INFLUENCE OF WEATHER ON THE ECONOMY
The eye of #Maysak typhoon / NASA
INTRODUCTION
We all know how the weather affects people’s mood. When it is sunny and warm, similar feeling stir in people and they start to feel happy and are in a good mood. On the other hand, people are often cranky and in a bad mood when it is gloomy and rainy outside. This is a result of hormones affecting the human body. Melatonin levels, the hormone that causes sleepiness, rise when cloudy skies darken and this sends signals to the brain stimulating the need for sleep. The hormone serotonin has a completely opposite effect. It increases activity, gives stamina and maintains a good mood. Its levels rise according to the amount of sunlight available. People are usually aware of this meteorological influence, but sometimes we forget that the weather can also influence the economy. Extremely bad weather may entice people to behave in an interesting way - to stockpile - which increases consumer demand, the opposite of what would be expected of bad weather. Because of this impulse for stockpiling people gather supplies and means of protection in the event such products become unavailable in the time to come, meaning shops, hardware stores and similar businesses see a rise in business.
SECTORS MOST SUSCEPTIBLE TO WEATHER
AGRICULTURE
TOURISM
6%
The most direct influence of weather on the economy can be observed in agriculture. Agriculture’s contribution to the world’s GDP, according to 2013 estimates, amounts to around 6%, that is, around USD 4,500,000,000,000.
= HRK 31,500,000,000,000
= 254 x Croatia’s state budget (HRK 124 billion)
9,5%
Tourism contributed around 9.5% to the world’s GDP in 2013, that is, around USD 7,000,000,000,000.
0,1% = Croatia’s share in world tourism Croatia’s tourism income = HRK 7 billion
DAMAGE FREQUENCY AND LOSSES COMPARISON ACCORDING TO CAUSE According to 2012 data, natural disasters had the greatest relative share in the total number of damages. The influence of natural disasters becomes even more apparent when observing the share in total losses, as 92% of financial losses are caused by natural disasters. This would suggest they are by far more destructive than those caused by man.
SHARE IN TOTAL NUMBER OF DAMAGES
SHARE IN TOTAL LOSSES
92% 53% natural disasters
natural disasters
47% man
8% man
Due to snow, rain and wind, roads and airports are frequently closed and ferry lines stop operating. It is interesting to note that around 70% of delays in the US National Airspace System are caused by bad weather. According to the same system, weather is the cause of between 10 and 40 thousand hours of delays a month, the equivalent of $249,500 to $998,000 monthly.
70%
THE PRICE OF A HURRICANE According to 2012 data. The overview of individual events that caused the greatest insurance losses shows that the greatest damages were caused by bad weather. Hurricane Katrina, which hit the USA’s south coast in 2005, was the event that caused the most insurance payouts for damages in history.
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mlrd $ The systematic naming of hurricanes began during WW2. Until 1970, hurricanes were only given female names. From that point on, they are given both male and female names. Female named hurricanes caused around three times more deaths than male named ones.
27,6
25,7
$ billion
22,8
80,4
Hurricane Ike
Terror attack on WTC
Hurricane Andrew
37,7
Earthquake/tsunami Japan
Hurricane Katrina
22,9
36,9 17,2
Nortridge earthquake
Hurricane Sandy Hurricane Ivan 16,5
10,0
15,6
Typhoon Mireille
Floods in Thailand
Hurricane Wilma
16,1
8,9 12,5
Hurricane Hugo
Earthquake in New Zelan
Hurricane Rita 11,6
8,7
10,3
8,4
Winter storm Daria
Drought in the Corn Belt/U.S.
Hurricane Charley
Winter storm Lothar
8,9 39,4
Earthquake in Chile Natural disasters positively influence innovation development. A research into the correlation between natural disasters and the number of registered patents done in 2013 showed that in the last 5 years, for every additional USD billion of damages to crops due to drought, the number of registered patents related to increasing crop resistance to drought increased by around 20%.
7,7
Croatia’s GDP (2013)
Major storm in Alabama 1986
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LOSSES DUE TO HIGH TEMPERATURES (FROM 2 TO 6 JULY 2015)
+3°C = - $1.18 billion The theory that climate conditions affect work productivity dates back to Ancient Greece. Workers are most productive in spring and autumn, when temperatures are moderate.
Spain Italy
Malta
Cyprus
Temperatures affect political stability as well. Periods of drought increase the likelihood of unrest and conflict In African countries, a 1ºC rise in temperature increases the chance of a conflict by 4.5%.
