how did the tropical cyclone impact the economy of florence

J Dev Econ 111:92106, Fetzer T (2020) Can workfare programs moderate conflict? The agriculture, hunting, forestry, and fishing sector aggregate first depicts negative growth rates but then quickly recovers after four years. http://data.un.org/Explorer.aspx?d=SNAAMA, University of East Anglia Climatic Research Unit, Harris IC, Jones PD (2017) CRU TS4.01: climatic research unit (CRU) time-series (TS) version 4.01 of high-resolution gridded data of month-by-month variation in climate (Jan. 1901Dec. However, one year later, as shown in Fig. So unfortunately, WA can expect regular cyclone impacts even as the climate . It is not empirically clear how long past tropical cyclones influence present economic growth rates. Furthermore, the results of the randomization test show that the \(H_0\) of no effect of tropical cyclone damage can be rejected at the 1% and 5% level of confidence for the agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels sectors, respectively. This allows me to analyze whether any key sectors exist that, if damaged, result in direct damage of other sectors. 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 \(t-1\). Based on damage estimates from EM-DAT, the authors find a negative effect for the agricultural and a positive effect for the industrial sector. The coefficients are interpreted by a one standard deviation increase in tropical cyclone damage (above zero).Footnote 24 For example, due to a standard deviation increase of tropical cyclone damage, the manufacturing sectors use -0.66% less input from the construction sector aggregate relative to the average InputOutput coefficient (0.0045) to produce one unit of output. Most worryingly, the majority of all sectors experience delayed negative effects underpinning how far away the international community remains from a build-back better or recovery to trend situation for tropical cyclone-affected economies. 2018) or exposed area (Hsiang and Jina 2014) to weight the respective physical intensities of tropical cyclones. J Dev Econ 97(1):130141, Terry JP (2007) Tropical cyclones: climatology and impacts in the South Pacific. The tests are conducted with the STATA command parmest (Newson 1998). These regions include East Asia and Pacific, Europe and Central Asia, Latin America and Caribbean, Middle East and North Africa, North America, South Asia, and Sub-Saharan Africa. However, one disadvantage of the EORA26 data set is that parts of the data are estimated and not measured. These factors are a decrease in the forward speed of a storm, increased intensity, and more water vapor in the atmosphere. J Econ Geogra 20(3):857877, NHC (2016) National hurricane center forecast verification. Details of How did the tropical cyclone eloise impact the environment? Since climatological impacts are most likely nonlinear, I also include squared precipitation and temperature in a further robustness test. Pictured: The East Coast of the U.S. and the Gulf of Mexico viewed by satellite as Hurricane Florence made landfall on September 14. eSwatini also experienced rainfall.. In the first test, I introduce a variable which counts the yearly frequency of tropical cyclones above 92 km/h per country (see Appendix Table 40 and Figs. I decide not to use the WIOD database because its country sample is not very exposed to tropical cyclones. First, I run two randomization tests: a Placebo test by using leads instead of the contemporaneous measure of the damage variable and a Fisher randomization test, where I randomly permute the years.Footnote 29 Second, to rule out potential omitted variable biases, I include additional climatological variables (precipitation and temperature) and a set of socioeconomic variables (population growth rate, economic openness, the growth rate of the gross capital formation, and logged per capita value added of the respective sector).Footnote 30 Third, I test different trend specifications: region-specific, nonlinear, and no trends at all. Tropical cyclones are compact, circular storms, generally some 320 km (200 miles) in diameter, whose winds swirl around a central region of low atmospheric pressure. Color intensities indicate p values according to: \(p<0.01\), \(p<0.05\), \(p<0.1\). A study led by Kevin Reed, PhD, Assistant Professor in the School of Marine and Atmospheric Sciences (SoMAS) at Stony Brook University, and published in Science Advances, found that Hurricane. \end{array}\right. } The different economic activities are classified as follows with the respective ISIC codes given in parentheses: agriculture, hunting, forestry, and fishing (A&B); mining, and utilities (C&E); manufacturing (D); construction (F); wholesale, retail trade, restaurants, and hotels (GH); transport, storage, and communication (I); other activities (JP), which include, inter alia, the financial and government sector. 