$59 billion a year in global damages (EMDAT 2009) from 1990 through 2008, or 0.1 percent of world product in 2008. Tropical cyclones account for 44 percent, and fl oods 33 percent.
Even without climate change, economic development and population growth are expected to increase the baseline damages from extreme events over the next century (fi gure 6.1). If there is no conscious change in adapta- tion policies to extreme events, baseline damages without climate change are expected to triple to $185 billion a year from economic and popula- tion growth alone. Floods and tropical cyclones are expected to continue to be the prominent sources. But heat waves are expected to become more prominent.
There is widespread concern that climate change could increase future damages from extreme events (IPCC 2007a, IPCC 2007b, World Bank 2009). Earlier studies projected increased tropical cyclone activity alone might result in additional annual damages in the United States of $100 to $800 million6 and global annual damages by $630 million (Pearce and others 1996). More recent studies suggest that a doubling of greenhouse gas concentrations could increase tropical cyclone damage by 54 percent to 100 percent in the United States and double tropical cyclone damage glob- ally.7 Some studies of historic trends of extreme event insurance claims fi nd that extreme events are rising at a rapid and even exponential rate (Swiss Re 2006; Stern 2007). However, these trend line analyses do not separate changes in the exposed population and changes in the extreme events them- selves (Pielke and Downton 2000; Pielke and others 2008).
Analysis commissioned for this report uses an integrated assessment model combining science and economics to estimate the additional damage from hazards as a result of climate change.8 While the analysis attempted to estimate the additional damage from all hazards, the analysis of potential changes in the location, frequency, and intensity of future tropical cyclones
Chapter 6: Burgeoning Cities, Climate Change, and Climate-Induced Catastrophes 175
is the most complete. Box 6.1 explains the methodology used for tropical cyclones.
A few caveats:
• Aspects of the science remain uncertain. Although all climate models agree the planet will warm, they do not agree on the magnitude of the changes and how they will be distributed across the planet: the results are quite different across the climate models tested (box fi gure 6.1).
• The analysis does not measure all the impacts of climate change, just those of climate-related hazards.9
• The study reports only the direct damages from climate-related haz- ards. For example, the impacts on ecosystems are not measured. There are other indirect effects of disasters, which are diffi cult to measure, as discussed in chapter 2.
• The analysis does not address possible interactions with other effects from climate change. For example, although the tropical cyclone anal- ysis does take into account storm surge, it does not consider the inter- action between storm surge and sea level rise. Whether the interaction between a rise in sea level and storm surge is “additive” or “super additive” would depend on the assumptions about adaptation to sea level (for example, building sea walls where permissible or locating people out of harm’s way). Such interactions are an important area for future work.
Figure 6.1 Current (2008) and projected (2100) damages from extreme events without climate change
Note: Damages without climate change are projected to increase because of income and population growth. Source: Mendelsohn and Saher 2010.
Damages ($ billions) 60 50 40 30 20 10 0
Cold Drought Flood Heat Other
storms
Tropical cyclone
Box 6.1 Estimating additional damages from climate change-induced tropical cyclones The analysis begins with the A1B emission scenario that assumes a moderate mitigation program will stabilize concentrations at 720 ppm. Four climate models are then used to predict changes in climate by 2100. Because highly damaging tropical cyclones are so infrequent, it might take hun- dreds of years of actual data to be able to detect robust and statistically meaningful changes in the distributions of storm frequency and intensity from climate change. So for each climate scenario, tropical cyclones are predicted based on a specialized tropical cyclone model that simulates the creation, development, movement, and termination of storms (Emanuel, Sundararajan, and Wil- liams 2008). Tens of thousands of storms are simulated so that even small changes in the damage distribution can be detected. Most of the simulated cyclone “seedlings” (potential storms) never become tropical cyclones. The remaining events constitute the tropical cyclone climatology associ- ated with the projections of each particular global circulation model.
Climate change is predicted to have very different impacts on tropical cyclones across the globe. The intensity, frequency, and tracks of tropical cyclones are sensitive to a number of environmental conditions, not all of which change in the same direction when climate changes. For example, an increase in temperature increases tropical cyclone intensity, other things being equal, but wind shear can inhibit storm formation and development. Intensities and frequencies therefore change across the different climate models. Box fi gure 6.1 shows the percentage change of coastal power dissipa- tion, a measure of the potential destructiveness of tropical cyclones over the four models and fi ve ocean basins. For most of the climate models, the cyclone simulation indicates a small increase in the intensity of storms in the Atlantic and Northwest Pacifi c Oceans. One climate model predicts an increase in intensity at landfall in the North Indian Ocean and Southern Hemisphere Ocean but most of the models predict a decrease in intensity in these oceans or no effect at all. Note that increases (decreases) in storm intensity imply climate change causes damages (benefi ts).
