Glossarydefinition of term: value added-gross. In addition to damaging wind speed, salty sea spread and storm surge can cause salinization of the soil, leaving it useless for cultivation. To analyze the effect of tropical cyclones in the longer run, I introduced lags of the tropical cyclone damage variable to the main specification 4. The second most indirectly affected sector is the construction sector. The coefficients show the increase of the respective damage variable by one standard deviation. I also tested for lagged cumulative effects. The results of the InputOutput analysis, summarized in Appendix A.6.2, are a little less robust. Alfred-Weber-Institute for Economics, Heidelberg University, Bergheimerstrasse 58, Heidelberg, 69115, Germany, You can also search for this author in Mon Weather Rev 142(10):38813899, Sieg T, Schinko T, Vogel K, Mechler R, Merz B, Kreibich H (2019) Integrated assessment of short-term direct and indirect economic flood impacts including uncertainty quantification. World Dev 40(7):13171336, Mendelsohn R, Emanuel K, Chonabayashi S, Bakkensen L (2012) The impact of climate change on global tropical cyclone damage. Tropical Cyclone Eloise, which hit southeastern Africa in January 2021, caused widespread flooding and landslides, resulting in at least 21 deaths and. Earth Syst Sci Data 9(2):927953, Klomp JG, Valckx K (2014) Natural disasters and economic growth: a meta-analysis. Finally, I test two sub-samples, one with all potential outliers and one where I include only the countries exposed to tropical cyclones.Footnote 32. The result offers a better understanding of the finding of Hsiang & Jina (2014), who show that tropical cyclones have long-lasting negative impacts on GDP growth by demonstrating which sectors are responsible for the long-lasting GDP downturn that they identify. As tropical cyclones are exogenous to sectoral economic growth, the greatest threat to causal identification could arise by omitting important climatic variables that are correlated with tropical cyclones (Auffhammer etal. For the agricultural sector, I use the fraction of exposed agricultural land, while for the remaining sectors, I use the gridded population. 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). Finally, the standard errors \(\epsilon _{i,t}\) could be biased by the autocorrelation of unobservable omitted variables (Hsiang 2016). The build-back-better hypothesis describes a situation where natural disasters first trigger a downturn of the economy, which is then followed by a positive stimulus, leading to a higher growth path than in the pre-disaster period. Color intensities indicate p values according to: \(p<0.01\), \(p<0.05\), \(p<0.1\). Moreover, I include time fixed effects \(\delta _t\) to account for time trends and other events common to all countries in the sample. About how did tropical cyclone eloise impact the economy. However, one disadvantage of the EORA26 data set is that parts of the data are estimated and not measured. Out of 49 parameter estimates, only 12 are significantly different from zero.Footnote 26 As expected, the heavily damaged agriculture, hunting, forestry, and fishing sector aggregate experiences the most changes. The storm was named by the Australian Bureau of Meteorology on 4 February and and finally came to an end on 14 March. Acemoglu D, Carvalho VM, Ozdaglar A, Tahbaz-Salehi A (2012) The network origins of aggregate fluctuations. As investors kept their eyes on the weather and its potential for destruction, estimates emerged of up to $27 billion in hurricane damage. 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. 2014). Additionally, I cluster the standard errors at broader regional levels as a further robustness test. 3, their intensity and frequency are spread considerably between years and countries. The underlying estimations can be found in Tables 1420 in Appendix A.5. I find a significantly negative influence of tropical cyclones on two sector aggregates including agriculture, as well as trade and tourism. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. Eur Econ Rev 101:441458, Chhibber A, Laajaj R (2008) Disasters, climate change and economic development in Sub-Saharan Africa: lessons and directions. The increase in tropical cyclone losses has led to concern that anthropogenic climate change is contributing to this trend. Table 1 presents the results of the main specification for each of the seven annual sectoral GDP per capita growth rates. Gross value added is defined by the UNSD as the value of output less the value of intermediate consumption (United Nations Statistical Division 2015a). However, little is known about the empirical InputOutput effects across broader sectors after a natural disaster shock. Cyclone Eloise. I take advantage of the International Best Track Archive for Climate Stewardship (IBTrACS) provided by the National Oceanic and Atmospheric Administration (Knapp etal. 2015). Below is the link to the electronic supplementary material. Slider with three articles shown per slide. I also explore the effects on the 26 