$67 billion of damage from Hurricane Harvey is directly attributable to climate breakdown, the costs of which have been severely underestimated. Also update from Heede and the Climate Accountability Institute

Houston Chronicle, June 2020 Climate crisis to blame for $67bn of Hurricane Harvey damage – study. Exclusive: new figure far higher than previous estimates of direct impact of global heating https://www.houstonchronicle.com/business/columnists/tomlinson/article/Coronavirus-costing-oil-gas-1-8-trillion-data-15327990.php

Fiona Harvey, The Guardian, Fri 12 Jun 2020

Flooding in Houston, Texas, after Hurricane Harvey in 2017
 Flooding in Houston, Texas, after Hurricane Harvey in 2017. Photograph: Mark Ralston/AFP/Getty

At least $67bn of the damage caused by Hurricane Harvey in 2017 can be attributed directly to climate breakdown, according to research that could lead to a radical reassessment of the costs of damage from extreme weather.

Harvey ripped through the Caribbean and the US states of Texas and Louisiana, causing at least $90bn of damage to property and livelihoods, and killing scores of people.

Conventional economic estimates attributed only about $20bn of the destruction to the direct impacts of global heating. Climate breakdown is known to be making hurricanes stronger and may make them more likely to occur, but separating the effects of global heating from the natural weather conditions that also cause hurricanes is complex.

Is climate change making hurricanes worse?

 Read more

In a study published in the journal Climatic Change, researchers used the emerging science of climate change attribution to calculate the odds of such a hurricane happening naturally or under increased carbon dioxide levels, and applied the results to the damage caused.

Similar methods were used in a separate study, published last month in the same journal, that found that droughts in New Zealand between 2007 and 2017 cost the economy about NZ$4.8bn, of which $800m was directly linked to climate change. Floods caused insured losses of about NZ$470m over the same period, of which NZ$140m was linked to the climate.

The researchers say the new tools are a more accurate way of estimating the economic damage caused by climate breakdown.

“We’re pretty sure the climate change-related damages associated with extreme events have been underestimated in most assessments of the social cost of carbon,” said David Frame, a professor of climate change at the Victoria University of Wellington and the lead author of the studies. “We think this line of research, as it matures, should provide a really valuable input.”

Friederike Otto, the director of the Environmental Change Institute at Oxford, who was not involved in the research, said the method could make it possible to generate global estimates of the true cost of climate breakdown, which could have a profound effect on how governments and businesses approach the need to reduce greenhouse gas emissions.

“We have known about the costs of climate change theoretically,” said Otto. “It’s all very well in the abstract, but the global mean temperature does not kill anyone – extreme events cost money and lives. Being able to attribute these impacts to climate change means being able to convey what climate change really means.”

She said it would become possible to compile an inventory of the damage that could be attributed to climate change around the world, which governments and businesses could use to bring about change. “Hopefully this will speed up the process of moving to net zero [carbon].”

Estimating the true costs of the climate crisis could also help developing countries seeking recognition of the loss and damage they face as a result of climate breakdown, which they argue should spur rich countries to provide more assistance. Loss and damage is likely to be one of the most vexed issues at next year’s UN Cop26 climate summit.

Legal actions around the world would also be affected, said Tessa Khan, a co-director of the Climate Litigation Network. Activists and local governments around the world are taking fossil fuel companies to court over their greenhouse gas emissions, arguing that they knowingly caused damage while profiting from raising carbon dioxide levels.

“[The two new studies] are opening to door to stronger evidence to persuade courts that fossil fuel companies should be held accountable for their role,” Khan said. “This will strengthen the legal basis of these lawsuits.”

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2 June 2020  Carbon Brief: Cost of extreme weather due to climate change is severely underestimated

Prof Dave Frame, director of the New Zealand Climate Change Research Institute at Victoria University of Wellington

Dr Suzanne Rosier, a climate scientist at the National Institute of Water and Atmospheric Research in New Zealand

Prof Ilan Noy, chair in the economics of disasters and climate change at Victoria University of Wellington

Dr Luke Harrington, a postdoctoral research assistant at the Environmental Change Institute at the University of Oxford

Over the past decade, a compelling body of evidence has linked a range of extreme weather events to human-caused climate change

This area of research – known as “event attribution” – provides a means for climate scientists to examine how the severity and frequency of weather events, such as heatwaves, droughts and storms, are changing as greenhouse gas concentrations rise.

In a pair of new journal papers, we have attempted to open up a new avenue for quantifying the “attributable costs” of weather-related disasters. We focus on recent droughts and floods in New Zealand and the landfall of Hurricane Harvey in Texas in 2017.

Using event attribution as the scientific basis for quantifying how extreme weather has changed, we have been examining the links between changes in extreme weather and their economic consequences.

If we can quantify the contribution from climate change to an extreme weather event and we can also know the cost of the associated disaster, then we can put a financial figure on the climate change component of those costs. These calculations then provide us with the price tag of climate change, through its impact on extreme weather events.

