About the Billion Dollar Event discussion

NOAA tracks “Billion Dollar Disasters” and there are a number of news stories today that this year is on track for a record number of them. Evidence for climate change? Well, not so fast …

The problem with the analysis is that the NOAA studies seem to only adjust for inflation. But inflation isn’t the whole story: stuff doesn’t just cost more, there is more of it due to population changes as well as the fact the average person in the US owns more stuff. So what you need to be doing is adjusting for value of exposure, which is a lot harder because you have to look at population changes, development patterns, and differences such as 30 or 40 years agot only the uber-rich had personal computers or “entertainment centers” with fancy home electronics but today a lot more people have these things, more two car families, and so forth.

I’m currently working on a global flood risk assessment that includes the potential impact of climate change and am doing validation tests on the models, so this is something I’m struggling with in real time today. Take one example, floods across the US Northeast in June of 2006. At the time, damage was estimated at $1.521 Billion USD. The NOAA inflation adjusted value using CPI is $2.282 Billion. OK so far – but the problem is the population has grown, as well as infrastructure. So the damage if that event occurred to day would be closer to $2.738 Billion – 20% higher. And that’s only going back 17 years. Looking at events further back in time, an event in 1990 that caused $250 million in impacts would, taking in to account inflation, be estimated at $600 million and therefore not qualify as a Billion dollar event. But again that’s not the whole story. US population has grown by over a third since 1990 (248 Million to 330 Million), and in many areas of the country the value of the exposure at risk has more than doubled! Worse, many of these areas of high growth are in areas vulnerable to disasters. So that $250 million dollar event in 1990 would have impacts of $1.2 Billion if it happened today, and so should have made the list.

If you crunch the numbers, and take in to account exposure changes as opposed to just inflation, there is a bit of a trend towards more extreme events and expensive disasters over time. But it’s hard to pull that out from all the noise of the drastic changes in human development patterns over the last 50 years.

This gives you an idea why it is extremely difficult to do these kinds of studies. Don’t mistake this post or discussion as trying to attack the underlying theory of climate change. Make no mistake: we’ve really screwed up the Earth’s ecosystems on many levels. Atmospheric composition, land cover, microplastics, there is a huge list of things we’ve done to the planet, and are clearly destabilizing many of its key systems. But when assessing the impacts you have to use solid science. This is something Roger Pielke, Jr. has been writing extensively about (link to article about the NOAA studies). Exaggerating – which isn’t necessary – doesn’t do anything but potentially discredit the need to take action to fix these issues. So I urge researchers to be careful … don’t give those who aren’t convinced of the reality of human impacts on the environment any excuses to question the work.