J Econ Geogr 19(2):373408, Cuaresma JC, Hlouskova J, Obersteiner M (2008) Natural disasters as creative destruction? Better post-disaster assistance is not the only required improvement; policymakers should also find ways to better prepare the affected sectors of their economy for possible effects of tropical cyclones before they strike. This allows me to analyze whether any key sectors exist that, if damaged, result in direct damage of other sectors. Sci Rep 9(1):20452322. Queensland has 20% of Australia's sugar cane production, but . How did Florence impact the economy? | how did tropical cyclone 2 contains a description of the data source, introduces the construction of the tropical cyclone damage measure, and presents descriptive statistics. 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 underlying estimations can be found in Tables 1420 in Appendix A.5. Furthermore, a shortage in the labor force can lead to a wage increase, which can serve as an incentive for workers from other regions to migrate to the affected region, also leading to a positive effect (Hallegatte and Przyluski 2010). 1.Environment . Furthermore, one can argue that only countries exposed to tropical cyclones are relevant for this analysis; therefore, Table 36 provides a regression of the main result for exposed countries only. Additionally, the GTAP database is not freely available and only covers a few years. 2632). To demonstrate the average intersectoral connections within my sample, Fig. Global warming has 'changed' spread of tropical cyclones around the world But those that do occur will be more intense and damaging. In order to examine tropical cyclones as exogenous weather shocks, I pursue a panel data approach with year and country fixed effects in a simple growth equation framework (Strobl 2012; Dell etal. Tropical Cyclone Cheneso was a strong tropical cyclone that affected Madagascar in January 2023. One major effort of this paper is to generate a new meaningful sectoral damage variable on a country-year level. Open Access funding enabled and organized by Projekt DEAL. Future weather. If the official data of the countries or regions are not available, the UNSD consults additional data sources. For large weather systems, the circulation pattern is in a counterclockwise direction in the Northern Hemisphere and a clockwise direction in the Southern Hemisphere. The sectoral GDP data originates from the United Nations Statistical Division (UNSD) (United Nations Statistical Division 2015b). 4. Even though, I thereby omit potential rainfall and storm surge damage, it is a common simplification in the literature (Hsiang 2010; Strobl 2011; Strobl 2012; Elliott etal. 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. 2632). 2017) at a spatial resolution of around \(10\,\times \,10\)km.Footnote 10 To avoid potential endogeneity concerns, I lag the respective weights by one period. Since climatological impacts are most likely nonlinear, I also include squared precipitation and temperature in a further robustness test. 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. Cyclones also can bring torrential rains that lead to flooding. 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). How did the tropical cyclone Florence impact the following ? However, the InputOutput analysis shows that production processes are sticky and indirect economic effects are limited. While the importance of the fishing sector for indirect tropical cyclones effects is a novel finding, it does not mean that other agricultural sectors do not exhibit negative direct effects.Footnote 28. To deal with this problem, I will re-estimate my regression models with Newey and West (1987) as well as spatial HAC standard errors (Hsiang 2010; Fetzer 2020), which allow for a temporal correlation of 10years and a spatial correlation of 1000 kilometer radius.Footnote 20. Weather Clim Soc 3(4):261268, Felbermayr G, Grschl J (2014) Naturally negative: the growth effects of natural disasters. Hurricane Florence was a powerful and long-lived Cape Verde hurricane that caused catastrophic damage in the Carolinas in September 2018, primarily as a result of freshwater flooding due to torrential rain. Econ J 129(619):13271342, He S (2017) Randomization inference with Stata: a guide and software. The damage estimates can be found in Table1. Across the Caribbean the economic costs of tropical cyclones amount to 2% of GDP annually since the 1950. The largest negative impacts can be attributed to the annual growth in the agriculture, hunting, forestry, and fishing sector aggregate, where a standard deviation increase in tropical cyclone damage is associated with a decrease of 262 percentage points of the annual sectoral growth rate. 