Insurers declared last year was the costliest on record for natural disasters, sparking media speculation that disasters and their costs would only grow more burdensome as the world warms.
While 2017 did see $330 billion in damages, mostly from hurricanes hitting the U.S., those losses should be put into context. When economic growth is taken into account, natural disaster costs have actually been declining.
That’s according to new data from University of Colorado professor Roger Pielke, Jr. Pielke’s been tracking natural disaster costs for years and has shown exactly why disaster costs should not be used to make arguments about global warming.
I updated my global disasters as pct of global GDP dataset using data from:@MunichRe (’90-’17)@AonBenfield (’00-’17)@WorldBank (GDP)@OMBPress (deflators)
From 1990-2017 losses as pct of GDP fell by about 1/3 (linear trend)
That’s good news
— Roger Pielke Jr. (@RogerPielkeJr) January 24, 2018
Natural disaster costs as a percentage of economic activity, or gross domestic product (GDP), have fallen by one-third since 1990.
However, nominal natural disasters costs from extreme events, including hurricanes, fires and earthquakes, has grown over time. Costs have grown because of inflation and also because of population growth.
The global population has exploded since 1990, and with that growth comes more houses and infrastructure in areas prone to disasters, like heavy rainfall, flooding, tornadoes and hurricanes. All the while, there’s no evidence natural disasters have become more frequent or intense.
Florida is often invoked as an example of this. Florida was hit by the “Labor Day” hurricane in 1935, the most intense storm to make U.S. landfall on record. The storm devastated the Florida Keys and killed more than 400 people, but only did $6 million in damage — indexed for inflation, that’s about $107 million.
In the wake of 2017’s Hurricane Irma, a less intense hurricane than “Labor Day,” Florida residents had filed $5.8 billion in insured losses by November, according to the Florida Office of Insurance Regulation.
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