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. Finally, the standard errors \(\epsilon _{i,t}\) could be biased by the autocorrelation of unobservable omitted variables (Hsiang 2016). To quantify the destructiveness of tropical cyclones, I construct a new damage measure based on meteorological data weighted by different exposure of the sectors. He finds a negative effect for the ISIC sectors agriculture, hunting, forestry, and fishing (A&B), mining, and utilities (C&E), wholesale, retail trade, restaurants, and hotels (GH), but a positive effect for the construction sector (F). All weights are available in the HYDE 3.2 data set (Klein Goldewijk etal. These empirical studies all share that they use firm-level data to draw conclusions on upstream and downstream production disruptions. A damage function that takes into account only the exposed population would underestimate the damage caused to the agricultural sector, given the large unpopulated but agriculturally used areas in the north and west of Australia. With this paper, I close this research gap by using an InputOutput panel data set to analyze potential sectoral interactions after the occurrence of a tropical cyclone. The South Pacific has recently been hit by particularly destructive cyclones like Winston and Pam. Sept. 16: Some areas receive as much as 34 inches of rain from Sept. 13 to Sept. 16. The results indicate that the policies should focus on the direct costs of tropical cyclones. Earth Syst Sci Data 9(2):927953, Klomp JG, Valckx K (2014) Natural disasters and economic growth: a meta-analysis. Evidence from developing countries. The sample is larger than the maximum size of recognized sovereign states as it also includes quasi-autonomous countries such as the Marshall Islands, if data are provided for them by the UNSD. J Environ Econ Manag 98:102252, Elsner JB, Kossin JP, Jagger TH (2008) The increasing intensity of the strongest tropical cyclones. The storm is expected to affect Duke Energy's 1,870 megawatt (MW) Brunswick and 932MW Harris nuclear plants in North Carolina, as well as potentially the 1,676MW Surry plant in Virginia, owned by Dominion Energy. For the sector aggregate wholesale, retail trade, restaurants, and hotels, a one standard deviation increase in tropical cyclone damage cause a decrease of \(-\,1.16\) percentage points of the annual per capita growth rate. Additionally, this finding undermines the urgency to analyze past influences beyond one or two years when examining the economic impacts of natural disasters. Figure 7 illustrates the connections of significant changes of the InputOutput coefficient together with the effect size relative to the sample average of the respective InputOutput coefficients in parentheses (in %) resulting from model 6. 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. This cost could climb higher as many rivers have yet to crest and may yet cause additional flooding. Econ J 122(559):6491, Dell M, Jones BF, Olken BA (2014) What do we learn from the weather? Notes InputOutput coefficients show how much input one sector needs to produce one unit of output. Tropical cyclones are immensely powerful and can travel up to speeds of 65 km/h. J Dev Econ 88(2):221231, Onuma H, Shin KJ, Managi S (2020) Short-, medium-, and long-term growth impacts of catastrophic and non-catastrophic natural disasters. In contrast to Eq. The procedure is hierarchical and reaches from other official governmental publications over publications from other international organizations to the usage of data from commercial providers (United Nations Statistical Division 2015b). Google Scholar, Kousky C (2014) Informing climate adaptation: a review of the economic costs of natural disasters. The radius of maximum wind (R, in km) is related to the latitude (L) of the respective raw data tropical cyclone position in the following way: Since the tropical cyclone data are available at global coverage since 1950, I will extend my database later for further specifications. \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. Economics of Disasters and Climate Change (pp. Appendix A.3 provides a more detailed description of the composition of the individual ISIC categories. Cyclone Cheneso. Moreover, I include time fixed effects \(\delta _t\) to account for time trends and other events common to all countries in the sample. During 6 February, the Australian Bureau of Meteorology (BoM) reported that the tropical low had developed into a Category 1-cyclone on the Australian scale . Freddy has finally been declared over by the French Meteorological service. Additionally, tropical cyclone intensity is measured by remote sensing methods and other meteorological measurements. Concurrently, the construction sector demands significantly more input (1.84%) from the agriculture, hunting, forestry, and fishing sector. This is a well-established method (Strobl 2012; Heinen etal. One reason could be that the destruction of productive capital outweighs the higher number of orders. The findings can help them to identify the sectors for which they must reduce disaster risk. Nevertheless, it unveils the importance of the manufacturing sectors, as already demonstrated by their strong intersectoral connection in Fig. How did the Tropical Cyclone Florence impact the people communities? How did the tropical cyclone impact the people communities? 