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. Additionally, a new damage measure is developed that considers the varying levels of exposure of different sectors. Cyclone Ingrid - Wikipedia Both variables are associated with the occurrence of tropical cyclones since they only form when water temperatures exceed 26 \(^{\circ }\)C and torrential rainfalls usually constitute part of them. 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. Figure 6 demonstrates that three out of seven sectoral aggregates suffer from delayed negative impacts of tropical cyclones. Additionally, it seems that the fishing sector is responsible for the negative supply shock in the agriculture, hunting, forestry, and fishing sector aggregate. Perhaps the most challenging task is to identify critical sectors that may be responsible for widespread spillover effects leading to substantial modifications in other sectors production input schemes. Technical report, Universit catholique de Louvain (UCL). Springer, Dordrecht, New York, pp 481494, Chapter (2019) demonstrate that there exist a short-term productivity efficiency increase after damaging hurricanes in the Caribbean. Compared to the existing literature, the non-existing of a direct positive contemporaneous response of the construction sector is a new finding. While the distribution reveals that on average, geographically smaller countries, such as Hong Kong, Dominica or Jamaica, have a higher damage, there exists a difference between both damage measures, even for the highly exposed countries. 1315 show the cumulative results for different lag lengths (5, 10, 15), and Tables 1315 exhibit the underlying estimations. However, to control for possible rainfall damage, I conduct a robustness test which includes a variable for precipitation (see Appendix Table 24 and and Figs. The start of the arrow shows the input, and the end denotes the respective output. The outcomes of this study can serve as a guide for local governments and international organizations to revise and refine their adaptation and mitigation strategies. The impact of weather on economic growth and its production factors, Climate change and developing country growth: the cases of Malawi, Mozambique, and Zambia, A framework for assessing the economic impacts of Arctic change, https://github.com/davidnbresch/climada/blob/master/docs/climada_manual.pdf, https://www.munichre.com/en/solutions/for-industry-clients/natcatservice.html, https://ideas.repec.org/c/boc/bocode/s352601.html, http://www.nhc.noaa.gov/verification/verify5.shtml, https://unstats.un.org/unsd/snaama/Metadata/Glossary#, https://unstats.un.org/unsd/snaama/assets/pdf/methodology.pdf, http://data.un.org/Explorer.aspx?d=SNAAMA, http://creativecommons.org/licenses/by/4.0/. NBER Working Paper 20352. http://www.nber.org/papers/w20352.pdf, Islam N (1995) Growth empirics: a panel data approach. They can best be summarized by three possible hypotheses: recovery to trend, build-back-better, and no recovery (Chhibber and Laajaj 2008). Alfred-Weber-Institute for Economics, Heidelberg University, Bergheimerstrasse 58, Heidelberg, 69115, Germany, You can also search for this author in Taking all considerations together, I calculate the following tropical cyclone damage for each country i and year t: where \(w_{g,t-1}\) are the exposure weights, agricultural land, or population, in grid g in period \(t-1\). J Appl Meteorol Climatol 55(4):9931007, Boehm CE, Flaaen A, Pandalai-Nayar N (2019) Input linkages and the transmission of shocks: firm-level evidence from the 2011 Tohoku earthquake. Put in relation to the sample average per capita growth rate (2.53%), the effect translates to a decrease of \(-46\)%. (2012) use data from EM-DAT as main input for their explanatory variables. Econometrica 80(5):19772016, Article 4. Econ Syst Res 25(1):2049, Lenzen M, Malik A, Kenway S, Daniels P, Lam KL, Geschke A (2019) Economic damage and spillovers from a tropical cyclone. Acemoglu D, Carvalho VM, Ozdaglar A, Tahbaz-Salehi A (2012) The network origins of aggregate fluctuations. By calculating the annual sectoral GDP per capita growth rate, I lose the first year of observation of the panel. This assumption is relaxed in further specifications by allowing more flexible country-specific trends (e.g., squared). Other studies analyze the disasters impact on single sectors, such as the agricultural (Blanc and Strobl 2016; Mohan 2017) or the manufacturing sector (Bulte etal. 