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Of Blinders and Innumeracy

Elizabeth Kolbert has an article in the New Yorker on everyone’s favorite topic these days, hurricanes and global warming. The article is amazing because even though the data is staring Kolbert right in the face, she apparently cannot bring herself to grasp its implications for her argument.

Kolbert describes the problem: “In June, the Association of British Insurers issued a report forecasting that, owing to climate change, losses from hurricanes in the U.S., typhoons in Japan, and windstorms in Europe were likely to increase by more than sixty per cent in the coming decades. (The report calculated that insured losses from extreme storms—those expected to occur only once every hundred to two hundred and fifty years—could rise to as much as a hundred and fifty billion dollars.) The figures did not take into account the expected increase in the number and wealth of people living in storm-prone areas; correcting for such increases, the losses are likely to be several hundred per cent higher.”

Let’s first do some fact checking and take a look at what the Association of British Insurers report (PDF) actually says. Table 6.4 on p. 25 indicates that the ABI analysis shows a current total loss baseline of $16.5 billion for U.S. hurricanes, Japanese typhoons and European windstorms. And on p. 23 it notes that “If carbon dioxide concentrations doubled, total average annual damages from US hurricanes, Japanese typhoons and European windstorms combined could increase by up to $10.5 bn (¥1140 bn, €8.5 bn) from a baseline of about $16.5 bn today, representing an increase of around 65%.” So this is where she gets the more than sixty percent figure. So far so good, although the projected date for these changes in into the 2080s, a little bit further on than “coming decades.” But let’s move on.

But where does the number come from for the effects of societal changes, which she describes as likely to be “several hundred percent higher”? One has to go to the supplementary information to the report (PDF) to find this information. At p. 41 tables 3.8 and 3.9 one finds the data on projected wealth and population growth. Based on the numbers here, the combined effects of population and wealth on storm damages, independent of climate changes, would result in 2085 in total damages of $81.8 billion for U.S. hurricanes, Japanese typhoons and European windstorms, or an increase of $65.3 billion over the 2004 baseline. This is an increase of more than 600%, quite a bit larger than the “several hundred percent” reported by Kolbert.

Now, I do have some questions about the ABI study, which would be worth revisiting in the future, such as why it projects a combined annual rate of increase in wealth and population of only 2% for these regions. (The ABI seems unfazed by the apparent contradictory information it presents: “If Hurricane Andrew had hit Florida in 2002 rather than 1992, the losses would have been double, due to increased coastal development and rising asset values.” This represents about an 8% annual increase.) Also, The ABI’s estimates for increasing damages related to wind storms is roughly an order of magnitude larger than projected by the IPCC in its SAR. Reports such as those produced by the ABI can be extremely valuable, but they’d be more readily understood and placed into context if their analyses were submitted to the peer-reviewed literature.

But let’s press ahead. Kolbert’s column understates what the report actually says about the effects of growing population and wealth by a factor of 3. The ABI finds that future losses to wind storms are about 10 times more sensitive to societal factors than to climate factors. Yet even using the wrong numbers Kolbert writes a paragraph that clearly acknowledges the dominant role of societal changes in shaping future windstorm damages. And yet, when it comes to discussing policy options she focuses exclusively on the less significant factor:

“As the rest of the world has adopted Kyoto—earlier this year, the treaty became binding on the hundred and forty nations that had ratified it—these arguments have become increasingly indefensible, and the President has fallen back on what one suspects was his real objection all along: complying with the agreement would be expensive. “The Kyoto treaty didn’t suit our needs,” Bush blurted out during a British-television interview a couple of months ago. As Katrina indicates, this argument, too, is empty. It’s not acting to curb greenhouse-gas emissions that’s likely to prove too costly; it’s doing nothing.”

I do think that there is more than just political opportunism at work here. I simply don’t think that people are prepared to see the numbers right before their eyes. Part of this dynamic must be the effects of starting with a solution (greenhouse gas reductions) and searching for justifications, but part also must be related to the lure of silver bullet policy solutions rather than the difficult, yet mundane challenges of addressing the day-to-day decisions that cumulatively result in a tremendous increase in vulnerability to disasters. But if we are to address the ever-growing vulnerability of society to weather disasters we cannot continue to ignore the obvious.