ECONOMIC BENEFITS OF AN EARTH OBSERVATION SYSTEMS

• Statistics compiled from insurance companies from 1950-1999 show that major natural catastrophes across the globe caused economic loses of $960 billion. Thankfully, over the same period, loss of life was reduced in countries having good observing systems for warning and preparedness. (Source: Taking Nature's Pulse — All Over the Globe. Commentary. MTS Journal, Vol. 37, No. 3)
• Experts estimate that the agricultural sector benefits from weather services at a cost ratio of about 15 to 1. That is, farmers get about $15 of value out of every dollar spent on forecasting the weather. (Source: Taking Nature's Pulse — All Over the Globe. Commentary. MTS Journal, Vol. 37, No. 3)
• Studies show that national institutions that provide weather, climate and water services to their citizens contribute an estimated $20 to $40 billion dollars each year to their national economies. (Source: Taking Nature's Pulse — All Over the Globe. Commentary. MTS Journal, Vol. 37, No. 3)
• The annual economic return to the U.S. economy of NOAA’s El Niño ocean observing and forest system is between 13 percent and 26 percent. Any business would be happy to operate at a return of just five percent. (Source: Taking Nature's Pulse — All Over the Globe. Commentary. MTS Journal, Vol. 37, No. 3)
• Although the 1997-1998 El Niño cost the United States $10 billion ($3 billion from agriculture alone), it could have been a lot worse. For example, the 1997-1998 El Niño caused $1.1 billion in flood damage to California alone, but this is only half the amount associated with the comparable — but not forecast — 1982-1983 El Niño. The forecast of the 1997-98 flooding enabled such seemingly mundane things as repairing roofs and cleaning out storm drains. However, city planners feel that these actions mitigated the damages resulting from this forecasted El Niño in the amount of approximately $1 billion. (Source: http://www.noaa.gov/lautenbacher/oceanplanet.htm. Ocean Observations for the Ocean Planet. University of Delaware Vice Admiral Conrad C. Lautenbacher, Jr. NOAA Administrator. May 2, 2002 Speech)
• One new industry — seasonal weather derivatives — in the United States has seen exchanges between parties at a level of $2 billion per year in 1998-2000 and $4 billion in 2001. This has resulted in a total national value of $11.8 billion in weather risk management contracts over the past five years. (Weather derivatives are financial contracts in which money changes hands based on seasonal average temperatures, degree-days, or precipitation amounts). (Source: Taking Nature's Pulse — All Over the Globe. Commentary. MTS Journal, Vol. 37, No. 3)