Natural Disasters' Effects on the Economy

Japan's economy was dealt a devastating blow by the 9-magnitude earthquake and tsunami that pummeled the country on March 11, 2011. An estimated 28,000 died, and 500,000 were displaced. It cost $360 billion.

It damaged the Fukushima nuclear power plant, which leaked radiation into the Pacific Ocean, raising levels to 4,000 times the legal limit. Radiation showed up in local milk and vegetables, and briefly appeared in Tokyo's drinking water. 

The National Hurricane Center estimated Hurricane Katrina's damage at $125 billion, with $80 billion in insured losses. That's $160 billion when adjusted for inflation.

Half of these losses were a result of flooding in New Orleans. University of North Texas Profession Bernard Weinstein put the total economic impact at $250 billion.

Hurricane Harvey was a Category 4 storm that hit Texas on August 25, 2017. It caused $125 billion in damage. It affected 13 million people from Texas through Louisiana, Mississippi, Tennessee and Kentucky. As of September 9, 2017, 70 people have died. 

Hurricane Maria was a  Category 5 storm when it hit Dominica on September 18, 2017. On September 20, it devastated Puerto Rico, home to 3.5 million Americans. Even though it had been downgraded to a Category 4 storm, it still cost $90 billion in damage. The death toll is 2,975.  

Hurricane Irma was the most powerful Atlantic hurricane in recorded history. It was a Category 5 storm when it made landfall on Barbuda on September 6, 2017. Its winds were 185 miles per hour for 37 hours. That's longer than any storm ever recorded. It hit southern Florida on September 10, inflicting $50 billion in damage. If it had hit Miami instead, the damage would have totaled $300 billion.

Hurricane Sandy hit New Jersey on October 29, 2012. It had been downgraded to a tropical storm, but still did $65 billion in damage. That's $70.2 billion in today's dollars.

Most of the damage was because of 12 1/2 foot storm surges. It damaged or destroyed more than 650,000 homes and eight million customers lost power. It closed the NYSE for the first time in 27 years. The New Jersey electronic exchanges closed for two days. The storm killed 159 people either directly or indirectly. 

Hurricane Ike cost $30 billion or $34.8 billion in 2018 dollars. It damaged pipelines in the Gulf of Mexico and destroyed 10 Gulf offshore oil rigs. All 22 Texas land-based oil refineries were shut down. This part of Texas is home to a quarter of U.S. crude oil and refinery production. As a result, gas prices spiked to $5 a gallon, prompting the government to open the Strategic Petroleum Reserves.

Hurricane Andrew was a Category 5 storm that hit Florida in 1992. It destroyed $26.5 billion in property or $47.8 billion in 2018 dollars. Its record 16.9-foot storm tide flooded Biscayne Bay.

Hurricane Ivan hit Alabama and Florida in 2004. This Category 3 storm caused $20.5 billion in damage.

Hurricane Wilma was a Category 3 storm that did $24.3 billion in damage in today's dollars. It pummeled Florida in 2005 with winds as high as 120 miles per hour. 

Hurricane Rita hit Louisiana and Texas in 2005. The Category 3 storm damaged $18.5 billion in property.

Hurricane Charley was a Category 4 storm when it hit Florida in 2004. It damaged $16 billion in property.

Hurricane Irene was a Category 2 storm when it hit North Carolina on August 26, 2011. Irene killed at least 20 people and left 4.5 million people without power. Property damage was $13.8 billion. University of Maryland economist Peter Morici estimated total economic impact at $45 billion.

Hurricane Matthew left $10 billion in damage when it hit in 2016. It was a Category 1 storm that hit the southeastern United States.

Hurricane Frances was a Category 2 storm that left $9.8 billion in damage. It hit Florida in 2004.

Between 200,000-250,000 people were killed by the 7.3 magnitude earthquake that ravaged Haiti in January 2010. That was 2 percent of the total Haitian population of 10 million. The Inter-American Development Bank estimated that it cost $8.5 billion in damage to Haiti's economy. The earthquake caused the country's GDP to contract 5.1 percent that year.

The largest tornado outbreak in U.S. history occurred April 25-27, 2011. In that week, 305 twisters damaged the Southeast, breaking the 1974 record of 267 tornadoes. The outbreak caused $5 billion in damage.  One single tornado in 1999 cost $1 billion alone. Although experts disagree, there is reason to believe these expensive outbreaks will get worse.

Volcanic clouds and ash from the May 21, 2011, eruption in Iceland threatened air traffic in Scotland, Ireland, France and other hubs in the northern European Union. Even though the Grimsvotn volcanic eruption was bigger than the previous year's, it wasn't as destructive economically. That's because the ash wasn't as dense, and dispersed more easily.

Iceland's 2010 Eyjafjallajökull volcano eruption closed European airports for six days, costing airlines $200 million a day. They were not insured for this type of loss.

Iceland's volcanic eruptions threatens the travel industry. It contributes $1 trillion to the European economy annually. The 2010 eruption cost the travel industry $5 billion to $10 billion a week. When air traffic in Europe slows, it threatens more than just passengers. Up to 40 percent of the world's goods by value moves by air. Drug companies, time-sensitive high-tech imports, and premium products such as fine Scotch whiskeys all sit on the tarmacs when airports are closed.

In 2017, the U.S. Forest Service spent almost $2.5 billion on fighting wildfires. It was the most destructive in recent history, burning 9.1 million acres. The other areas at risk are forests in Canada, Scandinavia, and Russia.

The frequency of western U.S. wildfires has increased by 400 percent since 1970. Recent wildfire intensity and frequency is worse now than it’s been in the past 10,000 years.

The 2011 Mississippi River flood was a 500-year event. Total economic damage was $2 billion. What made it so damagin? The Mississippi River runs past farmlands and cities in six states. 

The Dust Bowl was an area in the Midwest demolished by a 1930s drought. It was the worst drought in North America in 300 years. 

Weather patterns over the Atlantic and Pacific Oceans had shifted. The Pacific grew cooler and the Atlantic became warmer. That weakened and changed the direction of the jet stream. When the jet stream moved south, rain from the Gulf of Mexico never reached the Great Plains.

The resultant drought killed crops that normally kept the soil in place. Winds blew raised enormous clouds of dust. It deposited mounds of dirt on everything, even covering houses. The dust destroyed a large part of U.S. agricultural production. That worsened the Great Depression. 

Global warming is increasing the frequency and severity of natural disasters. Between 1956-2005, the Earth's average temperature rose 0.13 degrees Celsius each decade. This might not seem like much, but that's double the rate for the 100 years between 1906 to 2005. Antarctic glaciers are losing mass at an "unusually rapid" rate. Satellite pictures taken between 1992 and 1996 showed that the Pine Island Glacier was losing mass at a rate 42 times faster than the average over the preceding 5,000 years.

Higher temperatures are causing loss of timber thanks to the bark beetle, and more chaotic weather patterns. The result? More frequent and severe natural disasters.