Quantifying attributable costs

In the two studies, both published in the journal Climatic Change, we look at droughts and floods in New Zealand during the decade 2007-17 and the landfall of Hurricane Harvey in Texas in August 2017.

The New Zealand Treasury estimated that two droughts in 2007 and 2013 jointly reduced GDP in New Zealand by around NZ$4.8bn (US$3.4bn in 2017). Using previously published methods, which used climate models to estimate changes in the types of weather patterns typical of severe New Zealand drought, we estimate that around NZ$800m (US$568m) of this cost is due to climate change.

We also analysed 12 extreme rainfall events, which contributed a total of around NZ$470m (US$334m) in insurance losses, by applying techniques used elsewhere. This involved running regional climate models thousands of times over, both with and without human influences, and looking at how often the events in question occurred in each case. Based on this, we estimate that around NZ$140m (US$99m) of those insurance losses were attributable to human influence on the climate.

The two sets of costs are not directly comparable – one measures reductions in economic performance and the other measures insured losses. The main insight is that event attribution is able to show that climate change is already causing significant losses to New Zealand. Climate change is not only a future problem, but it is costing us here and now.

Destroyed suspension bridge over Taieri River, Otago, New Zealand during floods in 2017. Credit: David Wall / Alamy Stock Photo.
Destroyed suspension bridge over Taieri River, Otago, New Zealand during floods in 2017. Credit: David Wall / Alamy Stock Photo.

Benchmarking social cost of carbon estimates

We also looked at the human climate change fingerprint on the damages associated with Hurricane Harvey that hit Houston, Texas, in 2017, which were strongly driven by torrential rain and extensive flooding. 

Previously published attribution studies, each using independent methods, found good agreement on attributable changes in the rainfall associated with Harvey: these conclusions formed the basis of our cost estimates. The results are striking: we estimate that around US$67bn of the Hurricane’s overall US$90bn are associated with climate change.

This is a far higher estimate than that which would be obtained from conventional economic models for the cost of climate change in the US, such as in the model built by Nobel Prize winner William Nordhaus. This model is underpinned by a 2017 study (pdf) from the US Environmental Protection Agency on the “social cost of carbon” – the financial damages caused by every additional tonne of carbon emitted into the atmosphere. Nordhaus’s model predicts total economic costs to the US economy in 2017, from climate change, to be around US$20bn. GlossaryINTEGRATED ASSESSMENT MODELS: IAMs are computer models that analyse a broad range of data – e.g. physical, economic and social – to produce information that can be used to help decision-making. For climate research, specifically,… Read More

The usual tools used to quantify the costs of climate change are called “Integrated Assessment Models” (IAMs). (See Carbon Brief’s detailed Q&A on IAMs.) IAMs have been developed with the premise that the main economic impacts associated with climate change arise from long-term changes to agricultural productivity and practice associated with rising average temperatures. They typically assume that the effects of extreme weather events – which are infrequent by definition – are relatively minor.

The actual numbers we have obtained could be too high or too low (that is the way with research). But even if they are an overestimate, the damages we attribute to Hurricane Harvey measures just the immediate damages from one single event, in a single city. It does not include the direct and indirect costs of disruption associated with this hurricane, nor the health impacts, nor the population displacement.

It also does not include the costs of other events that happened that year – Harvey was one of four major hurricanes to make landfall in the US in 2017 – nor the costs associated with changes in the environment that are unrelated to extreme events (for example, coastal erosion because of sea level rise).

Practically, the results from these initial papers suggest that common “top-down” approaches substantially underestimate the costs of climate change and that event attribution techniques can be applied to form a kind of “bottom-up” check on those estimates. 

Deploying this approach more widely could provide a useful check on IAM performance and add another valuable line of evidence to inform estimates of the social cost of carbon.

There are, of course, many uncertainties in any estimate of the human influence on weather events and in estimates of the costs of climate change. While some effects of extreme events are reasonably well-recorded, such as insurance losses, others are very difficult to measure, such as impacts on mental health and wellbeing.

Destruction from Hurricane Harvey in Port Aransas, Texas, on 28 August 2017. Credit: UPI / Alamy Stock Photo. W0MWC2
Destruction from Hurricane Harvey in Port Aransas, Texas, on 28 August 2017. Credit: UPI / Alamy Stock Photo.

Using attributable costs

The main significance of our new work is less in the exact numbers and more in the ability to link, more forensically, human influence on the climate to the economic impacts of disasters. 

There are several ways in which this line of research could be used:

1. By central banks and treasuries as they are increasingly asked to consider climate change-related risks. This line of evidence can provide innovative ways of analysing the problem and should help them deal with dynamic, climate-related fiscal and monetary risks.

2. By insurance companies and investors that may find attributable cost techniques useful as an additional line of evidence regarding the way their risks are changing.

3. By policymakers tasked with assessing the social cost of carbon; a number that may guide national emission targets. The forensic approach suggests that traditional, IAM-based social cost of carbon estimates are too low.