4. (2012) investigate the effect of natural disasters on three sectors (agriculture, manufacturing, service) in a global sample for the period 19612005. Positive effects include, for instance, as a consequence of the destruction of capital, that the marginal productivity of capital increases, making it more attractive to invest in capital in the affected area (Klomp and Valckx 2014). 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. Impacts of tropical storms Buildings and bridges can be destroyed, people can get into difficulties in the water, and roads and railways can become damaged. Rev Econo Stat 101, Botzen WJW, Deschenes O, Sanders M (2019) The economic impacts of natural disasters: a review of models and empirical studies. Circle diameter is proportional to the average sectoral share on total GDP. The storm started to form as the result of an area of low pressure over Western Africa. Additionally, it is unexplained how the sectors are interconnected and if their structural dependence changes. Section 5 concludes with a discussion of the results and highlights policy implications. Consequently, for each grid point g, a wind speed S is calculated depending on the maximum sustained wind speed (M), the forward speed (T), the distance (D) from the storm center, and the radius of the maximum wind (R)Footnote 8: As a result, I generate hourly wind fields for each of the 7814 tropical cyclones in my sample period (19702015).Footnote 9 Figure 1 illustrates the resulting modeled wind fields for Hurricane Ike in 2008 on its way to the U.S. coast. Therefore, they take 5-year averages of the number of affected people normalized by the total population as main explanatory variable. At first, the circulation was ill-defined, but by the evening and overnight, persistent convection had occurred and was beginning to show signs of better organization. The storm will likely damage homes. Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013). Therefore, I re-estimate the results of Eqs. This corresponds to a mean annual global loss of USD 16.7 billion (measured in constant 2005 USD) for the sample average. Provided by the Springer Nature SharedIt content-sharing initiative, Over 10 million scientific documents at your fingertips, Not logged in Furthermore, only a minority of studies explicitly investigate the disasters influences on sectoral economic development. http://hdl.handle.net/10986/2512, Yang D (2008) Coping with disaster: the impact of hurricanes on international financial flows, 19702002. The country fixed effects \(\theta _i\) control for unobservable time-invariant country-specific effects, such as culture, institutional background, and geographic location. Fifteen thousand people were housed in temporary shelters in North Carolina. The analysis is conducted on a country-year level. I also checked for different lag lengths, but could hardly find any effect above a lag length of five years. The storm currently has a maximum sustained wind speed of 25 mph and is located 105 miles west-northwest of New York City at the time of publication, as reported by CBS News. In consequence to tropical cyclone damage, less tourists visit affected countries (Hsiang 2010), since they perceive these destinations as too risky to travel to (Forster etal. The gray shaded area specifies the respective 95% confidence bands, and the red line depicts the connected estimates. In contrast to this, the no recovery hypothesis states that natural disasters can lead to a permanent decrease of the income level without the prospect of reaching the pre-disaster growth path again.Footnote 1 This could result from a situation where recovery measures are not effectively implemented or where various negative income effects accumulate over time (Hsiang and Jina 2014; Onuma etal. I expand their approach by not looking at overall GDP but at disaggregated GDP responses for seven sectoral aggregates. Ann Rev Resour Econ 8(1):4375, Hsiang SM, Jina AS (2014) The causal effect of environmental catastrophe on long-run economic growth: evidence from 6,700 cyclones. 4, I introduce a lagged dependent variable, since I suspect a strong path dependence of the InputOutput coefficient, i.e., most sectors plan their inputs at least one period ahead. 2016). Furthermore, although the manufacturing sector shows no direct monetary damage, it is responsible for several changes in the production schemes of other sectors, leading to a monetary downturn in the mining and utilities (C&E) sectoral aggregate. Globally they are among the most destructive natural hazards.
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