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. For the sample average (0.88) of the regression of Column (1), this effect can be translated into a decrease of \(-298\)%, as displayed in Fig. 2019). \(Damage_{i,t}\) is the derived damage function for country i at year t from Eq. How did the tropical cyclone impact the communities of Florence? | how Econ Inquiry 46(2):214226, de Mel S, McKenzie D, Woodruff C (2012) Enterprise recovery following natural disasters. 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. This may be the reason why, on the aggregate level for indirect influences (see Fig. Originally a low-pressure system north of the Gulf of Carpentaria, Ingrid moved eastward and developed into a tropical cyclone in the Coral Sea on 6 March 2005. Tropical cyclones can have devastating economic consequences. 2018 Hurricane Florence: Facts, FAQs, and how to help Glob Environ Change 26:183195, Knapp KR, Kruk MC, Levinson DH, Diamond HJ, Neumann CJ (2010) The international best track archive for climate stewardship (IBTrACS). To identify the causal effects of tropical cyclone intensity on sectoral per capita growth, I use the following set of regression equations, which constitutes my main specifications: where the dependent variable \(Growth_{i,t-1->t}^j\) is the annual value added per capita growth rate of sector j in country i. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. Tropical cyclone | Definition, Causes, Formation, and Effects How Tropical Cyclone Eloise Impacted the Environment To the best of my knowledge, this is the first paper that analyzes global sectoral interactions after the occurrence of a tropical cyclone. Cumulative lagged influence of tropical cyclone damage on sectoral GDP growth (20years). Originating from a tropical wave over West Africa, Florence quickly organized upon its emergence over the Atlantic Ocean. In: Bobrowsky PT (ed) Encyclopedia of natural hazards. The word hurricane is only used in the Atlantic, Caribbean Sea, Gulf of Mexico, and eastern Pacific, for storms that sustain winds at or above 74 miles per hour. The seventh tropical depression, fifth named storm and the second . The results can be found in Fig. In coastal areas, storm surges can lead to flooding, the destruction of infrastructures and buildings, the erosion of shorelines, and the salinization of the vegetation (Terry 2007; Le Cozannet etal. 7), we can only see significant changes in one quarter of all InputOutput connections, while in model 4 for the direct costs, only two sector aggregates are negatively affected. The impact of cyclones can be extremely devastating, both in terms of loss of life and damage to infrastructure. (2018). Provided by the Springer Nature SharedIt content-sharing initiative, Over 10 million scientific documents at your fingertips, Not logged in 2019). The increase in tropical cyclone losses has led to concern that anthropogenic climate change is contributing to this trend. Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolinas and Georgia. However, since agricultural areas are seldom highly populated, using a population-weighted damage function for the agricultural sectors would be biased. This cost could climb higher as many rivers have yet to crest and may yet cause additional flooding. J Environ Econ Manag 98:102252, Elsner JB, Kossin JP, Jagger TH (2008) The increasing intensity of the strongest tropical cyclones. Below is the link to the electronic supplementary material. 2019). Some areas experience record rainfall with widespread flooding and predictions for it to get worse. Int J Remote Sens 38(21):59926006, Mohan PS, Spencer N, Strobl E (2019) Natural hazard-induced disasters and production efficiency: moving closer to or further from the frontier? Second, I use this new damage data to analyze all (exposed) countries (84) to tropical cyclones worldwide, which allows me to obtain more generalizable results.Footnote 2 Third, I conduct a thorough assessment of the long-term sectoral influences of tropical cyclones, as there is evidence, that long-term effects on total GDP exist (Felbermayr and Grschl 2014; Hsiang and Jina 2014; Onuma etal. The individual point estimates are shown in Figs. Upon examining the underlying estimates in Tables 1213 in