4. By parties wishing to pursue arguments regarding “loss and damage” arising from climate change, potentially including lawsuits. Loss and damage refers to the societal and financial costs of climate impacts that can no longer be avoided. The idea of developed countries – who are most responsible for climate change – compensating developing nations for these damages is an ongoing part of international climate negotiations.

5. By investors as they consider divestment, especially in light of (3) and (4). If the social cost of carbon is currently underestimated, and if our new approach can potentially lead to legal actions, then these constitute very powerful arguments for firms to accelerate their divestment initiatives.

Parched land during 2010 summer, Tukituki Valley, New Zealand. Credit: Paul Street / Alamy Stock Photo. BW4DWH
Parched land during 2010 summer, Tukituki Valley, New Zealand. Credit: Paul Street / Alamy Stock Photo.

With colleagues from around the world we are trying to develop further our approach. This involves thinking through methodological issues, clarifying the economic consequences of weather and climate events, and trying to assess which events are amenable to event attribution and which are not. There is much to do and much to learn, but much to gain from doing so.

In the long run, the integration of quantitative social science and climate change event attribution will help decision-makers have a richer, better and more accurate understanding of the effects of climate change on the economy. 

By looking as far along the chain from emissions to impacts as we can, we provide fresh evidence for decision-makers to consider as they grapple with the climate change challenge. By thinking through the economic consequences of human influence on extreme events, we think this can help move event attribution from the news cycle to the boardroom.

Frame, D. J. et al. (2020) The economic costs of Hurricane Harvey attributable to climate change, Climatic Change, doi:0.1007/s10584-020-02692-8

Frame, D. J. et al. (2020) Climate change attribution and the economic costs of extreme weather events: a study on damages from extreme rainfall and drought, Climatic Change, doi:10.1007/s10584-020-02729-ySharelines from this story

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Scientific American, May 2020

The Climate Accountability Institute (CAI), in collaboration with CDP (London), announces the publication of operational and product-use emissions attributed to fifty major oil and gas companies over the period from 1988 to 2015.Press Release: Carbon Majors 2015 update: six companies responsible for one-third of emissions from oil and gas sector since 1988.

The Climate Accountability Institute and CDP jointly announce the publication of the Carbon Majors Dataset. The Dataset points to the central role of the oil and gas sector in global carbon dioxide emissions and highlights the risks and opportunities of the industry to drive the transition to a low-carbon economy. The Dataset updates the Carbon Majors database of operational and product-use emissions attributed to the largest fifty investor and state-owned oil and gas companies from 1988 to 2015. This updates the original work by Richard Heede (2014) Tracing anthropogenic CO2 and methane emissions to fossil fuel and cement producers 1854-2010, Climatic Change, vol. 122(1):229-241; URL: http://link.springer.com/article/10.1007/s10584-013-0986-y?view=classic.

The Institute was established by Richard Heede, Naomi Oreskes, and Greg Erwin as a non-profit research and educ ational organization.

The Climate Accountability Institute engages in research and education on anthropogenic climate change, dangerous interference with the climate system, and the contribution of fossil fuel producers’ carbon production to atmospheric carbon dioxide content. This encompasses the science of climate change, the civil and human rights associated with a stable climate regime not threatened by climate-destabilizing emissions of greenhouse gases, and the risks, liabilities, and disclosure requirements regarding past and future emissions of greenhouse gases attributable to primary carbon producers.

Our vision is for a world protected from the social, economic, and environmental damages of climate change.

Our mission is to use climate accountability as a fulcrum for climate stewardship.

Our strategy is to leverage accountability by carbon producers into using their skills, capital, and resources to aid rather than oppose the transition to a low-carbon or zero-carbon energy future.

We are pleased to announce the publication of the Carbon Majors results. For more information please go here. For Publications go here.

“In my view, staying out of the fray is not taking the ‘high ground’; it is just passing the buck.”
—Steve Schneider Memorial Forum, Boulder, August 2011.

The Climate Accountability Institute announces a new paper: Heede and Oreskes (2015) Potential emissions of CO2 and methane from proved reserves of fossil fuels: An alternative analysis, Global Environmental Change.

News Update August 2015
The Climate Accountability Institute announces a new paper by Frumhoff, Heede, & Oreskes: The climate responsibilities of industrial carbon producers.

A “powerful, and gutsy” paper —Denis Hayes, Bullitt Foundation

News Update December 3, 2014
The Climate Accountability Institute is today releasing an update of the
Carbon Majors Project — detailing the emissions traced to the major industrial carbon producers in the oil, natural gas, coal, and cement industries — through the year 2013
Papers and charts available here.

News Update December 15, 2014
The Climate Accountability Institute is today releasing an analysis of
global fossil fuel and cement emissions of CO2 since 1751 that calculates
the proportion emitted since 1988 ‹ when the evidence and risks of
human-caused warming first became widely known.
Papers and charts available here.

Banner image is of Cyclone Catarina in the southern hemisphere that later hit the Brazilian town of Torres. Catarina was the first hurricane-intensity tropical cyclone ever recorded in the Southern Atlantic Ocean. Photographed from the International Space Station on 26 March 2004.