Category Archives: Economic Impact

Costs of Disasters Globally Expected to Escalate

Posted on by
Reply

Natural Disasters Could Cost $750 Billion Annually in 15 Years: AIR Study. Some excerpts:

Economic losses from global natural catastrophes likely will triple over the next 15 years, unless steps are taken to reduce bad development choices, according to preliminary results of a catastrophe modeling study presented at the third UN World Conference on Disaster Risk Reduction in Sendai, Japan.

The study, which was conducted by the Boston-based modeling firm AIR Worldwide, examines the trend of growing economic losses from global natural catastrophes by looking at nearly 20 years of historical events.

Here is the direct link to AIR Worldwide and here is a link to their Infographic.

 

Severe Impacts on Business from Snow Storms in Northeast

Posted on by
2

We have all seen the dramatic pictures of the snow piles in Boston, but the less noticeable impacts on those on people, businesses, and parents of school children. It is hard to believe, but even with 100 plus inches of snow on the ground, and the major cash outlays by the City of Boston, FEMA has yet to grant Boston a disaster declaration.  Probably many other nearby localities have applied for federal assistance too.

Among the many indicators of hardship is the slump in business sales. See:
Winter storms battered sales of small businesses, survey shows.

As snow piled ever higher last month, sales slumped dramatically for retailers, restaurants, and other small businesses in Massachusetts….

The poll of more than 1,600 companies found sales fell an average of 24 percent between Jan. 26 and Feb. 22, compared with the same period a year earlier. Retailers and restaurants were hit hardest by the weather, with sales falling nearly 50 percent….

As noted in the article, for some businesses the lack of consumers is a hardship and for some (notably small restaurants), it may be fatal.

Just because CNN and the other media stop showing pictures, that does not mean the problems in recovering communities are over.

Economics of Resilience

Posted on by
3

This is not an easy read, but some of the points are interesting.  The author says that the article “provides a framework for the economics of resilience…” though the title is Challenges of Dealing with Uncertainty. I am out of my league to do a content review, but I welcome comments and analysis from readers.

Update: Be sure to read the comments section, where readers have contributed to the assessment of this article.

 

Economic Impacts of H. Katrina – not what you think!

Posted on by
5

The National Bureau of Economic Research recently issued a Working Paper titled: “The Economic Impact of Hurricane Katrina on its Victims: Evidence from Individual Tax Returns” by Tatyana Deryugina, Laura Kawano, Steven Levitt. A key finding”:

“…at least in this particular disaster, aid to cover destroyed assets and short-run income declines was sufficient to make victims finally whole. Our results provide some optimism regarding the costs of climate-change drive dislocation, especially when adverse events can be anticipated well in advance.”

It was written up in the Washington Post, but I have to say this is not one of the Post’s best reporting jobs, since one cannot even find the full title and source of the paper. Their title is: Incomes actually went up after Hurricane Katrina. But economists don’t know why. Surprising new research shows that people living in New Orleans were financially better off after Katrina.

The full paper, 47 pages, is available from NBER for a modest fee. The Diva has a copy she can share upon request, for educational use.

Economic Development and Disasters

Posted on by
1

Today Ms Emily Brown of IEDC is our guest blogger to tell us about the work of her organization. The economics of disasters is an important topic and deserves more attention

IEDC Addresses the Economic Development Piece of Disaster Recovery

Disasters impact communities on every level. After addressing health and safety concerns, one of the larger issues communities face is how to ensure the health of their economy. When businesses are damaged and workforce is displaced, jobs can be on the line. Economic developers can help to mitigate the effects of a disaster on an economy, leading to a full recovery and a stronger community.

The International Economic Development Council (IEDC) is a non-profit membership organization serving economic developers. Economic developers promote economic well-being and quality of life for their communities by creating, retaining and expanding jobs that facilitate growth, enhance wealth and provide a stable tax base.  

Since 2005, the International Economic Development Council has been assisting economic development professionals in disaster impacted communities. We have worked in Louisiana, Missisippi, Missouri, Alabama, North Carolina, New York, and Massachusetts after disasters such as hurricanes, tornados, flooding, and storms.  Our trainings and resources focus on disaster preparedness and economic recovery with a special concentration on economic developers’ role.

Information on IEDC reports and resources can be found on www.RestoreYourEconomy.org, a web portal that IEDC administers with funding from the Economic Development Administration. Resources cover issues such as business continuity and preparedness, business financing and retention, capacity building, economic diversification, federal resources, public-private partnerships, and tourism recovery. Additionally, the website features relevant information from other organizations involved in recovery.

IEDC also offers a free monthly Disaster Recovery webinar. The January webinar is entitled, “Lessons from the Field: Small Business Recovery Strategies After a Disaster.” It will take place on Tuesday, January 28th from 2:30 to 4:00. Future webinars will focus on business continuity planning, establishing a 501c-3, and long term recovery for businesses.

