The social costs of tropical cyclones

Abstract

Tropical cyclones (TCs) can adversely affect economic development for more than a decade. Yet, these long-term effects are not accounted for in current estimates of the social cost of carbon (SCC), a key metric informing climate policy on the societal costs of greenhouse gas emissions. We here derive temperature-dependent damage functions for 41 TC-affected countries to quantify the country-level SCC induced by the persistent growth effects of damaging TCs. We find that accounting for TC impacts substantially increases the global SCC by more than 20%; median global SCC increases from US$ 173 to US$ 212 per tonne of CO2 under a middle-of-the-road future emission and socioeconomic development scenario. This increase is mainly driven by the strongly TC-affected major greenhouse gas emitting countries India, USA, China, Taiwan, and Japan. This suggests that the benefits of climate policies could currently be substantially underestimated. Adequately accounting for the damages of extreme weather events in policy evaluation may therefore help to prevent a critical lack of climate action.