Economic Impact of Natural Disasters

Natural disasters are catastrophes hauled by the nature on man. They may bring about large scale destruction depending on the type of natural disaster. Natural disasters include a range of hazards which may cause widespread devastation and human and animal casualties. They range from floods, earthquakes, hurricanes, cyclones, tornadoes, tsunamis, avalanches, volcanic eruptions, famine, heat wave and droughts etc. Natural disasters in the past were mostly unpredictable however, with the advancement of science and technology numerous authentic ways of previously detecting the possibility of natural disasters have developed.

Nevertheless, even with the invention of modern scientific ways and pre-disaster preparations, human societies are not completely safe from the terrible outcomes of the disasters. The calamities bring with them huge destructions to land, property, human lives and the economy of region concerned. Natural Disasters are not only destructive for the land, people and buildings; they are also at times economically crippling. “Natural disasters affect people and their livelihoods or their ability to earn a living and support their families.

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Ultimately, then, severe natural disasters not only destroy people and property, they also affect the economy of the affected region. ” (Stoltman, Lidstone and Dichano p. 297) Disasters heavy burden on the economy of the government since it has to make huge monetary expenditures on the recovery of the catastrophe-stricken area and rehabilitation of the victimized population. “These actions may lead to the postponement of or abandonment of planned investments, reductions in the provisions of public services and deferment of wage and salary increases and of staff appointments.

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” (Benson and Clay p.

29) This may mean huge losses will be incurred to the economy from this aspect as well in the long run. It is also believed that since in modern times the possible occurrence of a disaster can be predicted, the government has to take safety steps which also incur huge costs; though these safety measures may not even be able to fully protect the area from destruction, which is true in most cases. Hence the cost spent of safety measures is also nearly lost. In the United States natural disasters have been quite frequent and the governments during different times have been able to cope with the economic stress brought about by the calamities.

However, sometimes exceptions did exist especially in the past when the technology was not as developed as it is today and the pace with which the rehabilitation should occur was not as fast as in today’s advanced society. America has faced all kinds of disasters from floods, hurricanes, cyclones, volcanic eruptions to heat waves, blizzards and tsunami. Hurricanes and cyclones have been more frequent in some areas prone to such type of disasters. North America especially the United States has generally been successful in holding down the death tolls even in very destructive incidents.

(Stoltman, Lidstone and Dechano p. 323) Some natural disasters which occurred in the United States are being discussed from the point of view of the economic destruction they brought. Super Outbreak The largest and the worst known and recorded outbreak of a series of tornadoes over a period of 24 hour in nearly thirteen states of USA took place on 3rd and 4th of April, 1974 and are known as the super outbreak. It is believed by some to the “worst out break of the 20th century”.

(Super Outbreak NOAA) 148 confirmed tornadoes caused widespread damage and destruction in Illinois, Indiana, Michigan, Ohio, Kentucky, Tennessee, Alabama, Mississippi, Georgia, North Carolina, Virginia, West Virginia, and New York. It extensively damaged approximately 900 square miles (1,440 square kilometers) along a total combined path length of 2,600 miles (4,160 km). (Super Outbreak Wikipedia). Reported to have begun around the afternoon and continued for a huge duration of 18 hours, the super outbreak lead to large number of casualties, injured and great loss to the buildings and revenue.

According to the statistics caused 315 to 330 people’s deaths altogether in all the affected states, 5,484 victims were injured and 27, 590 families suffered the losses of the disaster. Overall estimated damage ranges from $3. 5 billion to $6. 0 billion according to varying sources. (Statistics taken from “Super Outbreak” Wikipedia and NOAA). Most of the losses incurred were due to the property damage, damage to basic facilities of life like roads, rail tracks which form the means of communication to other areas were severely affected.

Tornadoes incurred maximum damage in areas where their intensity was at their peak. “Hanover was 90% damaged and destroyed. ” (Super Outbreak Wikipedia)The task of rehabilitating the areas was not a small one; in fact it spread over 13 US states and a heavy burden was on the government. The estimated cost of the damage to the Hanover College alone was about $10 million. (Super Outbreak Wikipedia) Estimated damage to about 11 schools amounted to $7, 705, 000 in total with some schools not being included in the list.