Box fi gure 6.1 Intensity of tropical cyclones will vary over the fi ve ocean basins by 2100
Note: CNRM, ECHAM, GFDL, and MIROC are the climate models used for the projections. Source: World Bank staff, based on Emanuel, Sundararajan, and Williams 2008.
Change in landfall power (percent)
80 70 60 50 40 30 20 10 0 –10 –20 Atlantic Northeast Pacific Northwest Pacific
North Indian Southern hemisphere
Chapter 6: Burgeoning Cities, Climate Change, and Climate-Induced Catastrophes 177
• The analysis makes certain assumptions of what the world will look like in 100 years. Economic and population growth may be quite different.
• Relevant policies that would affect adaptation may also change. For example, policies that encourage (discourage) risky development in hazardous areas would increase (decrease) overall damages.
• International reporting of extreme events and damages remains uneven. As data sets improve, it will be possible to improve predic- tions of international damages.
With these qualifi cations in mind, the key fi ndings are as follows. Damages are expected to increase
Without climate change, expected tropical cyclone damages increase from $26 billion today to $55 billion by 2100 because of the growth in income and population.10 Climate change could add about $54 billion worth of tropical cyclone damages each year, doubling future baseline damage. The estimated increase in damages from climate change varies across climate models between $28 and $68 billion (or 51 to 124 percent of the future baseline). These estimates are sensitive to the elasticity between damages and income. If the income elasticity of damages were unitary (instead of 0.41, as estimated), future baseline damages become $195 billion and climate change adds about $178 billion––almost double the baseline damages. Averages mask extremes
The estimates of the above damages are in “expected value” terms per year. But the damages are not expected to come in a steady stream. Even with the
The damage function is estimated using an international data set of global hazard damages from 1960 to 2008 (EMDAT 2009). Damages per event are regressed on income per capita and population density to determine the sensitivity in different locations. The damage response to the intensity of a tropical cyclone was estimated using US data from the National Oceanic Atmospheric Administra- tion. Future damages (without climate change) are projected using predictions of future income and population. The estimate of climate change damage is the difference between the damage caused by all tropical storms in the future climate minus the damage caused by tropical cyclones in the current climate. Note that the fact that future baselines predict more people and capital will be in harm’s way implies that climate change will have larger effects. Empirical results described below reveal that cyclone damages are a highly nonlinear function of storm intensity. A 1.1 percent decline in mini- mum atmospheric pressure at sea level doubles the damages from tropical cyclones.
Box 6.1 Estimating additional damages from climate change-induced tropical cyclones
current climate, 10 percent of tropical cyclones are responsible for 90 per- cent of the expected damages. Even if climate does not change, damages will vary a great deal from year to year and decade to decade. Climate change is expected to skew the damage distribution of tropical cyclones and is likely to cause rare—but very powerful—tropical cyclones to become more common. With a warmed climate, the 10 percent of tropical cyclones that cause the most damage will be responsible for 93 percent of the expected damages.
Climate change “fattens the tail” of the tropical cyclone damage distri- bution. For the United States, destructive storms that would come every 38 to 480 years given the current climate, would come every 18 to 89 years with future climate change. Figure 6.2 illustrates this for one specifi c climate model (MIROC).11 Most of the cyclones with and without climate change involve damages in the tens of billions of dollars or less. These storms may become even less frequent with climate change. But, very rarely, a very powerful storm will strike a very vulnerable location causing damages up to a trillion dollars. This seemingly small shift in the tail of the distribution is shown as “return years,” which show how many years would elapse, on average, between occurrences of a storm causing a specifi c level of damage (fi gure 6.2). Even though very rare and damaging storms are part of today’s climate, they will become more frequent in a warmer climate. For example, using the future baseline, a $100 billion storm is estimated to happen once in a hundred years in the United States given the current climate. With a future warmed climate, it is expected to happen once in about 56 years. Figure 6.2 Climate change shortens the return period of large storms
Note: The fi gure shows the return period for tropical cyclones of different intensity in the United States for one
specifi c climate model (MIROC). A $100 billion storm is estimated to happen once in a 100 years in the United States given the current climate. With a future warmed climate, it is expected to happen once in about 56 years.
Source: Mendelsohn, Emanuel, and Chonabayashi 2010a.
Damage, log scale ($ billions)
10,000 1,000 100 10 1 0.1 0.01 10 56 1 100 1,000 Future Current
Return period, log scale (years)