Hurricane Irene: $35 Billion In Damages?
As Hurricane Irene slowly thrashes up the eastern seaboard, statisticians are racing to put a dollar value on how much damage the storm is likely to cause. As they pack up their bags to evacuate, of course. Though the various models vary considerably in their estimates, one thing remains certain: this is going to be a multi-billion dollar disaster.
AP reports: “The economic impact of the hurricane largely will depend on factors that include the storm’s size, where it makes landfall, and the speed at which it’s moving when it hits the coast. But experts already are forecasting billions of dollars in losses.” One such expert, University of Colorado professor and hurricane Roger Pielke, estimates the property damages to be $4.7 billion.
Shockingly, this is a conservative estimate.
Pielke only looks at the value of property he expects to be destroyed. If, for example, a tree falls on a power line and it costs $10,000 to replace, his model counts this as a 10K damage. If, however, the loss of power to the area means that businesses can’t stay open or people who work from home can’t get internet or power then the total economic cost would be far in excess of $10,000.
Nate Silver, statistical wunderkind of 538.com fame, attempts to account for all of these side effects of the hurricane. In his classic style, he gives best and worst case scenarios based on what kind of storm might hit and where, centering his focus on New York. If a Category 2 storm directly hits New York City — a highly unlikely turn of events — then he projects $35 billion in damages. If, on the other hand, as lightly weaker storms passes 50 miles away, the reported damage shrinks to $6 billion, no small chunk of change either way. Given the storm tracker (as of 6:45 PM), this seems a much more likely scenario.
No matter what model you look at, this is has the potential to be an economic catastrophe. In terms of perspective, the total annual cost of the wildly successful Women, Infants, Children program is $7 billion — just above Nate Silver’s conservative estimate. Likewise, the projected monetary cost of the damages is about the same as the cost of over 20 days in the expensive and unpopular war in Afghanistan.
What’s perhaps most frightening about these high numbers is that the government may not even help in hurricane relief. House Majority Leader Eric Cantor has already vowed to block any earthquake relief that is not offset with spending cuts; it seems unlikely that he will approach the hurricane any differently.
That’s just American politics these days: allow corporations to pollute so much that it precipitates natural disasters, then not help those who are most hurt by them. I guess the good news is that if the hurricane does indeed hit New York, as long as Wall St. has some damage there might be some relief after all.
Photo from NASA Goddard Photo and Video via flickr.