(Super Outbreak NOAA) Rebuilding huge structures is a humungous task. The recovery of all the basic facilities of life like availability of food, water and shelter and means of communication along with the availability of electricity; all had to be provided efficiently and effectively to all the victims of the disaster. In addition the medical costs of those injured had to be met by the government. Measures had to be taken to prevent disease epidemics from erupting in areas facing sanitation problems.

These costs were those which had to be used in investments and on other progressive developmental projects, however, due to the disaster a huge amount was now spent on rehabilitation and recovery of victims of the super outbreak. This did not put a temporary burden on the government’s economy but actually affected all those possible ways of economic progress which were being sought through future investment plans. Louisiana Flood 8th May, 1995 “The United States has a long history of attempting to deal with hazards beginning with floods and focus has been on mitigation.

” After experimenting with dams, levees also became discredited after the expenditure of $200 million in 1927. “That year a massive flood left 250 dead and 700,000 temporarily homeless. ” (Stoltman, Lidstone and Dechano p. 326) This proved that no matter what preventive measures may be taken, the losses incurred by the natural disasters (may they be losses of life or economic losses) cannot be fully prevented. Another huge disaster experienced in the history of natural disasters in the USA was the Louisiana flood of 1995. The flooding was actually on set by excessive continued raining from 7th till 8th of May, 1995.

Cities like Jefferson Parish and Orleans Parish, including the cities of New Orleans, Metairie, Kenner, River Ridge, Harahan, Slidell, and Covington etc. All these areas were severely affected and experienced huge losses due to the flood. Six people died as a result of the flooding. The city of New Orleans suffered $360 million in damages, and the damage of the surrounding areas put that total above $1 billion. Some 56,000 homes were damaged in 12 Parishes. Thousands of cars were flooded. 14,600 homes and apartments were flooded in Jefferson Parish.

The cause of the massive rain fall totals was a stalled out frontal system from the northwest. It produced a train effect, in which rain and/or thunderstorms continued to form over the same area. Pumping stations were overwhelmed and could not pump out the water into Lake Pontchartrain. The pumping stations are only rated to pump one inch per hour maximum. (May 8th 1995 Louisiana Flood Wikipedia) In addition to meeting the huge costs of restoration of normal living standards, the government was also concerned to take steps to prevent such disastrous conditions as much as possible in the future.

The countries economy was once again weighed down by the responsibility of taking prospective and effective safety measures. Such catastrophic rainfall floods were planned to be prevented by building high costing much more effective pumps to remove the rain water before build up develops. 1994 Northridge Earthquake The Northridge earthquake occurring on the January 17th 1994 caused large scale devastation and a lot of economic damage as compared to its relatively low intensity of 6. 7 on the Richter scale and low duration.

“Yet in terms of financial losses Northridge is one of the worst disasters in US history. 57 people were killed and 72 deaths were attributed to the earthquake. 11,800 people received hospital treatment for injuries and 22,000 people were left homeless. ” (Petak and Elahi Northridge earthquake USA) Direct losses, like damages to residential and commercial buildings, roads and bridges, means of telecommunication, agriculture and lifelines (like water supply and sewerage lines were damaged) etc altogether amounted to $41. 8 billion.

Infrastructural losses like water, gas and power demanded immediate action just as the rescue and recovery of those trapped. Basic necessities of life had to be provided without delay just as immediate medical treatment was essential for the injured. “Life line damage was estimated $ 2 billion but later was found to have exceeded. ” (Petak and Elahi Northridge earthquake USA) Damage to schools was also costly and the cost was approximately $100 million. (Petak and Elahi Northridge earthquake USA) It was a sorry state of affairs that the hospitals were also damaged nearly 31 in number and 9 were forced to evacuate.

(Petak and Elahi Northridge earthquake USA) This caused serious problems since the injured had to be dealt with in the hospitals and the transportation systems were damaged to take them to nearby safer areas for the purpose of treatment. However the airports were relatively less damaged or almost not damaged at all. The earthquake wreaked havoc on numerous massive buildings including centers of trade and commerce and shopping plazas, bridges and roads. The destruction of roads and bridges lead to serious complications and further economic loss.

Lack of transportation caused various business dealings to be delayed, the damage to office buildings also acted as an aggravating factor in this situation and incurring indirect financial loss. “The area’s largest shopping center, the Northridge Fashion Center was virtually destroyed and did not open for more than a year and a half. ” (Petak and Elahi Northridge earthquake USA) Business loss literally affected the country’s economy which was already dealing with the blow the earthquake had given to it. The overall business losses were estimated to be $15.