Appendix A.5, it is evident that the transport, storage, communication sectoral aggregate also turns negative, at least at the 90% confidence interval.Footnote 23. Best track data are a postseason reanalysis from different available data sources, including satellites, ships, aviation, and surface measurements, that are used to describe the position and intensity of tropical cyclones (Kruk etal. They are responsible for a demand shock in the mining and quarrying sectoral aggregate, leading to delayed negative growth effects being persistent over 10years. I also checked for different lag lengths, but could hardly find any effect above a lag length of five years. It remains unclear if there exists some key sector, which, if damaged, results in a negative shock for the other sectors. To analyze potential indirect effects which could emerge because of changes in the InputOutput composition of the individual sectors, I test the following set of equations for the different Input(j)Output(k) combinations: where \(IO_{i,t}^{j,k}\) indicates the InputOutput coefficient of sectors j and k in year t and country i. Cyclone Nivar and its Impact | Civils360 IAS In general, this analysis reveals production scheme transformations that can result from both supply and demand changes of the sectors due to tropical cyclones. Loayza etal. This paper contributes to two strands of the literature. 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). This change can be regarded as reconstruction efforts, which is also reflected in the relatively rapid recovery of the agricultural sector aggregate in Fig. Despite having the largest negative shock, destroyed capital is relatively quickly replaced. In response to this, numerous studies of databases1 from around the world have been undertaken to examine the factors responsible for this increase. For example, Hsiang (2010) finds an immediate positive response of the construction sector. WMO continues to monitor the "remarkable" tropical storm, which has cut a destructive path across . \end{aligned}$$, https://doi.org/10.1007/s10640-021-00541-5, The economic impact of climate risks in China: evidence from 47-sector panel data, 20002014, The Impact of Hurricane Strikes on Short-Term Local Economic Activity: Evidence from Nightlight Images in the Dominican Republic, ICT diffusion and climate change: The role of economic growth, financial development and trade openness, CO2, SO2 and economic growth: a cross-national panel study, The Effects of Natural Disasters and Weather Variations on International Trade and Financial Flows: a Review of the Empirical Literature. The findings can help them to identify the sectors for which they must reduce disaster risk. Unraveling the Effects of Tropical Cyclones on Economic Sectors Worldwide: Direct and Indirect Impacts, $$\begin{aligned} S_{g} = {\left\{ \begin{array}{ll} \max (0, ((M - abs(T)) * \frac{R}{D}^\frac{3}{2} *e^{1-\frac{R}{D}^\frac{3}{2}})+T),&{} \text {if }D<10*R \text { from center to outer core} \\ 0, &{} \text {if }D>10*R \text { out of radius}. Environ Sci Technol 46(15):83748381, Lenzen M, Moran D, Kanemoto K, Geschke A (2013) Building Eora: a global multi-region input-output database at high country and sector resolution. Section 5 concludes with a discussion of the results and highlights policy implications. Based on a fine-gridded wind field model, I generate a new sector-specific damage measure weighted by either agricultural land use or population data. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. J Urban Econ 88:5066, Elliott RJ, Liu Y, Strobl E, Tong M (2019) Estimating the direct and indirect impact of typhoons on plant performance: evidence from Chinese manufacturers. Excellent proofreading was provided by Jamie Parsons and Harrison Bardwell. 2018; Elliott etal. It is not empirically clear how long past tropical cyclones influence present economic growth rates. In: Bobrowsky PT (ed) Encyclopedia of natural hazards. This hypothesis is supported by empirical findings for a positive GDP growth effect for Latin American countries (Albala-Bertrand 1993), for high-income countries (Cuaresma etal. (2019) show that indirect impacts are nearly as high as direct impacts. This approach follows Hsiang and Jina (2014) which analyze the accumulated long-term GDP growth effects of tropical cyclones worldwide. Int J Disaster Risk Sci 10(2):166178, Munich R (2018) NatCatSERVICERelevant natural loss events worldwide 19802018. Hurricane Florence reached