The Cost of Extreme Weather

The UN World Meteorological Organization released a statement yesterday which began with this less than cheerful assertion:
Weather and climate are marked by record extremes in many regions across the world since January 2007. In January and April 2007 it is likely that global land surface temperatures ranked warmest since records began in 1880.
For details of the exact storms, floods, droughts, and cyclones and their consequences, check out this article from the FT or this piece on Here are just a few illustrations:
  • South Africa, on June 27, experienced its first significant snowfall since 1981
  • Heavy rains during 6-10 June ravaged areas across southern China. Flooding affected over 13.5 million people with more than 120 fatalities
  • Monsoon extremes and incessant rains caused large-scale flooding all over South Asia... resulting in more than 500 deaths, displacement of more than 10m people and destruction of vast areas of croplands, livestock and property
Of course, as the FT carefully hedges, "the floods, droughts, heatwaves, and storms could be part of the climate's natural variations and cannot be directly attributed to climate change. However, such instances of extreme weather are consistent with predictions of what will happen as the world's climate grows warmer."

Meanwhile, as the article points out, a separate report was released by the US government's Energy Information Administration warning "that a Senate energy bill aimed at reducing greenhouse gas emissions would cost the economy $533 billion over a period of 21 years."

That sounds like quite a lot. But environmental economist John Whitehead crunched a few numbers and came up with some interesting results. "Over 21 years, a cost of $533 billion is about:

  • 0.21% of an $11 trillion US economy with a zero growth rate
  • $85 per person per year based on a population of 300 million people"
The question then becomes, for businesspeople and for all citizens, which is really costlier, cutting CO2 emissions now or paying for all those floods and cyclones later?