2 billion. However, the situations were quickly dealt with which meant that supply was meeting the demand. The area took some time before it was fully restored despite the fact that the recovery process and the aid being provided were both quick and effective. Hurricane Katrina In terms of material as well as economic destruction, Hurricane Katrina, occurring on the 23rd of August, 2005, was one of the worst natural disasters to have affected the US in most recent times. Failure of levee system in New Orleans and Louisiana lead to great loss of life and property.

This was greatly criticized since modern day technology demands much more effective measures to be taken by the government in preventing huge catastrophes like hurricane Katrina. Hurricane Katrina has managed to shatter the economy for good. It has caused huge damages to the oil and gas production causing major damage to many oil platforms and leading to the shut down of refineries. “The total shut-in oil production from the Gulf of Mexico in the six-month period following Katrina was approximately 24% of the annual production and the shut-in gas production for the same period was about 18%.

” (Hurricane Katrina Wikipedia)This is a sorry state of affairs since the damage to done to other business market, business dealings and buildings, is apart from this damage to the oil and gas industry. Along with the destruction of various job opportunities the forest industry was also affected. People were not only left homeless but also unemployed and the country’s constant gain through income tax from these previously employed also halted because of the loss of their jobs. Families were left without a means of livelihood and problems of poverty were becoming increasingly significant.

“It is estimated that the total economic impact in Louisiana and Mississippi may exceed $150 billion” (Hurricane Katrina Wikipedia) It is a natural phenomenon that loss of employment opportunities and unavailability of basic needs of the people causes them to move places in search of better opportunities in all fields of life. This has a negative effect not only on the areas which are left, because their chances of future progress become dim, but also of those areas which are over burdened by the influx of people.

These areas come under economic pressure because now they have to provide jobs, residential areas and food for more people on the same available resources. This holds very true especially in the case of victims and survivors of Hurricane Katrina. The economic lows in their region forced them to migrate to other regions or states which also suffered a set back when burdened by an extra population to be supported. Conclusion Analysis of the US attitude towards natural disasters has shown that US governments have been active and keen on preventing as well as providing immediate remedies to the disaster stricken people.

However, the preventive measures like levee system have not been cost effective. They have not proved to be good in preventing huge damages. Amount spent on these preventive measures is wasted once the disaster strikes. On the other hand, effective and efficient help is provided for the recovery of the victims and the destructed area but the economic blow is very strong. In many areas the fast rehabilitation system is not enough though and migration of people to other states causes burden on those states. The economic damage due post-disaster era is caused due to direct and indirect causes.

The direct causes include destruction of buildings especially corporate and residential ones and providence of basic facilities of life to the victims and injured and indirect damage is incurred by mainly destructed transportations, repair, rehabilitation and rechecking of newly built structures for safety. “Disasters can cause government revenues to fall since lower levels of economic activity including possible net declines in imports and exports imply reduced direct and indirect tax revenues. ” (Benson and Clay p.

29) Hence, modern day technology demands our government to take better and more reliable preventive measures to avoid huge damages from disasters which can prove to be long term economic set backs.

Works Cited

Benson, Charlotte and Clay, Edward J. Understanding the Economic and Financial Impacts of Natural Disasters. 2004. World Bank Publications “Hurricane Katrina. ” Wikipedia. 26 April 2008. <http://en. wikipedia. org/wiki/Hurricane_katrina#Economic_effects> Petak, William J and Elahi, Shirin. “The Northridge Earthquake USA and its Economic and Social Impacts. ” 26 April 2008 <http://64. 233.

183. 104/search? q=cache:wKG6aZ183GcJ:www. iiasa. ac. at/Research/RM /july2000/Papers/Northridge_0401. pdf+Economic+impacts+of+Northridge+earthquake hl=en&ct=clnk&cd=1&gl=pk> Stoltman, Joseph P. Lidstone, John and Dechano Lisa M. International Perspectives on Natural Disasters. 2005. Springer Publishers. “Super Outbreak”. NOAA’S National Weather Service Weather Forecast Office. Northern Indiana. 26 April 2008. <http://www. crh. noaa. gov/iwx/program_areas/events/historical/superoutbreak1974/inde .php> “Super Outbreak” Wikipedia. 26 April 2008. <http://en. wikipedia. org/wiki/Super_Outbreak>

Natural disasters are often not natural

Natural disasters are often not natural disasters, but remain in fact human disasters. Discuss this statement in relation to seismic events.

