The InputOutput analysis demonstrates that production processes are only slightly disturbed by tropical cyclones. Nevertheless, it unveils the importance of the manufacturing sectors, as already demonstrated by their strong intersectoral connection in Fig. 2023 Springer Nature Switzerland AG. A strong pressure gradient rapidly developed within the system as it headed west resulting in a category rating of 5 by 8 March. 2014). In contrast, for the agricultural sector, it would be misleading to take a nighttime light or a population weight, since these areas have a rather low population density. Significant effects of tropical cyclone damage on InputOutput coefficients. Economics of Disasters and Climate Change (pp. The weighted tropical cyclone damage variables are orthogonal to economic growth as well as the InputOutput coefficients, and the panel approach allows me to identify the causal effect. 2.Economy 3.People /communities Exposed countries are defined as having at least one positive damage observation over the sample period. Rev Environ Econ Policy 13(2):167188, Bulte E, Xu L, Zhang X (2018) Post-disaster aid and development of the manufacturing sector: lessons from a natural experiment in China. Additionally, a new damage measure is developed that considers the varying levels of exposure of different sectors. In the sample used, 70% of all grid-points are hit once by a tropical cyclone per year, whereas 20% are hit twice and 10% more than twice. 2014). Flooding could prove devastating. I find a significantly negative influence of tropical cyclones on two sector aggregates including agriculture, as well as trade and tourism. Wilmington remained cut off for at least a week following Hurricane Florence delaying the distribution of food, water and . Tropical cyclones have the largest negative effect on the agriculture, hunting, forestry, and fishing aggregate compared to other sectoral aggregates. The purpose of this study is to advance our understanding of anthropogenic influences on tropical cyclones by quantifying the impact of climate change so far, and in the future, on the intensity . To quantify the destructiveness of tropical cyclones, I construct a new damage measure based on meteorological data weighted by different exposure of the sectors. Nat Clim Change 2(3):205209, Miranda JJ, Ishizawa OA, Zhang H (2020) Understanding the impact dynamics of windstorms on short-term economic activity from night lights in Central America. In total, I extend this research area in three ways: First, I introduce a new objective damage measure that allows for sector specific exposure of tropical cyclones. The results are particularly pressing, as tropical cyclones will continue to intensify due to global warming (Knutson etal. Tropical cyclones use warm, moist air as their source of energy or "fuel". However, one year later, as shown in Fig. However, as an additional robustness test, I also show a regression where I include these outliers and the results remain unchanged. 2019). Previous empirical studies on the relationship between economic development and tropical cyclone damage found a negative influence on GDP growth (e.g., Strobl 2011; Bertinelli and Strobl 2013; Grger and Zylberberg 2016). (2012) only differentiate between three sectors: agriculture, manufacturing, and service. How did the tropical cyclone impact the people communities? Originating from a tropical wave over West Africa, Florence quickly organized upon its emergence over the Atlantic Ocean. Winds have lessened to 45 mph. First, I run two randomization tests: a Placebo test by using leads instead of the contemporaneous measure of the damage variable and a Fisher randomization test, where I randomly permute the years.Footnote 29 Second, to rule out potential omitted variable biases, I include additional climatological variables (precipitation and temperature) and a set of socioeconomic variables (population growth rate, economic openness, the growth rate of the gross capital formation, and logged per capita value added of the respective sector).Footnote 30 Third, I test different trend specifications: region-specific, nonlinear, and no trends at all. It remains unclear if there exists some key sector, which, if damaged, results in a negative shock for the other sectors. Torrential rainfall can cause serious in-land flooding, thereby augmenting the risk coming from storm surges (Terry 2007). Furthermore, the results of the randomization test show that the \(H_0\) of no effect of tropical cyclone damage can be rejected at the 1% and 5% level of confidence for the agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels sectors, respectively. In coastal areas, storm surges can lead to flooding, the destruction of infrastructures and buildings, the erosion of shorelines, and the salinization of the vegetation (Terry 2007; Le Cozannet etal. I decide not to use the WIOD database because its country sample is not very exposed to tropical cyclones. PubMedGoogle Scholar. This is an improvement in comparison to Hsiang (2010) who only focuses on 26 Caribbean countries, which are highly exposed but only account for 11% of global GDP in 2015 (United Nations Statistical Division 2015c). They are, however, aware of data problems, such as incomplete reports, fluctuating quality of the reports, and correlation with GDP. Cyclones can produce flooding in two ways. Appendix A.6 first shows the results of the randomization tests, followed by coefficient plots that summarize the remaining specifications. Positive effects include, for instance, as a consequence of the destruction of capital, that the marginal productivity of capital increases, making it more