individual sectors later in this paper. I decide not to use the WIOD database because its country sample is not very exposed to tropical cyclones. J Appl Meteorol Climatol 52(8):16881697, Blanc E, Strobl E (2016) Assessing the impact of typhoons on rice production in the Philippines. To address the varying economic exposure of affected areas, studies have used population (Strobl 2012), nightlight intensity (Heinen etal. This means that if a grid cell of a country was exposed to two storms in oneyear, only the physically more intense storm is considered. Each year the impacts of tropical cyclones and other weather, climate and water extremes around the Earth give rise to multiple casualties and significant damage to property and infrastructure, with adverse economic consequences for communities that can persist for many years. Ecol Econ 85:105115, Schreck CJ, Knapp KR, Kossin JP (2014) The impact of best track discrepancies on global tropical cyclone climatologies using IBTrACS. 4 and 6 with the population weighted damage for the agricultural sectoral aggregate. It rather points to the presence of (delayed) negative effects of tropical cyclones from which the sectors cannot recover. Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolinas and Georgia. The analysis of the past influences of tropical cyclone damage demonstrates that the sectoral growth response following a tropical cyclone is a complex undertaking. Given these positive demand effects, one may ask why a significant contemporaneous positive direct effect for the construction sector cannot be seen. 4. (2012) only differentiate between three sectors: agriculture, manufacturing, and service. This behavior most likely speaks for an enduring risk adjustment of tourists. More recent studies have started to use physical data, such as observed wind speeds, to generate a more objective damage function for the impacts of tropical cyclones (e.g., Hsiang 2010; Strobl 2011; Felbermayr and Grschl 2014; Bakkensen etal. J Urban Econ 88:5066, Elliott RJ, Liu Y, Strobl E, Tong M (2019) Estimating the direct and indirect impact of typhoons on plant performance: evidence from Chinese manufacturers. This paper contributes to two strands of the literature. Therefore, I include the mean level of temperature and precipitation as additional climate controls in a further specification. They can best be summarized by three possible hypotheses: recovery to trend, build-back-better, and no recovery (Chhibber and Laajaj 2008). Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. I follow Emanuel (2011) by including the cube of wind speed above a cut-off wind speed of 92 km/h. The dynamic analysis reveals that past tropical cyclones have a negative influence on the majority of sectors providing evidence for the no recovery hypothesis discussed in the literature. 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. 2023 Springer Nature Switzerland AG. Once it makes landfill, Florence is expected to lash coastal communities with 130-mph winds and to dump several feet of water. Once the surface winds have reached a maximum sustained speed of 39 mph (63 km/h), it is classified as a tropical storm. 2019), Felbermayr and Grschl (2014) show that storms from the previous fiveyears can also have a negative growth effect. Read the InFocus blog post on climate change and flooding Originating from a tropical wave over West Africa, Florence quickly organized upon its emergence over the Atlantic Ocean. 2012). I expand their approach by not looking at overall GDP but at disaggregated GDP responses for seven sectoral aggregates. 0.1\(^{\circ }\) corresponds to approximately 10km at the equator. I tested my data extensively for outliers having a high influence on my results. 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. Second and most importantly, I contribute to the literature on InputOutput analysis of natural disasters. J Econ Geogra 20(3):857877, NHC (2016) National hurricane center forecast verification. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. Since climatological impacts are most likely nonlinear, I also include squared precipitation and temperature in a further robustness test. They are responsible for a demand shock in the mining and quarrying sectoral aggregate, leading to delayed negative growth effects being persistent over 10years. Natural Hazard-Induced Disasters and Production Efficiency: Moving Closer to or Further from the Frontier? Part of Springer Nature. As per the guidelines of the World . The new climate-economy literature. The storm damaged and destroyed famand, vital infrastructure and thousands of homes, dealing another devastating blow to families still trying to put their lives together after. The purpose of this study is to advance our understanding of anthropogenic influences on tropical cyclones by quantifying the impact of climate change so far, and in the future, on the intensity . 2016). J Dev Econ 111:92106, Fetzer T (2020) Can workfare programs moderate conflict? 2019). Power cables and telephone lines come down, crops are ruined, and water and sewage supplies are affected. 