The word 'natural' indicates that humans have not triggered the catastrophe. However, human activity can definitely interfere with nature, which in turn may either cause a natural disaster or make its impacts much worse. Earthquakes can affect people in lots of various methods in countries all over the world. They are an item of extreme seismic activity where plates are interacting, at a devastating of change faults, particularly leading to a develop of stress listed below the Earths surface area. When this stress is released the structures, bridges, pipelines etc which lie in the line of the seismic waves can frequently not withstand the force and strain of the earthquakes and can possibly damage people. Nevertheless is it the individuals's fault that the earthquake took place in the first location? Earthquakes caused by human activity have been recorded in a few locations in the YSA, Japan and Canada.

The cause was injection of fluids into deep wells for garbage disposal and secondary healing of oil, and using reservoirs for water products. The majority of these earthquakes however were minor. The biggest and most well-known resulted from fluid injection at the Rocky Mountain Arsenal near Denver, Colorado. For years researchers have actually been researching caused seismicity, or how human activity can trigger earthquakes. Such a link acquired attention in the early 1960s when numerous quakes were tape-recorded in Colorado after the Army began injecting fluid into a disposal well. There are numerous methods human activity can activate earthquakes. In the 1930s for example, the building of Hoover Dam in Arizona unleashed a burst of seismic activity in the area that reached a magnitude of 5 on the Richter scale. Geothermal- energy jobs have been understood to make the ground shake. This process includes pumping pressurised water a mile into the Earth, then sucking up the heated liquid to make steam and drive turbines to generate electricity. A dam can not trigger an earthquake by itself. The danger factors, specifically unsteady geological fault, need to exist already.

With the right conditions in place, though, a dam can trigger the event earlier than would have happened naturally, and perhaps even increase its magnitude. ‘Human engineering has been triggering earthquakes for more than half a century’ says Leonardo Seeber, professor at Lamont- Doherty Earth Observatory, and manmade quakes may be more common than acknowledged. However Dr. Seeber says that ‘distinguishing natural from triggered earthquakes is generally difficult’ he said ‘Agents triggering the earthquake often refuse to admit responsibility and make it difficult to obtain the data that could prove it’. Even a smell stress increase can cause a fault to fail, Dr Seeber said: humans tend to do it in two ways. One is by changing the load on the crust, typically with artificial lakes, which increase the load, and with quarries and oil fields, which decrease the load. The other ways is increasing the pressure of the interstitial fluid.

This isn’t to say that all earthquakes are caused by humans. They are typically natural occurrences. They’re most often caused by the shifting of plates of rock under the surface od the earth. These plates move along fault lines, which are places where the otherwise solid rock of Earth’s crust has cracked. When the plates slide against each other, or away from each other, the Earth vibrates violently. Less often, earthquakes are caused by natural occurrences like volcanic eruptions. But vibrations felt at the surface of the Earth can also result from Earth-shaking, manmade events like underground bomb testing and mine collapses. In conclusion, my view is for the most part, the accumulating stress that creates the stress build up until it’s great enough to overcome that friction, at which point seismic energy is released violently as the blocks catch up on decade’s worth of motion in just a few seconds is much too large for human activities to make a difference.

We can, however, affect the friction that locks up the fault. Hydraulic fracturing, where fluids are pumped into the ground at extremely high pressures to crack rocks that release natural gas and oil, has been shown to do just that in certain situations. Increasing the fluid pressure inside the fault partially de-stabilises the friction-lock, lowering the stress threshold necessary to trigger an earthquake just enough for one to occur. Despite the obvious negative effects that humans have on prematurely causing an earthquake, the natural factors of the earthquake are fundamentally the reason they occur because without these then the earthquake wouldn’t happen. Human impacts speed up and may make the earthquake worse however they are in fact natural disasters with human elements thrown into the equation. ­­­­­­­­­­­­­­­­­­­­

Cite this page

Economic Impact of Natural Disasters. (2017, Jan 12). Retrieved from

Economic Impact of Natural Disasters
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