Earth Policy News: Hurricane Damages Soar to New Levels

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At 09:52 AM 8/29/06, you wrote:

 

>Eco-Economy Update 2006-8

>For Immediate Release

>August 29, 2006

>

>

>HURRICANE DAMAGES SOAR TO NEW LEVELS

>

>Insurance Companies Abandoning Homeowners in High-Risk Coastal Area

>

>http://www.earth-policy.org/Updates/2006/Update58.htm

>

>

>Janet Larsen

>

>

>Damage from hurricanes is soaring off the charts, bankrupting insurance

>companies and depriving property owners of insurance in high-risk areas.

>During the 1960s, worldwide damage from windstorms with economic losses of

>$1 billion or more totaled just $4 billion. In the 1970s the figure rose

>to $7 billion, and in the 1980s it topped $24 billion. Next came the

>1990s, when hurricane losses soared to $113 billion. Then during the six

>years from 2000 to 2005, hurricanes left a staggering bill of $273

>billion. (See data at www.earthpolicy.org/Updates/2006/Update58_data.htm.)

>

>Two trends are largely responsible for the growing costs of windstorm

>disasters. One, rapid coastal development is bringing more people and more

>expensive infrastructure into vulnerable areas. And two, hurricanes

>(called typhoons in the western Pacific) are growing stronger and lasting

>longer, fueled by higher sea surface temperatures. They are also widening

>their geographic range, invading areas previously considered safe from the

>wrath of windstorms.

>

>Last year was the worst ever for storm-stricken areas and the companies

>that insure them. Losses from the eight major storms of 2005 exceeded $170

>billion, half of which was insured. Three of the storms were in the

>Pacific, but the Atlantic storms racked up 98 percent of the economic costs.

>

>The unusually long North Atlantic hurricane season that extended from June

>into the New Year brought a record 28 named storms, taking us through the

>alphabet and into Greek letters. This is nearly three times the average

>annual number of storms over the past century. Fueled by high surface

>water temperatures, four hurricanes--Emily, Katrina, Rita, and

>Wilma--reached maximum strength, the highest number of Category 5 storms

>ever in a single season.

>

>Hurricane Katrina, which struck the Gulf Coast of the United States in

>late August 2005,was the most financially devastating storm on record,

>with damages from winds and the record storm surge exceeding $125 billion.

>Although Katrina reached top wind speeds of 175 miles (282 kilometers) per

>hour, it had weakened to Category 3 by the time it hit the U.S. Gulf

>Coast. Powerful Rita’s arrival a few weeks later marked the first time two

>Category 5 storms developed in the Gulf of Mexico in one season. Then came

>Wilma, which devastated parts of Mexico’s Yucatan Peninsula and went down

>in history as the most intense Atlantic storm ever.

>

>Storms in 2005 were not only strong, they were more widespread. Hurricane

>Vince, which struck Spain in October, traveled farther north and east than

>any Atlantic tropical cyclone. A month later, Tropical Storm Delta also

>moved into uncharted territory for Atlantic hurricanes, crossing the

>Canary Islands. Stronger storms in unexpected places, like these and

>Brazil’s 2004 Hurricane Catarina, the first hurricane recorded in the

>South Atlantic, are prompting insurance companies to rewrite their

>catastrophe models.

>

>Of the 90 or so tropical cyclones that are born each year, about half grow

>strong enough to be classified as hurricanes. The ingredients needed to

>whip up a hurricane are sea surface temperatures of at least 79 degrees

>Fahrenheit (26 degrees Celsius) and favorable wind conditions. Higher sea

>surface temperatures drive more-powerful storms.