5. 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. Mohan (2017) provides further evidence that in Caribbean countries agricultural crops are more severely affected by hurricanes compared to livestock. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Torrential rainfall can cause serious in-land flooding, thereby augmenting the risk coming from storm surges (Terry 2007). 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. Appendix A.3 provides a more detailed description of the composition of the individual ISIC categories. 2013). As climate change is warming ocean temperatures, there is potentially more of this fuel available. Globally they are among the most destructive natural hazards. 2018) or exposed area (Hsiang and Jina 2014) to weight the respective physical intensities of tropical cyclones. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. What are 3 impacts of tropical cyclones? This is an improvement in comparison to Hsiang (2010) who only focuses on 26 Caribbean countries, which are highly exposed but only account for 11% of global GDP in 2015 (United Nations Statistical Division 2015c). 2014) remain. Put in relation to the sample average per capita growth rate (2.53%), the effect translates to a decrease of \(-46\)%. Tropical Cyclone Cheneso was a strong tropical cyclone that affected Madagascar in January 2023. Therefore, in this section, I investigate, by means of the InputOutput analysis, how the sectors change their interaction after a tropical cyclone has hit a country. 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. This approach follows Hsiang and Jina (2014) which analyze the accumulated long-term GDP growth effects of tropical cyclones worldwide. However, these growth rates are simply not high enough to reach the pre-disaster growth path. J Infrastruct Syst 7(1):112, Hallegatte S, Przyluski V (2010) The economics of natural disasters: concepts and methods. Fifteen thousand people were housed in temporary shelters in North Carolina. Agricultural land and population count in Australia, 2008. Before 2000, only decadal data are available. It demands more input from three other sector aggregates, while the manufacturing sectors use less input from it. 6: The manufacturing sectors ask significantly less input from it. - 103.17.108.37. 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. Cyclone Cheneso. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. Other basins have different names for the same phenomenon: tropical cyclone. (2018). The sum of these exposure weights \(w_{g,t-1}\) is divided by the total sum of the weights \(W_{i,t-1}\) in country i in period \(t-1\). As demonstrated in Fig. 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. Together with further control variables, Table 2 in Appendix A.4 lists the exact definition of all variables used. \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 . It is not empirically clear how long past tropical cyclones influence present economic growth rates. While there exists a lot of theoretical work on the importance of cross-sectional linkages in consequence of a shock (see e.g., Dupor 1999; Horvath 2000; Acemoglu etal. For storm surge damage this is not possible, since there exists no global data set so far. Sectoral GDP is defined as gross value added per sector aggregate and is collected for different economic activities following the International Standard Industrial Classification (ISIC) revision number 3.1. 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. Bull Am Meteorol Soc 101(3):E303E322, Korty R (2013) Hurricane (typhoon, cyclone). Asterisks and color intensities indicate p values according to: ***\(p<0.01\), **\(p<0.05\), *\(p<0.1\). Hence, I interpolate the data to generate yearly observations. Econometrica 80(5):19772016, Article Additionally, tropical cyclone intensity is measured by remote sensing methods and other meteorological measurements. 4. While some studies provide evidence of only a short-term economic impact of tropical cyclones (Bertinelli and Strobl 2013; Elliott etal. Consequently, \(\beta ^j\) is the coefficient of main interest in this specification. \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. The absolute size of this effect is approximately more than 2.5 times the size of the coefficient in the wholesale, retail trade, restaurants, and hotels sector aggregate. The damaging winds are responsible for serious destruction of buildings and vegetation. To underline the credibility of my regression analyses, I test the sensitivity of my results in various ways. The underlying estimations can be found in Tables 1213 in Appendix A.5. J Appl Meteorol Climatol 55(4):9931007, Boehm CE, Flaaen A, Pandalai-Nayar N (2019) Input linkages and the transmission of shocks: firm-level evidence from the 2011 Tohoku earthquake. The remainder of this paper is structured as follows: Sect. treasury department deputy general counsel, critical appreciation of the good morrow, police incident in islington today,
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