Climate Change: Hotter, Wetter, Windier and Costlier
Business + Economy

Climate Change: Hotter, Wetter, Windier and Costlier

It’s not your imagination. The weather in lots of places is getting hotter, windier, and weirder. In September, New York City was hit by its third tornado in the past five years, unprecedented in more than a century of weather records.

For a few minutes on Sept. 16, a macro-burst carved a swath of tree-felling, roof-lifting destruction through Brooklyn and Queens. Remarkably, the storm killed only one bystander. Estimates put the cost of damage from the storm at over $27 million, not including the loss of thousands of city trees.

An unprecedented heat wave and severe drought conditions this summer fueled wild fires in Russia, causing hundreds of deaths and some $15 billion in property loss. Later in the summer, Pakistan experienced cataclysmic flooding, displacing millions and doing some $9.5 billion in damage to housing, infrastructure and farm fields.

Some say these events are part of a normal weather cycle, others say it’s a sign of permanent climate change. Either way, it’s a multi-billion dollar problem. Globally, insured losses from weather events have jumped to an average $27 billion annually from $5 billion over the past 40 years, adjusted for inflation. While rising property values account for part of the increase, a growing share is driven by the intensification and rising frequency of weather disasters, according to an assessment of insured property damage by SwissRe, a Zurich-based reinsurance provider.

According to the Congressional Budget Office, Washington has steadily increased funding for climate-related work over the past decade, from $4 billion in 1998 to $7.5 billion in 2009. Including one-time programs worth $35.7 billion as part of last year’s economic stimulus program, climate-focused funding totaled $99 billion from 1998 through 2009, in 2009 dollars. The bulk of Washington’s climate spending is focused on scientific research and efforts to mitigate further increases in greenhouse gases, through development of alternative energy technologies. Some newly elected Republican representatives have vowed to re-open debate on climate science and obstruct climate policy in the coming year.

“When a road bridge over a stream is washed out
from flooding,” he said, “state engineers will
have to rebuild it stronger and higher, planning
for worse, more frequent floods.”

State and local planners more directly face the challenge of adapting to a changing climate, while also dealing with severe budget constraints. Although it’s difficult to calculate exact dollar amounts because expenditures are allocated to many different departments, local public spending on roads, buildings and other infrastructure is rising as building standards are toughened to meet extreme climate conditions in the future. In New York State, for instance, engineers are addressing the question of how to upgrade facilities designed to last decades, said Alan Belensz, Director of the New York State Office of Climate Change. “When a road bridge over a stream is washed out from flooding,” he said, “state engineers will have to rebuild it stronger and higher, planning for worse, more frequent floods.”

Although average year-round temperatures nationally have ticked up by just a couple of degrees Fahrenheit in the past half century, New York City this past summer set a record with 39 days at over 90°F. Newark, N.J., just across the Hudson River, had it even worse, with 52 days over that mark, contributing to heat-related deaths and the threat of blackouts. Rain patterns are in flux too. Some regions, such as the mid Atlantic, are receiving more rain than historical averages while others, such as the Southwest, are facing sustained drought conditions. Nationwide, the volume of rain in the heaviest downpours has increased by 20 percent over the past century.

With $875 billion in coastal properties and the expectation of worsening hurricanes, Florida is ground zero for climate change risk. Hurricane Andrew — which in 1992 hit southern Florida with sustained winds of 175 miles per hour and storm surges of 17 feet — resulted in $38 billion in total damages, including both property loss and reduced economic activity.

After the clean up, private insurers sought to boost rates, particularly for high-risk properties. They were shot down by state regulators in Florida, although they were successful in other states along the East Coast. In response, most large property insurers withdrew from the Florida market. To fill the void, the publicly-funded Citizens Property Insurance Corp. was created. But political priorities, rather than market realities, have led to premium rates considered too low to cover underlying property values. In 2009, Florida’s system of public insurance was estimated to face some $18 billion in unfunded liabilities. In the event of a catastrophic hurricane, taxpayers would face the bill.

By 2030, the value of possible property losses alone due to an extreme weather event is forecast to nearly double to $33 billion in southern Florida, including Broward, Miami-Dade, and Palm Beach Counties. Nearly half this increase is expected to come from the intensification of damage related to climate change, with the remainder of the increase from economic growth, according to a joint report by McKinsey & Co., Standard Chartered Bank, Swiss Re, and a group of non-governmental organizations.

Sea level in New York is expected to rise 5-10
inches by the 2020s, and 12-29 inches more by
2050 which could quintuple the frequency of
what would today be considered a 100-year storm.

With such big amounts at stake, Florida’s Miami-Dade County has used federal funds to fortify buildings and hurricane shelters. Nationally, the Federal Highway Administration encourages and funds the inclusion of climate change in plans for metropolitan areas. In New Orleans, the Army Corps of Engineers boosted the height of rebuilt levees; major coastal highway bridges and roads were rebuilt well above anticipated future storm levels. Beset by a sustained drought that has cut supplies of fresh water, Phoenix, Ariz. planners now factor in long-term predictions of reduced rainfall in regional policy.

In New York City’s five boroughs, plus Long Island, the value of privately-insured properties vulnerable to coastal storm damage is $2.4 trillion. With average air temperatures set to rise by up to 3°F during the next decade, and by up to 5 degrees by mid century,  precipitation will increase proportionately. As a result sea level in New York is expected to rise 5-10 inches by the 2020s, and 12-29 inches more by 2050 which could quintuple the frequency of what would today be considered a 100-year storm.

“In the next century, the city will feel a lot like Savannah, Georgia, today,” says Gary Yohe, an economist at Wesleyan University and co-author of the report. “People live in Savannah, of course, but it’s going to be a very different kind of climate for New York, and a very different way of life.”