attractive to invest in capital in the affected area (Klomp and Valckx 2014). Econ J 129(619):13271342, He S (2017) Randomization inference with Stata: a guide and software. Before 2000, only decadal data are available. Oscar A. Ishizawa, Juan Jos Miranda & Eric Strobl, Aiman Sana, Farzana Naheed Khan & Umaima Arif, Preeya S. Mohan, Nekeisha Spencer & Eric Strobl, Channing Arndt, Paul Chinowsky, James Thurlow, Jimena Alvarez, Dmitry Yumashev & Gail Whiteman, Environmental and Resource Economics The findings could help to explain why there has been no discernible change in the number of tropical cyclones occurring globally over the past 40 years, says Murakami: "We don't find any clear trend in the number of global tropical cyclones over the last 40 years. The storm was named by the Australian Bureau of Meteorology on 4 February and and finally came to an end on 14 March. (2019) show that indirect impacts are nearly as high as direct impacts. The main causal identification stems from the occurrence of tropical cyclones, which are unpredictable in time and location (NHC 2016) and vary randomly within geographic regions (Dell etal. Originally a low-pressure system north of the Gulf of Carpentaria, Ingrid moved eastward and developed into a tropical cyclone in the Coral Sea on 6 March 2005. Sept. 16: Some areas receive as much as 34 inches of rain from Sept. 13 to Sept. 16. To address the varying economic exposure of affected areas, studies have used population (Strobl 2012), nightlight intensity (Heinen etal. The coefficients show the increase of the respective damage variable by one standard deviation. Open Access funding enabled and organized by Projekt DEAL. First, I account for the economic exposure by weighting the maximum occurred wind speed per grid cell and year by the number of exposed people living in that grid cell relative to the total population of the country. As my panel has a length of 2545years, depending on the chosen model, I assume this bias will not influence my analysis.Footnote 19 Second, all control variables are measured in \(t-1\) to reduce potential endogeneity problems stemming from the fact that control variables in t can also be influenced by tropical cyclone intensities in t (Dell etal. A tropical cyclone is a low pressure system that develops over tropical waters, characterized by high winds and heavy rain. J Urban Econ 88:5066, Elliott RJ, Liu Y, Strobl E, Tong M (2019) Estimating the direct and indirect impact of typhoons on plant performance: evidence from Chinese manufacturers. In a similar manner, Mohan and Strobl (2017) find evidence that a positive growth effect of the construction sector, financed by international aid or government programs, lead to a fast recovery of South-Pacific Islands after tropical cyclones.Footnote 27, Significant effects of tropical cyclone damage on disaggregated InputOutput coefficients. I also tested for lagged cumulative effects. For sectoral GDP effects, however, no such evidence exists so far. Bakkensen LA, Park D-SR, Sarkar RSR (2018) Climate costs of tropical cyclone losses also depend on rain. 2019). Evidence from India. The analysis is conducted on a country-year level. Figure 8 reveals some patterns that are not visible on the aggregate level. It is possible that the economy exhibits positive growth rates after a first negative growth shock. This does not mean that there have to exist a permanent negative growth effect for every period after the disaster. It is not empirically clear how long past tropical cyclones influence present economic growth rates. The procedure is hierarchical and reaches from other official governmental publications over publications from other international organizations to the usage of data from commercial providers (United Nations Statistical Division 2015b). The error term \(\epsilon _{i,t}\) is clustered at the country level. 4. Environ Sci Technol 46(15):83748381, Lenzen M, Moran D, Kanemoto K, Geschke A (2013) Building Eora: a global multi-region input-output database at high country and sector resolution. Nearly 2 million people have died globally due to tropical cyclones. Generally speaking, the proposed models offer a simple but strong way for causal interpretation of the impact of tropical cyclones on sectoral growth. Country-year observations above two standard deviations are labeled with the respective ISO3 code. In general, a one standard deviation increase in tropical cyclone damage is associated with a decrease in the annual growth rate in the sector aggregate agriculture, hunting, forestry, and fishing of \(-\,2.62\) percentage points. They ask significantly less input from other sector aggregates, while, at the same time, sectors from other aggregates ask more input from the manufacturing sectors. Notes The colored areas depict all significant coefficients between the sectors, with negative coefficients in red and positive in green. 