WEATHER IMPACT ON USA ECONOMY
November 1, 2001 Each year weather events have major economic impacts on the U.S. economy. Estimates vary, but up to 2.2 trillion dollars of the economy are believed to be affected annually by weather and climate events, according to Dean John Dutton of Pennsylvannia State University. These include agriculture, forestry, fishing $125B; energy resource extraction $89B; public utilities $2.7B; finance and insurance $260B; construction $373B; retail trade $782B; hotel and recreation $147B; and transportation $218B. (Click image for larger view.)
During the 21st century, unprecedented situations will arise where weather, water and climate events could significantly challenge the way Americans live or cause dramatic changes in the economy.
The U.S. sustained 49 weather-related disasters over the past 21 years each of which sustained overall damages and costs of $1 billion or more, with total damages and costs exceeding $185 billion. Seven occurred during 1998 alonethe most for any year on record. Tropical Storm Allison in June 2001 was a $5 billion disaster.
Not only does weather have direct and indirect economic impacts, but information about the weather has become an integral part of the nation's economic infrastructure.
The innovative use of weather, water and climate information will increase our safety and productivity and improve the nation's competitiveness to enhance our standard of living.
A recent study found that the long-range predictions issued by NOAA's Climate Prediction Center for the 1997-98 El Niño led California to conduct major mitigation efforts leading to a reduction in losses of about $1 billion.
Perhaps the best recent example of a business opportunity created by increased availability of weather and climate information is weather risk management which has mushroomed into an $8 billion economic sector.