Weather Carries Big Cost
New report says economic toll of weather will reach $485 billion.
Compiled by staff
Published: Jun 28, 2011
This week the industry website Feedstuffs Foodlink reports that new research shows routine weather including rain and cooler-than-average days could add up to an annual economic impact of as much as $485 billion.
The study, led by the National Center for Atmospheric Research, found that finance manufacturing, agriculture and every other sector of the economy are sensitive to changes in the weather. This is the first study to apply a quantitative economic analysis to estimate the weather sensitivity of the entire U.S. economic. The research could help policy makers determine wheather it is worthwhile to invest in enhanced forecasts and other strategies that could better protect economic activity from weather impacts.
This report did not calculate the added costs associated with extreme weather events - which have been more common in 2011. And the report didn't include any impacts of climate change, which is expected to lead to more flooding, heat waves and other costly weather events, NCAR says.
The report notes that the economic influence of routine weather variations can be as much as 3.4% of U.S. gross domestic product.
NCAR reported that weather can affect both demand and supply of various sectors, with complex and sometimes countervailing influences on the overall economy. A snowstorm, for example, may disrupt air travel and drive up heating costs while boosting subsequent attendance at ski resorts. A prolonged dry spell can affect crop supplies yet enable construction projects to remain on schedule.
Previous studies looked at weather influences on particular economic sectors or produced subjective estimates of overall weather impacts, NCAR reported. In contrast, Lazo and his colleagues combined historical economic data with economic modeling techniques to produce a detailed analysis of the U.S. economy's sensitivity to temperature and precipitation.
The results indicate that the mining and agriculture sectors are particularly sensitive.
Agriculture ranked second, at 12%, conceivably because of the many crops that are affected by temperature and precipitation, NCAR notes.
You can check out more details at the Feedstuffs Foodlink website, just visit Weather costs.
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