In brief
As America grapples with the aftermath of a widespread winter storm, experts struggle to estimate its economic impact, with AccuWeather citing a potential cost of up to $115 billion while other economists suggest significantly lower figures. The storm has disrupted transportation, caused power outages, and resulted in tragic fatalities, raising concerns about the interconnectedness of weather events and economic activity.
HOUSTON (AP) — The deadly and widespread winter storm paralyzing much of the American East with ice, snow, and cold is also taking a multi-billion-dollar bite out of the U.S. economy, experts estimate.Calculating the disruption costs of winter weather disasters is complex, unlike losses incurred from hurricanes, floods, or fires. According to Jacob Fooks, a research economist at Colorado State University, severe weather events can cut the U.S. gross domestic product (GDP) by an estimated 0.5% to 2% annually, translating to losses between $150 billion and $600 billion based on the current $30 trillion GDP.While it's premature to assign a precise cost to the storm and the week of frigid temperatures it brings, private company AccuWeather has pegged potential losses at between $105 billion and $115 billion, citing disruptions to commerce, power outages, and flight cancellations as significant factors. However, this figure has been met with skepticism from other economists, who argue that it lacks detailed substantiation.Notably, AccuWeather's Chief Meteorologist Jonathan Porter indicates that some businesses might remain closed for days, contributing further to the disruption's financial impact. The storm, which has already resulted in at least 25 fatalities, has knocked out power for hundreds of thousands and grounded 11,400 flights, complicating recovery.Conversely, climate economist Adam Smith contends that while the storm's costs will reach into the billions, they will not approach AccuWeather's estimates. Historical data shows that the costliest winter storm on record, the 2021 Texas ice storm, amounted to approximately $26 billion.One of the complexities in calculating the storm's economic toll is distinguishing between tangible damages and more abstract 'opportunity losses.' Unlike hurricanes or floods, winter storms can yield economic 'winners,' such as local hardware stores, while many sectors suffer major disruptions.As climate change continues to escalate the frequency and severity of extreme weather events, it serves as a significant reminder of how tightly woven our economic systems are with nature's unpredictability.