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Weather Variations Cost Nearly $500 Billion Per Year

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Major disasters rightfully receive vast coverage. When the earth shakes like it did earlier this year in Japan or the entire Midwest is ravaged by spiraling winds as it was all spring, the devastation makes it easy to comprehend the magnitude of the loss.

But it turns out that the United States also loses nearly half a trillion per year from less drastic weather events. Subtler causes, such as rain and mild cold fronts, are a not-at-all-subtle drag on the economy.

New research indicates that routine weather events such as rain and cooler-than-average days can add up to an annual economic impact of as much as $485 billion in the United States.

The study, led by the National Center for Atmospheric Research (NCAR), found that finance, manufacturing, agriculture, and every other sector of the economy is sensitive to changes in the weather. The impacts can be felt in every state.

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“It’s clear that our economy isn’t weatherproof,” says NCAR scientist Jeffrey Lazo, the lead author. “Even routine changes in the weather can add up to substantial impacts on the U.S. economy.”

A University Corporation for Atmospheric research (UCAR) release reports that this is the first study to apply quantitative economic analysis to estimate the weather sensitivity of the entire U.S. economy. The research could help policymakers determine whether it is worthwhile to invest in enhanced forecasts and other strategies that could better protect economic activity from weather impacts.

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Maybe this will provide a little perspective the next time you think your day has been ruined just because you forgot your umbrella at home and got a little damp on the way to work.

At least precipitation didn’t cost you $485 billion.

(UPDATE: You can find this and other great risk-related posts in the latest edition of The Cavalcade of Risk.)

2 thoughts on “Weather Variations Cost Nearly $500 Billion Per Year”

  2. Cavalcade of Risk #134 now up

    Julie Ferguson presents this week’s epic collection of risk-related posts:

    http://www.workerscompinsider.com/2011/06/cavalcade-of-ri-83.html

    Please tell your readers.

    And a friendly reminder to newbies and regulars alike that, while it’s not mandatory to give a link back, it’s the way that carnivals work best. If your submitted post has been included in the Cav, please remember to post about it on your blog because it helps us all.

    Thanks!

    Hank Stern

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