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Natural Disasters Take a Toll on the US Economy: and it's Only Getting Worse

According to the US Department of Commerce's National Oceanic and Atmospheric Agency (NOAA), since 1980, the U.S. has sustained 219 weather and climate disasters where the overall damage costs reached or exceeded $1 billion (including adjustments based on the Consumer Price Index, as of December 2017). The cumulative costs for these 219 events exceed $1.5 trillion.

During 2017, the U.S. experienced a historic year of weather and climate disasters. NOAA has stated that 2017 was the second warmest year on record, with natural disasters costing the US economy $306 billion - $100 billion than the year before. It is estimated that approximately 1 in 8 Americans were affected by such disasters in just this one year. In total, the U.S. was impacted by 16 separate billion-dollar disaster events including: three tropical cyclones, eight severe storms, two inland floods, a crop freeze, drought, and wildfire.

 

When looking at natural disasters, it’s important to see a global picture, since most natural disasters - in both cause and effect - aren’t confined to geographic borders. The Economist has mapped increases in weather-related disasters, based on data from the United Nations, for a 20 year period. While it indicates such trends are affecting countries all over the world, it cites the United States as one of the most impacted countries in the world (alongside China, India, and the Philippines).

While natural disasters can't be altogether prevented, the cost associated with them (in terms of financial, infrastructure, and human costs) can be mitigated. However, individual Americans, families, communities, institutions, companies, and governments don’t often take the necessary measures to ensure the severity of such risks and hazards are lessened. As the wise American forefather Benjamin Franklin quoted: “An ounce of prevention is worth a pound of cure” (note: if you read the quote in its original context, it refers directly to the topic at hand).

While it’s impossible to fully quantify the return on investment on preparedness and mitigation efforts, there are some statistics that are exceptionally compelling. The Economist’s Economic Intelligence Unit offers a vast amount of macro and micro-economic data, as well as qualitative conclusions, demonstrating ROI on preventative and preparedness efforts regarding flooding in the United States. For example, the ROI on the Federal flood mitigation programs was 483% from 2005 through 2017. This was recently raised in January, 2018 to over 600% according to analysis from the National Institute of Building Sciences (NIBS), which examined 23 Federal programs and its conclusions are widely accepted. When you factor in the qualitative conclusions by the University of Colorado’s Natural Hazard Center, the ROI gets even greater when factoring in social dimensions.

There are a number of government-funded, privately-funded, and volunteer efforts that are working hard to prepare for and mitigate the potential consequences of such events, and with great success. We know that the loss of life resulting from such disasters have steadily been going down. This still doesn’t account for the number of injuries, displacement, psychological trauma, and other human costs, which have not necessarily been on the same downward trend. However, the number of efforts to address them have been increased worldwide.

 SummitET CEO, John Duda, moderating a panel discussion on preparedness.

SummitET CEO, John Duda, moderating a panel discussion on preparedness.

Its important to note that international and domestic agencies, confirmed by academic and research institutions are observing increases in climate-related disasters, resulting in economic and other losses - all based on hard data. What we know is that preparedness and mitigation efforts are effective. The probability that a natural disaster will affect you, your family, your business, and your community is rising - and significant. Therefore, if you haven’t started taking measures, now is the time to act.

So what can you do? There are a number of resources out there to help in developing plans, exercising them and preparing for the worst.

We also encourage you to follow us on Facebook, Twitter, and LinkedIn for up-to-date information and resources to help or to learn more about SummitET.


BlogChristine MooreComment