Shower power

Thursday 23rd Jun 2011 by theWeather Club

Everybody knows there's no such thing as a free lunch – but even the most hardened of cynics will surely find the news that there's no such thing as a free downpour somewhat surprising.

New research published this week by the National Centre for Atmospheric Research (NCAR) indicates that routine weather events can add up to an annual economic impact of as much as $485 billion in the United States, once thier various impacts on different industry sectors have been combined.

Far from being confined to tornadoes and floods, the NCAR's pioneering study suggests that even the most unremarkable weather events – rain, cooler-than-average days – can have an effect on the economy, with the sum influence of these day-to-day variations adding up to as much as 3.4 percent of U.S. gross domestic product.

"It's clear that our economy isn't weatherproof," said NCAR economist Jeffrey Lazo, the lead author, in a statement. The report went on to describe how the weather "indirectly and directly affects production and consumption decision making in every economic sector of the United States... from very local short term decisions about whether or not to pour concrete on a construction project to broader decisions of when to plant or harvest a field, to the costs of rerouting an airplane around severe weather, to peak demand electricity generation in response to extreme heat, to early season snow for a bumper ski season in Colorado, drought in the Midwest, or wind-fuelled wildfires in California".

Inevitably the impacts of the weather varied hugely between sectors – mining and agriculture being particularly sensitive industries – and between states, with New York showing the most susceptibility to shower/sun power in terms of gross economic output and Tennessee showing the least.

As the first study to apply quantitative economic analysis to the weather sensitivity of the entire economy, the results could potentially help U.S. policymakers determine whether it is worthwhile to invest in enhanced forecasts and other precautionary measures. However, the research has not taken into account the impact of extreme weather events on the economy which – given the onslaught of tornadoes the states has experienced this year and the expectation that climate change will lead to more flooding and heat waves – are likely to prove very costly indeed.