how did the tropical cyclone impact the economy of florence

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. Econometrica 80(5):19772016, Article Therefore, I propose a new spatial exposure weight for the agricultural sector, namely agricultural land, which consists of the sum of land used for grazing and crops in \(\hbox {km}^{2}\) per grid cell. It rather points to the presence of (delayed) negative effects of tropical cyclones from which the sectors cannot recover. 2015). Technical report, Universit catholique de Louvain (UCL). This allows me to analyze whether any key sectors exist that, if damaged, result in direct damage of other sectors. Additionally, I allow for country-specific linear trends \(\mu _i*t\). Loayza etal. Springer, Dordrecht, New York, pp 481494, Chapter Details of How did the tropical cyclone eloise impact the environment? This change can be regarded as reconstruction efforts, which is also reflected in the relatively rapid recovery of the agricultural sector aggregate in Fig. The main explanatory variable is a new damage measure for local tropical cyclone intensity based on meteorological data weighted for individual sectoral exposure, which is included in a panel analysis for a maximum of 205 countries over the 19702015 period. 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. PLoS ONE 14(4):121, Strobl E (2011) The economic growth impact of hurricanes: Evidence from U.S. coastal counties. 2632). Tropical Cyclone Eloise, which hit southeastern Africa in January 2021, caused widespread flooding and landslides, resulting in at least 21 deaths and. To the best of my knowledge, this is the first paper that analyzes global sectoral interactions after the occurrence of a tropical cyclone. Other studies identify negative effects that are only significant in the short run but are insignificant in the long run (Strobl 2012; Bertinelli and Strobl 2013; Elliott etal. 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. Distribution of tropical cyclone damage, 19702015. Further details on the data on tropical cyclones can be found in Appendix A.1. They are responsible for a demand shock in the mining and quarrying sectoral aggregate, leading to delayed negative growth effects being persistent over 10years. The radius of maximum wind (R, in km) is related to the latitude (L) of the respective raw data tropical cyclone position in the following way: Since the tropical cyclone data are available at global coverage since 1950, I will extend my database later for further specifications. This may be the reason why, on the aggregate level for indirect influences (see Fig. All weights are available in the HYDE 3.2 data set (Klein Goldewijk etal. This importance for the sectoral composition was already demonstrated by Bulte etal. Concurrently, the construction sector demands significantly more input (1.84%) from the agriculture, hunting, forestry, and fishing sector. Queensland has 20% of Australia's sugar cane production, but . Therefore, we can be sure that the reduced sample size does not drive the new results. Tropical Cyclone Cheneso was a strong tropical cyclone that affected Madagascar in January 2023. In the years following a tropical cyclone, the majority of sectors experience negative growth effects. For the agricultural sector, I use the fraction of exposed agricultural land, while for the remaining sectors, I use the gridded population. 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). 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. The increase in tropical cyclone losses has led to concern that anthropogenic climate change is contributing to this trend. Bull Am Meteorol Soc 91(3):363376, Knutson T, Camargo SJ, Chan JC, Emanuel K, Ho C-H, Kossin J, Mohapatra M, Satoh M, Sugi M, Walsh K et al (2020) Tropical cyclones and climate change assessment: part II: projected response to anthropogenic warming. For tropical cyclones, no empirical cross-country study on indirect effects exists so far. I am grateful for comments made by Axel Dreher, Vera Eichenauer, Andreas Fuchs, Lennart Kaplan, Eric Strobl, and Christina Vonnahme. 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). 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. Further losses can occur if business continuity is lost through disrupted supply of intermediate inputs from, or distribution to, other businesses. Therefore, I propose a new damage measure that explicitly considers these different exposures. Circle diameter is proportional to the average sectoral share on total GDP. In consequence to tropical cyclone damage, less tourists visit affected countries (Hsiang 2010), since they perceive these destinations as too risky to travel to (Forster etal. Notes This figure shows the effect of a one standard deviation increase in tropical cyclone damage on the per capita sectoral GDP growth rate compared to the respective sample average. 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). 7), we can only see significant changes in one quarter of all InputOutput connections, while in model 4 for the direct costs, only two sector aggregates are negatively affected. Torrential rainfall can cause serious in-land flooding, thereby augmenting the risk coming from storm surges (Terry 2007). (Color figure online). Tropical cyclones are compact, circular storms, generally some 320 km (200 miles) in diameter, whose winds swirl around a central region of low atmospheric pressure. 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). For storm surge damage this is not possible, since there exists no global data set so far. J Econ Lit 52(3):740798, Dupor B (1999) Aggregation and irrelevance in multi-sector models. The storm will likely damage homes. For the latitude and longitude the model takes a spline interpolation, whereas for intensity and time observations it uses a linear interpolation. To address the varying economic exposure of affected areas, studies have used population (Strobl 2012), nightlight intensity (Heinen etal. Additionally, tropical cyclone intensity is measured by remote sensing methods and other meteorological measurements. 2012), insurance payments (Nguyen and Noy 2019), or government spending (Ouattara and Strobl 2013), which help the economy reach its pre-disaster income level. The variables are measured in constant 2005 USD. World Dev 105:231247, Bertinelli L, Strobl E (2013) Quantifying the local economic growth impact of hurricane strikes: an analysis from outer space for the Caribbean. 