May 31, 2011

Weather Report

The recent earthquake in Japan and the tornado in Alabama highlighted the often devastating toll of natural disasters. Researcher Solomon Hsiang reveals one cost that often goes uncounted.

Betsy Wiesendanger

Tropical cyclones, those swirling masses of air that develop over oceans and cause massive destruction when they slam into land, have been a constant menace throughout history. Christopher Columbus wrote of sheltering his fleet from one in 1494, and in 1704 English author Daniel Defoe gathered eyewitness accounts in a book called The Storm. Today, scientists continue to grapple with predicting where and when cyclones will hit and how best to contain the damage.

Solomon M. Hsiang, who received his PhD from the School of International Affairs at Columbia University in May, views tropical cyclones through a slightly different prism. His latest research probes the question of how vulnerable — in terms of deaths, property damages, and income — different countries are. The answer is important, he says, because “if we want policies that reduce risk, we need to know what the risks are.”

Hsiang and his coauthor, Daiju Narita of the Kiel Institute for the World Economy in Germany, reconstructed the exposure of 233 countries to every tropical cyclone on the planet between 1950 and 2008. By holding the intensity of the cyclones constant, the team compared changes over time in revenue losses, damages, and deaths from cyclones. The results show that property damage as a fraction of GDP has gone down 10 percent a year, and the risk of dying in a cyclone has been reduced by 5 percent a year. In other words, nations around the globe are getting better at dealing with the effects of heavy weather. But there is one vulnerability being overlooked: agricultural losses.

“Researchers haven’t looked as closely at agricultural damage, perhaps because most developed nations are reducing their reliance on agriculture,” Hsiang says. But Hsiang and Narita found that, in fact, growth in agriculture declined. In other words, if income from agriculture normally rises 5 percent per year, the growth would be much smaller — perhaps 1 or 2 percent — in the aftermath of a tropical storm.

That finding has implications for policymakers. “Governments may not want to subsidize these risks, so the question is how do you insure against those losses?” Hsiang says. Government bodies could create a public cyclone insurance plan, for example, or offer incentives to private insurers to create such plans, he says.

Hsiang’s findings also point the way toward opportunities for private business. In Japan, for example, farmers protect their crops by wrapping them in giant tarps, an idea that could take hold in other countries. Better early warning systems would also help limit crop losses. Says Hsiang, “More than two billion people and their livelihoods are exposed to cyclone risk. We’re talking about an issue with real consequence. By carefully using data, we’re understanding how and where we should focus our efforts to design concrete solutions.”

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