“We got a little bit lucky,” said President Donald Trump about the storm which killed at least six people in Louisiana, ripped apart buildings, left more than half a million homes without power, and triggered a chemical fire from an industrial plant over Lake Charles.
Of course, Trump was glad he didn’t have to postpone his speech at the Republican National Convention.
But while Hurricane Laura did not, thankfully, produce the catastrophic storm surge some predicted—weakening into a tropical storm—it represents an unmistakably escalating trend of extreme weather events due to increasing global temperatures.
Hurricane Laura had followed hot on the heels of Hurricane Marco. The Atlantic hurricane season has already broken records with 13 named storms, which meteorologists consider well above-normal activity.
Recently published scientific studies suggest that the devastation wrought by Laura, and the potential catastrophe only narrowly avoided, are likely to become a ‘new normal’ if we continue to pump carbon emissions into the atmosphere.
Billion dollar disasters
Earlier in August, the US-based Environmental Defense Fund (EDF) published a major report on exactly this issue, titled Climate Change-Fueled Weather Disasters: Costs to State and Local Economies.
The report brought together data from the National Oceanic and Atmospheric Administration (NOAA) Billion-Dollar Weather and Climate Disasters database with other studies, to build a stark picture of what we now know about extreme weather risks.
The report points out that since 1980, the number of extreme weather events per year in the United States has increased fourfold, with annual direct cost of these disasters increasing fivefold.
In fact, they have catalogued a total of 258 extreme weather disasters within that period, each of them wreaking levels of havoc that cost upward of a billion dollars. Cumulatively, the total direct cost of all of these disasters is already more than $1.75 trillion.
And if climate change continues on a business-usual-trajectory, these costs are predicted to get bigger and bigger.
Sleepwalking into a perfect storm
“Climate models project that even with a moderate increase in greenhouse gas emissions, by the end of this century, the frequency of Category 4 and 5 hurricanes in the Atlantic Basin could increase by 45-87 percent, putting the continental United States at risk,” warns the EDF report.
It further points out that these risks will increase if we do nothing to stop climate change: “In the absence of climate policy to rapidly reduce emissions, we can also expect greater frequency or intensity of five other categories of weather disaster”—namely, severe storms, floods, freezes, drought, and wildfires.
There’s not a single state in the US which has escaped extreme weather—every one of them has suffered at least one of what the report describes as a “billion-dollar weather disaster.”
But five states in particular have been hit repeatedly by every single type of disaster: “North Carolina, Georgia, Alabama, Mississippi, and Texas have each endured several billion-dollar hurricanes, severe storms, floods, winter storms, freezes, droughts, and wildfires.”
The trillion dollar costs of business-as-usual
The report also lays out some important facts that allow us to arrive at some reasonable estimates of how these impacts and costs would intensify under continuing climate change.
Since 2005, the US federal government has paid out roughly $30 billion a year to respond to extreme weather disasters. But from 2016-2018, the US has experienced disaster costs on average exceeding $150 billion a year. And total damages to the US mainland from the 2017 Atlantic hurricane season (comprising hurricanes Harvey, Irma, Jose and Maria) amounted to some $265 billion.
These costs are set to increase dramatically if global average temperatures continue to rise. The EDF report notes that every 1° Celsius (C) of warming will generate roughly $257 billion of costs to the US every year from extreme weather impacts. This is consistent with the fact that current global average temperatures have, indeed, already increased by around 1°C since 1880.
That means that on a business-usual-trajectory, when we hit another 1°C higher to reach around 2°C of warming, annual US disaster relief expenditures will more than double to around $514 billion.
Right now, we are well on our way toward this scenario. Another study published earlier in August in the Proceedings of the National Academy of Sciences concluded that current carbon emission levels are consistent with the UN Intergovernmental Panel on Climate Change’s (IPCC) worst-case scenario for a 4.3°C world by 2100.
While actual emissions are expected to slow-down below the worst-case due to a big drop in coal use which the IPCC model doesn’t account for, this still means it’s plausible to anticipate that we are on track to hit 1.5°C between potentially as early as around 2030, and to breach the 2°C mark by around 2050.
If annual costs rise from the EDF’s average of $257 billion to $514 billion a year from 2020 to 2050, this will amount on average to an annual increase of $8.56 billion every single year.
Which means that on a business-as-usual global heating trajectory, extreme weather impacts will cost the US a total of $12 trillion by 2050.
In other words, within 30 years, the US will pay out over 60 percent of its current level of GDP in extreme weather costs due to climate change. This means that if we do nothing about climate change, extreme weather alone is going to increasingly push the US economy into a state of permanent recession through to the end of the century.
The real culprits: Big Oil
But this level of damage is also going to directly hit the bottom line of the biggest carbon-emitting American companies.
One study released in June lead authored by physicist Dr Quintin Rayer, who heads up research at the UK-based financial consultancy firm, P1 Investment Management, argues that if these costs were applied to the world’s biggest carbon-emitting companies, it would considerably damage their share pricing, profitability and market values.
Rayer identifies the top seven carbon-emitting publicly listed companies as follows: ExxonMobil, Royal Dutch Shell, BP, Chevron, Peabody Energy, Total, and BHP Billiton.
Together, these companies are responsible for 9.5 percent of all carbon emissions from so-called ‘Scope 1’ and ‘Scope 3’ emissions—respectively, direct emissions from owned or controlled sources, and all other indirect emissions that occur in a company’s value chain. (These different ‘scopes’ are categories from the Greenhouse Gas Protocol, an accounting and reporting standard developed by the World Resources Institute.)
This makes them directly responsible for the increased risks of extreme weather, and suggests that a significant percentage of the costs of extreme weather impacts should be allocated to these firms.
If that was applied, Rayer calculates, these fossil fuel firms would “increasingly see around 1-2 percent losses on their market capitalizations (or share prices) from North Atlantic hurricane seasons.”
This, in turn, has important implications for financial markets: “It is uncertain to what extent climate risks are priced into fossil companies’ share prices, and cautious investors might be concerned.”
But right now, it’s not fossil fuel companies that are paying the price. It’s taxpayers.
This time last year, the National Bureau of Economic Research estimated that the fall-out to the American economy from extreme weather would reach as high as 10.5 percent of US GDP by 2100.
More recent studies find this could be even higher. A peer-reviewed paper in Climatic Change released in November 2019 found that if we continue on our current course, “extreme risks” will have increased by 3-5.4 times by 2060. By 2100, the study concludes, climate-induced extreme weather events could shave off as much as 16 percent from the GDP of the American economy.
As time goes on, our assessments of the risks and costs of climate change keep getting worse. The best scientific data proves that escalating climate change will gradually and inescapably destroy our economic prosperity, unless we take urgent action.
In other words, if we fail to reign in the biggest fossil fuel producers, slash carbon emissions and transition to a renewable energy system, the probability that we will get “lucky” with coming hurricane seasons will rapidly diminish.