Tag Archives: Climate Change

Hurricane Sandy Reminds Us of the Shortfalls of GDP

By: Nina Brooks

 

Hurricane Sandy caused widespread destruction with 56 deaths in the United States, 4 million people without power, public transportation shutdowns, and is poised to be the second most expensive storm in America’s history. While there has been some looting and increases in crime, overall we have seen a vastly more effective national response to Sandy compared to Hurricane Katrina. In low-income countries massive devastation from natural disasters is commonplace, but those countries have few resources to cope with the damage. On the other hand, in the United States the destruction will spark our productive and creative capacity to overcome the economic devastation. But there is something awfully perverse to that logic.

 

EQECAT, a catastrophe risk modeling firm, estimates the initial economic damage caused by Hurricane Sandy in the range of $30-50 billion. But this figure will likely grow over the next few weeks as the full impact of power outages and public transportation shutdowns are accounted for. By comparison, Hurricane Katrina caused $108 billion in damage. The New York Stock Exchange shut down for two full days due to the storm, which is the first time since 1888, and forecasters are making predictions for Sandy’s effect on 4th quarter GDP. “While natural disasters take a large initial toll on the economy, they usually generate some extra activity afterward,” said Moody’s Analytics Ryan Sweet. GDP is a flow measure—thus the existing stock of wealth is not included in that measurement nor is the destruction of that wealth, but the economic activity associated with rebuilding is included. As the nation, and particularly the Northeast, comes together and rebuilds the damage from Hurricane Sandy, the economic productivity generated could in fact offset the loss caused by the damage in the first place. This is why we often hear arguments about the “silver lining” of natural disasters.

 

This potentially pernicious aspect of GDP is exacerbated by the recession, as we are constantly looking for signs of recovery and GDP growth is still our go to indicator. GDP clearly does not capture all of the things that are crucial for producing a real economic recovery and generating lasting well being.  Rather than expending the nation’s productive capacity on creating new wealth, which is still desperately needed during this recession, we will be recouping what was lost as a result of Sandy. The problem with using GDP as a proxy for well being, when in fact it is a measure of productivity, has often been discussed and debated. But why haven’t we moved past the rhetorical debate? Hurricane Katrina was a wakeup call in this regard—but then America became complacent on this issue. Before the recession hit Europe, the Beyond GDP debate, which focused on looking for indicators that take account of environmental and social aspects that serve as better proxies for well being progress, was alive and well. This debate got to the heart of the natural disaster-GDP paradox. The aftermath of Hurricane Sandy presents an opportunity to revive that debate, which is central to thinking about economic recovery and resilience.

Neither Presidential Candidate Saying Much About Climate Change

By: Hal Beresford

We saw some extreme weather during the middle months of 2012.  Strong heat waves affected millions of Americans, and the Midwest endured their most severe drought in recent memory.  In addition, a larger-than-usual number of huge wildfires scorched the western United States.  In June, one such fire – Colorado’s Waldo Canyon fire – prompted officials in Colorado Springs to evacuate 32,000 residents and ended up destroying 346 homes.

Meanwhile, more and more long-term scientific evidence is accumulating that our greenhouse gas emissions are warming earth’s climate.  The instrumental temperature record has been on a general upward trajectory since 1980 and before, and measurements indicate that the amount of CO2 in the atmosphere has been rising since the 19th century.  Just earlier this month, NOAA reported that September 2012 was the warmest September on record (tied with 2005) in records going back to 1880.

U.S. government agencies have noticed the large and growing scientific evidence in support of climate change, and they forecast that climate change will likely cause us big problems down the road.  The EPA’s Climate Change page lists today in one of its headlines that, “hurricanes in the Atlantic are likely to become more intense.”  In another headline, it notes that average sea levels are projected to rise up to two feet by the end of this century, eliminating 10,000 square miles of land in the United States.  (10,000 square miles is slightly less than the area of Massachusetts.)

Despite such risks, climate change has not emerged as a big issue in this year’s presidential race.  Barack Obama has only occasionally voiced support for new policies to slow climate change, and Mitt Romney has been mostly absent on the issue.  After three heavily-watched presidential debates, the candidates have remained mostly silent on climate change.

Granted, we as a nation have extremely pressing short-term issues to deal with.  Too many Americans can’t find work, our government finances are a mess, and we are still at war in Afghanistan.  These are all serious issues that most Americans currently care more about than environmental concerns, so it makes sense that Obama and Romney would focus more on them.

It also likely that Obama and Romney might not want to wade into the climate change debate because of political reasons.  Al Gore’s 2006 movie The Inconvenient Truth sparked a passionate public discussion about climate change that is still ongoing.  If Obama spoke out strongly on acting to slow climate change, the main effect might only be to motivate more right-leaning voters to go to the polls on Election Day to vote Romney.  If Romney did so, he would alienate influential climate change deniers within his party.

No matter the candidates’ reasons, climate change is the only issue that is projected to eliminate 10,000 square miles of U.S. territory and generate higher-intensity hurricanes unless we act on it.  We can’t wait forever to act because the only way to stop a strong hurricane or an increase in ocean level is to prevent it.  I hope that our presidential candidates will acknowledge that and discuss climate change as an important issue.