the scientific basis for quantifying how extreme weather has changed, we have been examining the links between changes in extreme weather and their economic consequences.

If we can quantify the contribution from climate change to an extreme weather event and we can also know the cost of the associated disaster, then we can put a financial figure on the climate change component of those costs. These calculations then provide us with the price tag of climate change, through its impact on extreme weather events.

Quantifying attributable costs

In the two studies, both published in the journal Climatic Change, we look at droughts and floods in New Zealand during the decade 2007-17 and the landfall of Hurricane Harvey in Texas in August 2017.

The New Zealand Treasury estimated that two droughts in 2007 and 2013 jointly reduced GDP in New Zealand by around NZ$4.8bn (US$3.4bn in 2017). Using previously published methods, which used climate models to estimate changes in the types of weather patterns typical of severe New Zealand drought, we estimate that around NZ$800m (US$568m) of this cost is due to climate change.

We also analysed 12 extreme rainfall events, which contributed a total of around NZ$470m (US$334m) in insurance losses, by applying techniques used elsewhere. This involved running regional climate models thousands of times over, both with and without human influences, and looking at how often the events in question occurred in each case. Based on this, we estimate that around NZ$140m (US$99m) of those insurance losses were attributable to human influence on the climate.

The two sets of costs are not directly comparable – one measures reductions in economic performance and the other measures insured losses. The main insight is that event attribution is able to show that climate change is already causing significant losses to New Zealand. Climate change is not only a future problem, but it is costing us here and now.

Benchmarking social cost of carbon estimates

We also looked at the human climate change fingerprint on the damages associated with Hurricane Harvey that hit Houston, Texas, in 2017, which were strongly driven by torrential rain and extensive flooding.

Previously published attribution studies, each using independent methods, found good agreement on attributable changes in the rainfall associated with Harvey: these conclusions formed the basis of our cost estimates. The results are striking: we estimate that around US$67bn of the Hurricane’s overall US$90bn are associated with climate change.

This is a far higher estimate than that which would be obtained from conventional economic models for the cost of climate change in the US, such as in the model built by Nobel Prize winner William Nordhaus. This model is underpinned by a 2017 study (pdf) from the US Environmental Protection Agency on the “social cost of carbon” – the financial damages caused by every additional tonne of carbon emitted into the atmosphere. Nordhaus’s model predicts total economic costs to the US economy in 2017, from climate change, to be around US$20bn.

Read more.

Authors:

Prof Dave Frame, director of the New Zealand Climate Change Research Institute at Victoria University of Wellington

Dr Suzanne Rosier, a climate scientist at the National Institute of Water and Atmospheric Research in New Zealand

Prof Ilan Noy, chair in the economics of disasters and climate change at Victoria University of Wellington

Dr Luke Harrington, a postdoctoral research assistant at the Environmental Change Institute at the University of Oxford