Harvey to cost Texas US$58b in losses: Report

PARIS: Economic losses in Texas from Hurricane Harvey, which is still pounding the water-logged US state with rain, will be about US$58 billion (€49 billion), disaster analysts in Germany said on Thursday (Aug 31).

A view of the Houston skyline after heavy rains broke in the aftermath of Hurricane Harvey, as seen on August 29, 2017 AFP/Brendan Smialowski

If that estimate holds, it would make Harvey the world’s ninth most expensive natural disaster since 1900, according to the Centre for Disaster Management and Risk Reduction Technology (CEDIM) in Karlsruhe, Germany.

It would also push the yearly economic loss from earthquakes, floods, tsunamis, cyclones and other natural cataclysms past US$100 billion for the eighth year in a row.

“The damage is extensive at around US$58 billion, and is over 90 per cent due to flooding,” said James Daniell, senior risk engineer at CEDIM, and head of its Forensic Disaster Analysis Group.

The estimate carries uncertainty range from US$41 billion to US$80 billion.

“Depending on the next couple of days, we may see this estimate rise, as it only includes Texas at this point,” he told AFP.

The total “flooded exposure” – the value of all the capital stock inundated by water, whether five centimetres or five metres – in the affected area was estimated at US$267 billion.

Other calculations of total economic loss have been considerably lower.

German insurance giant Hannover Re’s initial figure for damages was US$3 billion, while JP Morgan estimated the insurance sector could be out US$10-20 billion. Disaster risk specialists Enki Holdings, based in Savannah, Georgia, put the total tab at above US$30 billion.

41,000 NATURAL DISASTERS SINCE 1900

The CEDIM estimates are based in part on the largest database of natural catastrophes in the world, covering more than 41,000 events since 1900. They also reviewed new TerraSAR-X satellite data, which indicates a flood “footprint.”

To measure the region’s risk exposure, Daniell and his team used data from the US Bureau of Economic Analysis, which tracks investment.

“But we also checked that against building and replacement cost data,” Daniell said. “That’s usually the issue with a lot of other models – they don’t get the exposure right.”

Total capital stock in Texas is about US$4.5 trillion, and for the entire United States the figure is about US$56 trillion, he said.

The natural disaster with the highest economic costs – US$218 billion was the 2011 Tohoku earthquake, which generated a monster tsunami that devastated a large swathe of Honshu Island and crippled a nuclear power plant.

In second place is the earthquake that levelled part of China’s Sichuan Province in 2008 (US$162 billion), followed by Hurricane Katrina, which destroyed much of New Orleans in 2005 (US$160 billion).

CEDIM’s detailed report on Hurricane Harvey’s impact on Houston can be found here.

Source AFP



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