Extreme weather the achilles’ heel of the U.S. economy?

June 23, 2011 –WASHINGTON — Everything has its price, even the weather. New research indicates that routine weather events such as rain and cooler-than-average days can add up to an annual economic impact of as much as $485 billion in the United States. The study, led by the National Center for Atmospheric Research (NCAR), found that finance, manufacturing, agriculture, and every other sector of the economy is sensitive to changes in the weather. The impacts can be felt in every state. “It’s clear that our economy isn’t weatherproof,” says NCAR economist Jeffrey Lazo, the lead author. “Even routine changes in the weather can add up to substantial impacts on the U.S. economy.” This is the first study to apply quantitative economic analysis to estimate the weather sensitivity of the entire U.S. economy. The research could help policymakers determine whether it is worthwhile to invest in enhanced forecasts and other strategies that could better protect economic activity from weather impacts. The authors caution that the study should be viewed as an initial estimate, which they plan to refine in subsequent research. Lazo and his colleagues did not calculate additional costs associated with extreme weather events, such as this year’s tornado outbreaks, since data on extreme events were not available for the time period covered by their economic model. Nor did they evaluate the possible impacts of climate change, which is expected to lead to more flooding, heat waves, and other costly weather events. Still, the study concludes that the influence of routine weather variations on the economy is as much as 3.4 percent of U.S. gross domestic product. –Science Daily