2018) or exposed area (Hsiang and Jina 2014) to weight the respective physical intensities of tropical cyclones. Tropical cyclones cause widespread damage in specific regions as a result of high winds and flooding. To identify the causal effects of tropical cyclone intensity on sectoral per capita growth, I use the following set of regression equations, which constitutes my main specifications: where the dependent variable \(Growth_{i,t-1->t}^j\) is the annual value added per capita growth rate of sector j in country i. The impact of cyclones can be extremely devastating, both in terms of loss of life and damage to infrastructure. First, as shown by Nickell (1981), there is a systematic bias of panel regressions with a lagged dependent variable and fixed effects. Therefore, in this section, I investigate, by means of the InputOutput analysis, how the sectors change their interaction after a tropical cyclone has hit a country. Econ Syst Res 25(1):2049, Lenzen M, Malik A, Kenway S, Daniels P, Lam KL, Geschke A (2019) Economic damage and spillovers from a tropical cyclone. Second, I use this new damage data to analyze all (exposed) countries (84) to tropical cyclones worldwide, which allows me to obtain more generalizable results.Footnote 2 Third, I conduct a thorough assessment of the long-term sectoral influences of tropical cyclones, as there is evidence, that long-term effects on total GDP exist (Felbermayr and Grschl 2014; Hsiang and Jina 2014; Onuma etal. (Color figure online). A one standard deviation strong event has a probability of 8.9% among events above zero for agricultural damage and 8% for population damage.Footnote 16, Heatmap of InputOutput coefficient averages, 19902015. It rather points to the presence of (delayed) negative effects of tropical cyclones from which the sectors cannot recover. Both variables are associated with the occurrence of tropical cyclones since they only form when water temperatures exceed 26 \(^{\circ }\)C and torrential rainfalls usually constitute part of them. While some studies provide evidence of only a short-term economic impact of tropical cyclones (Bertinelli and Strobl 2013; Elliott etal. The increase in tropical cyclone losses has led to concern that anthropogenic climate change is contributing to this trend. It . Therefore, I propose a new damage measure that explicitly considers these different exposures. 2 contains a description of the data source, introduces the construction of the tropical cyclone damage measure, and presents descriptive statistics. Immediately after the disaster, the policy should concentrate on the agriculture, hunting, forestry, and fishing, and the wholesale, retail trade, restaurants, and hotels sector aggregates, as they are most vulnerable, and/or recovery measures have not been conducted efficiently in these sectors. (2019) demonstrate that there exist a short-term productivity efficiency increase after damaging hurricanes in the Caribbean. Cyclone Eloise. 7. 6: The manufacturing sectors ask significantly less input from it. Figure 6 illustrates the cumulative point estimates of the past influence of tropical cyclone damage on the different sectoral growth variables.Footnote 22 The x-axis represents the lags of the damage variable, while the y-axis indicates the size of the cumulative coefficient \(\beta\) (in standard deviations). 2008; Mendelsohn etal. 2010).Footnote 4, To calculate a new aggregate and meaningful measure of tropical cyclone damage separated by economic sectors on a country-year level, I make use of the CLIMADA model developed by Aznar-Siguan and Bresch (2019) at a resolution of 0.1\(^{\circ }\).Footnote 5 The model employs the well-established Holland (1980) analytical wind field model to calculate spatially varying wind speed intensities around each raw data observation track.Footnote 6 The model is restricted to raw data wind speed intensities above 54 km/h and it interpolates the 6-h raw data observations from the IBTrACS data to hourly observations.Footnote 7. Taking all considerations together, I calculate the following tropical cyclone damage for each country i and year t: where \(w_{g,t-1}\) are the exposure weights, agricultural land, or population, in grid g in period \(t-1\). https://ideas.repec.org/c/boc/bocode/s352601.html, Nguyen CN, Noy I (2019) Measuring the impact of insurance on urban earthquake recovery using nightlights. Additionally, this finding undermines the urgency to analyze past influences beyond one or two years when examining the economic impacts of natural disasters. Figure 6 demonstrates that three out of seven sectoral aggregates suffer from delayed negative impacts of tropical cyclones. This index is then multiplied by the cubed maximum wind speed \(S(max)_{g,t}^{3}\) in grid g and year t as calculated by Eq. Based on a fine-gridded wind field model, I generate a new sector-specific damage measure weighted by either agricultural land use or population data. Second, only the maximum wind speed per grid cell and year is used for the calculation of the tropical cyclone damage. Note that InputOutput coefficients can only range between 0 and 1. 2019). 18. All weights are available in the HYDE 3.2 data set (Klein Goldewijk etal. The agriculture, hunting, forestry, and fishing sector aggregate first depicts negative growth rates but then quickly recovers after four years. J Dev Econ 88(2):221231, Onuma H, Shin KJ, Managi S (2020) Short-, medium-, and long-term growth impacts of catastrophic and non-catastrophic natural disasters. This is a well-established method (Strobl 2012; Heinen etal. 2020). By doing so, I test the null-hypothesis of no effect of the damage variable. Effects of tropical cyclone damage on sectoral GDP growth compared to sample average. Natural Hazard-Induced Disasters and Production Efficiency: Moving Closer to or Further from the Frontier? Below is the link to the electronic supplementary material. Nature 455(7209):9295, Emanuel K (2011) Global warming effects on U.S. hurricane damage. As per the guidelines of the World . Depending on the level of aggregation, I run 49 (7*7) or 676 (26*26) different regressions. 2632). https://doi.org/10.1007/s10640-021-00541-5, DOI: https://doi.org/10.1007/s10640-021-00541-5. Circle diameters represent the average proportional share on total GDP ranging from 32% (other activities), over 12% (manufacturing) to 6% (construction).Footnote 25.
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