Financial guru Warren Buffett has said that natural disasters, such as Hurricane Katrina and Japan's earthquake, have a greater economic impact than terrorism. These disasters, as well as tornadoes, floods and tsunamis, cost the insurance industry billions. If large enough, they can slow economic growth for decades. Global warming, according to a UN study, causes increased natural disasters. Perhaps the Sage of Omaha would agree that a War on Global Warming would be a better use of Federal funds than the War on Terror.
Most estimates put the economic loss from Hurricane Katrina at $125 billion, with $66 billion in insured losses. Half of these losses were a result of flooding in New Orleans. University of North Texas Profession Bernard Weinstein put the loss as high as $250 billion.
The 2011 Mississippi River flood was a 500-year event. Total economic damage could reach several billion. Why? The Mississippi River runs past farmlands and cities in six states. The flood's greatest damage could come when it empties in New Orleans, still recovering from Hurricane Katrina.
The largest tornado outbreak in U.S. history occurred April 25-27, 2011. In that week, 305 twisters damaged the Southeast, breaking the 1974 record of 267 tornadoes. The outbreak caused $5 billion in damage. One single tornado in 1999 cost $1 billion alone. Although experts disagree, there is reason to believe these expensive outbreaks will get worse.
Japan's economy was dealt a devastating blow by the 9-magnitude earthquake and tsunami that pummeled the country on March 11. An estimated 28,000 died, and 500,000 were displaced. It damaged the Fukushima nuclear power plant, which leaked radiation into the Pacific Ocean, raising levels to 4,000 times the legal limit. It could take months to stop the leak. Radiation has shown up in local milk and vegetables, and briefly appeared in Tokyo's drinking water. The World Bank estimates that Japan's disaster will cost between $100-$235 billion, and take five years to rebuild.
Volcanic clouds and ash from the May 21 2011 eruption in Iceland threatened air traffic in Scotland, Ireland, France and other hubs in the northern EU. Even though the Grimsvotn volcanic eruption was bigger than the previous year's, it wasn't as destructive economically. That's because the ash wasn't as dense, and dispersed more easily. Iceland's 2010 volcanic eruption closed European airports for six days, costing airlines $200 million a day.
Between 200,000-250,000 people were killed by the 7.3 magnitude earthquake that ravaged Haiti in January 2010. That was 2%% of the total Haitian population of 10 million. The Inter-American Development Bank estimated that it cost $8.5 billion in damage to Haiti's economy. The earthquake caused the country's GDP to contract 5.1% that year.
Ike damaged pipelines in the Gulf of Mexico and destroyed 10 Gulf offshore oil rigs, which were shut down as were all 22 Texas-based land-based oil refineries. This part of Texas is home to a quarter of U.S. crude oil and refinery production. As a result, gas prices spiked to $5 a gallon, prompting the government to open the Strategic Petroleum Reserves.
Between 1956-2005, the Earth's average temperature rose .13°C each decade. This might not seem like much, but that's double the rate for the 100 years between 1906 to 2005. Antartic glaciers are losing mass at an "unusually rapid" rate. Satellite pictures taken between 1992 and 1996 showed that the Pine Island Glacier was losing mass at a rate 42 times faster than the average over the preceding 5,000 years. Higher temperatures are causing loss of timber (thanks to the bark beetle), and more chaotic weather patterns. The result? More frequent and severe natural disasters.