its maximum wind speed of 130 knots (category 4 hurricane) on 11 September and made landfall on 14 September in North Carolina. The underlying calculations for these numbers are as follows: agricultural damage: 91/1027 = 0.0886, population damage: 82/1035 = 0.0801. The data are collected every year for as many countries and regions as possible.Footnote 11 The sample used in my analysis covers the 19702015 period and includes a maximum of 205 countries.Footnote 12, To analyze potential sectoral shifts within the economy after a tropical cyclone, I take advantage of the InputOutput data of EORA26 (Lenzen etal. To underline the credibility of my regression analyses, I test the sensitivity of my results in various ways. My results indicate that this negative aggregate effect can be attributed to two sectoral aggregates, including agriculture, hunting, forestry, and fishing; manufacturing and wholesale, retail trade, restaurants, and hotels. Read the InFocus blog post on climate change and flooding I am grateful for comments made by Axel Dreher, Vera Eichenauer, Andreas Fuchs, Lennart Kaplan, Eric Strobl, and Christina Vonnahme. As demonstrated in Fig. 2018; Elliott etal. To analyze the effect of tropical cyclones in the longer run, I introduced lags of the tropical cyclone damage variable to the main specification 4. Generally speaking, the proposed models offer a simple but strong way for causal interpretation of the impact of tropical cyclones on sectoral growth. In contrast, for the agricultural sector, it would be misleading to take a nighttime light or a population weight, since these areas have a rather low population density. Nat Hazards Earth Syst Sci 19(1):137151, Loayza NV, Olaberra E, Rigolini J, Christiaensen L (2012) Natural disasters and growth: going beyond the averages. How did the tropical cyclone impact the people communities? The remainder of this paper is structured as follows: Sect. Additionally, it has been shown, that low- and middle-income countries seem to be more vulnerable to the negative impacts of natural disasters than high-income countries (Felbermayr and Grschl 2014; Berlemann and Wenzel 2018). Section4 presents the main results as well as robustness checks. 2019), and the sector other activities (JP) comprises, among others, the financial sector. The recovery to trend hypothesis characterizes a pattern where after a negative effect in the short run, the economy recovers to the previous growth path after some time. High levels of moisture in the air and low wind sheer formed showers and thunderstorms. [2] Between 1979 and 2017, there was a global increase in the proportion of tropical cyclones of Category 3 and higher on the Saffir-Simpson scale. To underpin the causal identification, I conduct a falsification test, where I introduce leads instead of lags of the Damage variable, as well as a Fisher randomization test. (2012) demonstrate that only the agricultural sector is negatively affected. Tropical Cyclone Eloise was the strongest tropical cyclone to impact the country of Mozambique since Cyclone Kenneth in 2019 and the second of three consecutive tropical cyclones to impact Mozambique in the 2020-21 South-West Indian Ocean cyclone season. Geosci Model Dev 12(7):30853097, Bacheler NN, Shertzer KW, Cheshire RT, MacMahan JH (2019) Tropical storms influence the movement behavior of a demersal oceanic fish species. As Sect. Tropical Cyclones | World Meteorological Organization 4. This is an improvement in comparison to Hsiang (2010) who only focuses on 26 Caribbean countries, which are highly exposed but only account for 11% of global GDP in 2015 (United Nations Statistical Division 2015c). 2013). (2019) find a build-back-better effect for plants that survived the 1995 Kobe earthquake and Mohan etal. In contrast to Eq. The cumulative effects are calculated by F-tests of the respective lag lengths; for example, the coefficient and confidence intervals after two years are calculated by the F-test: Damage+L1.Damage+L2.Damage. 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. Nonetheless, the results can provide general guidance for international disaster relief organizations that are active in various countries on how to direct their long-run disaster relief programs. Therefore, I include the mean level of temperature and precipitation as additional climate controls in a further specification. Hurricane Florence Case Study - Internet Geography

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