Deeper and Harder Analyses of the the Philippine Disaster

Posted on by
1

Granted that the humanitarian concerns are very great in the Philippines, but there are many other deep-seated problems that warrant attention. Here are two accounts provide a closer look a the tough problems in the Philippines:

  • Philippines Typhoon Response Highlights Weak Infrastructure. Some excerpts:

    Under a reforming president, the Philippines emerged as a rising economic star in Asia but the trail of death and destruction left by Typhoon Haiyan has highlighted a key weakness: fragile and patchy infrastructure after decades of neglect and corruption.

Haiyan’s devastation, however, underlines the pressing need to spend more money to build hard assets such as more roads, ports and power lines — not only to improve living standards but also to better withstand the storms, earthquakes and other natural disasters that strike the country with numbing regularity.

 In the Philippines, natural disasters are common; ways to reduce they’re impact aren’t.  Geography and poverty are part of the problem.  Some other concerns:

Over the past decades, Filipinos have flocked to risky, low-lying areas, havens for cheap and crammed housing. Officials here say the Philippines must also improve emergency training for distant local governments, enforce building codes and make sure that money earmarked for infrastructure ends up helping those whose homes are the most vulnerable.

What the World Should Learn From Disasters Past.

“... that relief and reconstruction are two different things..”

Excellent New Article – in Environment Magazine

Posted on by
Reply

Since Michelin ranks restaurants with stars, the Diva has decided to award stars to documents re recovery. Here is the first one I would give 4 stars to:

Making America More Resilience toward Natural Disasters: A Call For Action, by Howard Kunreuther, Erwann Michel-Kerjan and Mark Pauly. From Environment Magazine, July/August 2013.  The title does not really do justice to the wide array of useful content here, so I suggest you download the full article and decide for yourself how you would categorize it.

Some excerpts:

Hurricane Sandy caused an estimated $65 billion in economic losses to residences, business owners, and infrastructure owners. It is the second most costly natural disaster in recent years in the United States, after Hurricane Katrina in 2005, but it is not an outlier; economic and insured losses from devastating natural catastrophes in the United States and worldwide are climbing.

According to Munich Re,2 real-dollar economic losses from natural catastrophes alone have increased from $528 billion (1981–1990), to $1,197 billion (1991–2000), to $1,23 billion (2001–2010). During the past 10 years, the losses were principally due to hurricanes and resulting storm surge occurring in 2004, 2005, and 2008. Figure 1 depicts the evolution of the direct economic losses and the insured portion from great natural disasters over the period 1980–2012.2

There is a wealth of useful information in this article, which makes it hard to summarize. It is thoughtful and clearly writtten. I consider this an essential document, one that I think will be a classic in time.

“How Gov’t Can Help the Economy Recovery from Sandy”

Posted on by
Reply

This article, How Government Can Help the Economy Recover From Sandy, raises some good points.  Even before FEMA was created (1979), some people have argued for a greater role for the Commerce Dept. and economic developement, but it never has happened.  Here is a new try, from Bloomberg News, Nov. 5.

If natural disasters such as Hurricane Sandy are becoming more frequent, and their aftermaths more expensive, then the federal response needs to become more dynamic. Especially in fostering economic recovery, there’s more the U.S. government can do.

Some steps are small and obvious, yet still valuable. Barack Obama’s administration, to its credit, has made progress in cutting disaster-relief red tape, for example. Still, the patchwork of application requirements and eligibility criteria businesses must sort through to receive aid can be further streamlined and made more consistent across agencies.

It may also make sense to designate one federal agency as responsible for economic disaster relief. Whatever agency takes the lead (a report from the International Economic Development Council recommends the Department of Commerce’s Economic Development Administration) should have a consistent, dedicated level of money on hand to respond to disasters. The IEDC suggests $100 million. This would free up cash quickly and help insulate economic disaster relief from political manipulation.

VERY USEFUL REPORT: The direct line to the IEDC report is here; it’s titled ” An Improved Federal Resonse to Post-Disaster Economic Recovery”   ,(Jan. 2010)

Hurricane Isaac Stirred up BP Oil Deposits

Posted on by
Reply

 

See Storm Isaac tars Louisiana beaches with oil from BP spill, from Reuters, Sept. 12.

* Hurricane Isaac unearthed oil buried by previous storms

* BP claims “robust recovery” of Gulf ecosystems

* US govt, Louisiana point to lingering ecological damage

Two years after the worst offshore oil spill in U.S. history, mats of oily tar from BP Plc.’s ill-fated Macondo well have turned up on Louisiana’s shore after Hurricane Isaac stirred up submerged oil deposits, BP officials said on Tuesday.

BP said the oil that washed ashore after Hurricane Isaac made landfall in Louisiana on Aug. 28 was not unexpected, after Tropical Storm Bonnie in July 2010 buried oil under tons of sand. Isaac’s winds and tidal surge peeled back layers of sand and exposed tar balls and tar mats that were buried under up to five feet of sand, BP said.

One more take on the same topic appeared in the Huff Post today.

For the folks in LA and adjacent states, the 3 big disasters of the past 7 years must seem to be interconnected.