>

>Over the last three decades, tropical ocean surface temperatures have

>risen by nearly 1 degree Fahrenheit (half a degree Celsius), an increase

>of a scale not seen in at least 150 years and perhaps unprecedented over

>several thousand years. Kerry Emanuel of the Massachusetts Institute of

>Technology reports that hurricanes and typhoons in the Atlantic and North

>Pacific have doubled in power over this period. Storms are also lasting

>longer than before. And as temperatures rise from increased greenhouse gas

>emissions, even stronger storms are on the horizon. Warmer air also holds

>more water vapor, increasing rainfall and thus flooding.

>

>Already more hurricanes are reaching the top-rated Category 4 and 5

>strengths. Scientists from the Georgia Institute of Technology have shown

>that in ocean basins around the world, one out of every three hurricanes

>in the 1990s and early 2000s became that powerful, compared with fewer

>than one out of every five during the late 1970s and 1980s. Stronger

>storms are disproportionately more destructive. While a Category 1 storm

>has wind speeds of 74­95 miles per hour and can result in a storm surge of

>some 4 feet (1.2 meters) above normal, a Category 5 storm--with double the

>wind speed--can bring on a storm surge of more than 18 feet.

>

>The recent spate of powerful hurricanes in the southern United States has

>put many insurers out of business or into liquidation, leaving customers

>scrambling to find new coverage, an increasingly difficult endeavor. Many

>hurricane-prone property owners are facing a doubling or tripling of

>insurance rates over the next several years. The world’s largest insurer,

>American International Group Inc., is no longer taking on new policies in

>some Gulf Coast communities. Allstate, one of Florida’s largest insurers,

>dropped 95,000 policies in 2005 and plans to drop an additional 120,000

>this year. As state or federal insurers jump in to cover properties that

>private companies will no longer touch, essentially subsidizing

>development in risk-prone areas, they often incur large deficits that

>someone, generally the taxpayer, must cover.

>

>Not only are southern states affected: Allstate is dropping 28,000 of its

>New York policyholders as well. Neither Allstate nor MetLife will take on

>additional customers on Long Island, New York, which was the direct target

>of the legendary 1938 “Long Island Express” Category 3 hurricane.

>According to AIR Worldwide, a risk-modeling and technology firm that

>serves the insurance industry, a Category 5 storm hitting the New York

>area today would incur $96 billion in losses. In Miami, a storm of that

>strength would rack up a bill of $155 billion.

>

>More than 40 percent of the U.S. population resides in coastal counties,

>many of which are growing fast. The country’s most rapid population growth

>has been in Florida, the state most at risk from hurricanes, with 1,350

>miles of coastline and no point farther than 80 miles from the water. The

>population along the hurricane-prone coast between North Carolina and

>Texas more than tripled, from 10 million to nearly 35 million, over the

>past 50 years.

>

>One in every 10 people on the planet lives in an extremely vulnerable zone

>within 60 miles of a coastline and less than 33 feet above sea level, and

>more people seem to be heading in that direction. In developing countries,

>where insurance now covers less than 2 percent of the costs of “natural”

>disasters (compared with the United States, where half are insured),

>hurricanes can set back development by decades. When Hurricane Mitch hit

>Honduras and Nicaragua in 1998, for example, it took more than 11,000

>lives and left a destruction bill exceeding the two countries’ gross

>domestic products.

>

>Stronger storms coupled with larger vulnerable populations represent a

>recipe for economic and humanitarian disaster. The $273 billion in damages

>from major storms so far this decade will continue climbing. Departing

>from the temperatures we have known means that the past can no longer be

>used as a guide to the future. Climate patterns become more difficult to

>anticipate and the risks harder to predict.

>

>At some point, the human tides may turn and more people may move inland,

>as we have recently seen with the abandonment of communities ravaged by

>Katrina. In the meantime, the question becomes not whether we can afford

>to reduce the carbon emissions that are raising the earth’s temperature,

>but whether we can afford not to.

>

># # #

>

>Additional data and information sources at www.earthpolicy.org or contact

>jlarsen (at) earthpolicy.org

>

>For reprint permission contact rjk (at) earthpolicy.org

>

>

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