2017). These results are line with previous empirical studies. Furthermore, only a minority of studies explicitly investigate the disasters influences on sectoral economic development. 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. 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. Fifteen thousand people were housed in temporary shelters in North Carolina. Part of Springer Nature. This means that if a grid cell of a country was exposed to two storms in oneyear, only the physically more intense storm is considered. The new climate-economy literature. The result offers a better understanding of the finding of Hsiang & Jina (2014), who show that tropical cyclones have long-lasting negative impacts on GDP growth by demonstrating which sectors are responsible for the long-lasting GDP downturn that they identify. The data are collected every year for as many countries and regions as possible.Footnote 11 The sample used in my analysis covers the 19702015 period and includes a maximum of 205 countries.Footnote 12, To analyze potential sectoral shifts within the economy after a tropical cyclone, I take advantage of the InputOutput data of EORA26 (Lenzen etal. Table 21 in Appendix A.5 reveals that even with the smaller sample, all previously found effects can be identified again. I tested my data extensively for outliers having a high influence on my results. 2017) at a spatial resolution of around \(10\,\times \,10\)km.Footnote 10 To avoid potential endogeneity concerns, I lag the respective weights by one period. www.emdat.be, Haimes YY, Jiang P (2001) Leontief-based model of risk in complex interconnected infrastructures. Additionally, within the agriculture, hunting, forestry, and fishing sectors, only the fishing sector experiences indirect negative effects. Panel (a) displays the percentage of agricultural land, whereas (b) shows the distribution of population in Australia in 2008. Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013 ). Most worryingly, the majority of all sectors experience delayed negative effects underpinning how far away the international community remains from a build-back better or recovery to trend situation for tropical cyclone-affected economies. J Dev Econ 111:92106, Fetzer T (2020) Can workfare programs moderate conflict? In detail, this model can be described by the following set of regression equations: where all variables are defined as in Eq. Figure 8 reveals some patterns that are not visible on the aggregate level. Abstract. Power cables and telephone lines come down, crops are ruined, and water and sewage supplies are affected. Table 1 presents the results of the main specification for each of the seven annual sectoral GDP per capita growth rates. This behavior most likely speaks for an enduring risk adjustment of tourists. About 12 hours before Hurricane Florence makes an appearance, both of Duke Energy's North Carolina plants will shut down. In response to this, numerous studies of databases1 from around the world have been undertaken to examine the factors responsible for this increase. 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. My results indicate that this negative aggregate effect can be attributed to two sectoral aggregates, including agriculture, hunting, forestry, and fishing; manufacturing and wholesale, retail trade, restaurants, and hotels. The start of the arrow shows the input, and the end denotes the respective output. 2019). Below is the link to the electronic supplementary material. 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. 2015). \(Damage_{i,t}\) is the derived damage function for country i at year t from Eq. 2 contains a description of the data source, introduces the construction of the tropical cyclone damage measure, and presents descriptive statistics. 4, I introduce a lagged dependent variable, since I suspect a strong path dependence of the InputOutput coefficient, i.e., most sectors plan their inputs at least one period ahead. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. This exogenous measure allows me to identify an immediate negative growth effect of tropical cyclones for two out of seven sectoral aggregates including agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels. Impacts of tropical storms Buildings and bridges can be destroyed, people can get into difficulties in the water, and roads and railways can become damaged. Eastern North Carolina is prone to flooding associated with tropical cyclones (e.g., hurricanes Fran in 1996 and Matthew in 2016) and it is likely that an event similar to the Hurricane Florence . Tropical Cyclone Freddy - which is threatening communities in Madagascar and Mozambique for a second time in as many weeks - could become the longest-lasting storm of its kind on record, the World Meteorological Office (WMO) said on Tuesday. The wind speed drops with distance to the center of the hurricane and as soon as it makes landfall. Nearly 2 million people have died globally due to tropical cyclones. Clim Change 114(3):745768, Ghosh A (1958) Input-output approach in an allocation system. Since the commonly used report-based EM-DAT data set (Lazzaroni and van Bergeijk 2014) has been criticized for measurement errors (Kousky 2014), endogeneity, and reverse causality problems (Felbermayr and Grschl 2014), I use meteorological data on wind speeds to generate a proxy for the destructive power of tropical cyclones.Footnote 3 This approach is in line with previous empirical studies (e.g., Hsiang 2010; Strobl 2011, 2012), but I advance this literature by generating a sector-specific damage function. Mon Weather Rev 142(10):38813899, Sieg T, Schinko T, Vogel K, Mechler R, Merz B, Kreibich H (2019) Integrated assessment of short-term direct and indirect economic flood impacts including uncertainty quantification. 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. Pictured: The East Coast of the U.S. and the Gulf of Mexico viewed by satellite as Hurricane Florence made landfall on September 14. 2012), recent empirical studies focus on the shock propagation in production networks within the United States of America (Barrot & Sauvagnat 2016) or after single natural disasters, such as the 2011 earthquake in Japan (Boehm etal. The coefficients show the increase of the respective damage variable by one standard deviation. Proc Natl Acad Sci USA 107(35):1536715372, Hsiang SM (2016) Climate econometrics. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. Hsiang (2010) also finds the largest negative effects of tropical cyclones for the agricultural sector aggregate, while Loayza etal.

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