Working Paper: NBER ID: w12813
Authors: William D. Nordhaus
Abstract: The year 2005 brought record numbers of hurricanes and storm damages to the United States. Was this a foretaste of increasingly destructive hurricanes in an era of global warming? This study examines the economic impacts of U.S. hurricanes. The major conclusions are the following: First, there appears to be an increase in the frequency and intensity of tropical cyclones in the North Atlantic. Second, there are substantial vulnerabilities to intense hurricanes in the Atlantic coastal United States. Damages appear to rise with the eighth power of maximum wind speed. Third, greenhouse warming is likely to lead to stronger hurricanes, but the evidence on hurricane frequency is unclear. We estimate that the average annual U.S. hurricane damages will increase by $8 billion at 2005 incomes (0.06 percent of GDP) due to global warming. However, this number may be underestimated by current storm models. Fourth, 2005 appears to have been a quadruple outlier, involving a record number of North Atlantic tropical cyclones, a large fraction of intense storms, a large fraction of the intense storms making landfall in the United States, and an intense storm hitting the most vulnerable high-value region in the country.
Keywords: No keywords provided
JEL Codes: Q0; Q5; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in sea surface temperature (SST) (O56) | increase in frequency and intensity of hurricanes (Q54) |
| increase in frequency and intensity of hurricanes (Q54) | increase in hurricane damages (Q54) |
| maximum wind speed (Q54) | increase in hurricane damages (Q54) |
| global warming (Q54) | increase in strength of hurricanes (Q54) |
| global warming (Q54) | increase in average annual hurricane damages in the U.S. (Q54) |
| rising sea surface temperatures (SST) (Q54) | increase in hurricane damages (Q54) |
| population migration and rising housing values (R23) | bias in hurricane damage estimates (H84) |