HOW WE CALCULATED EU ECONOMY’S LOSSES Temperatures in individual EU states are approximated to average temperatures in their capitals. It is necessary to study which EU states recorded a minimal average temperature of 25°C or above in 24 hour period and recorded a rise in temperature by 6 July. Spain, Italy, Cyprus and Malta meet these conditions. They recorded an average temperature rise of 1.5°C, when calculating the arithmetic mean temperature rise. For each 1°C above 25°C, productivity drops by 2%. A 1.5°C temperature rise caused a 3% productivity drop. Seeing as these four countries create on average a value of $39.25 billion in a five-day period, the 3% productivity drop caused a $1.18 billion loss.
WEATHER EXTREMES There are optimal weather conditions for each economic activity. However, extreme weather conditions adversely affect the majority of usual economic activities.
TEMPERATURES +56,7ºC The record-high temperature on Earth was recorded on 10 June 1913 at Furnace Creek Ranch in Death Valley, California.
SUNNIEST CITY 60
4.015 sunshine hours in a year Yuma, Arizona
50 40
+42,8ºC
30
2.726 sunshine hours in a year Hvar, Croatia
20
DROUGHT
RAIN
PRECIPITATION
The longest recorded period of drought lasted from October 1903 to January 1918, when it had not rained for
The longest period of rainfall was recorded at Kaneohe Ranch on the island of Oahu, State of Hawaii, where it rained for
Most precipitation recorded in one yearwas
173 months
247 consecutive days
in the Chilean town of Arica.
10
(from 27 August 1993 to 30 April 1994).
FASTEST WIND GUST
0 -10
407 km/h
248 km/h
Barrow, Australija
Maslenica, Croatia
26,470 l/m2 in 1861 in Cherrapunji, India.
26m3
-20 -30 -40
Lowest temperature ever recorded was on Vostok station in Antarctica on 21st July 1983
-89,2ºC
-50 -60 -70 -80 -90 -100
-34,6ºC When we observe the data for Croatia, we can see that the highest temperature, 42.8°C, was recorded on 4 August 1981 in the town of Ploče. Holding the record for lowest temperature in Croatia is the town of Gračac, where a temperature of -34.6°C was recorded on 13 January 2003.
Gračac Furnace Creek
Ploče Hvar
Cherrapunji
Yuma
Arica Barrow
Vostok
Oahu, Hawaii
SOLAR ENERGY Like wind, man also uses the Sun as an energy source. This star, closest to us, produces literally unimaginable amounts of energy.
The Sun’s energy output
3.7 followed by 26 zeroes watts in a single second Such an amount of energy is sufficient to melt a block of ice 2 miles wide and 1 mile thick (3.22x1.61 km) stretching from the Earth to the Sun in one second.
The Sun
Earth Only a fraction of that vast amount of energy reaches the Earth.
0.0000000000000004% 0.00000 Although this percentage is immensely small, it represents an amount of energy the production of which would require 44 million large power plants in a single year.
TOP 20 COUNTRIES ACCORDING TO WIND POWER PRODUCTION IN THE WORLD Only India and Japan have over 1000 litres of precipitation annually amongst the largest producers of electricity by wind. Simultaneously, only three countries (of the 20 included in this analysis) have an annual temperature average above 20 degrees.
43 km/h
Temperature
wind speed for maximum electricity production efficiency
Wind industry contribution to the EU’s GDP € 32.43 billion (0.3% share in GDP, 2010), which is an increase by a third since 2007
Electricity production (MW)
Precipitation
India 22.465
Spain 22.987
Germany 39.165
United States 114.763
Wind is most used in cold countries with little precipitation
United Kingdom 12.440
China 114.763
Canada 9.694
France 9.285
Italy 8.663
Brazil 5.939
Sweden 5.425
Portugal 4.914
Denmark 4.845
Poland 3.834
Australia 3.806
Turkey 3.763
Romania 2.954
Netherlands 2.805
Japan 2.789
Mexico 2.551
TOP 20 COUNTRIES ACCORDING TO EARTHQUAKE MAGNITUDE IN THE WORLD There are four countries with a GDP per capita above 30000 dollars and five countries with a GDP per capita below 10000 dollars amongst the top 20 countries in the world according to record earthquake magnitudes. Indonesia has the worst earthquake magnitude to economic development ratio, seeing as they were hit by the third strongest ever-recorded earthquake while being an economically underdeveloped country.
Magnitude of strongest earthquake Chile United States Indonesia Russia Japan Ecuador Colombia Canada India Peru China Mexico Bangladesh Samoa Bolivia Greece Portugal Mongolia New Zealand
22,971
9.3
54,597
9.2
10,641
9.0
24,805
9.0
37,390
8.8
11,244
8.8
44,843
8.6
5,855
8.6
11,817
8.6
COMPARISON OF RICHTER SCALE MAGNITUDE AND ENERGY RELEASED BY MAN-MADE EXPLOSIONS
12,880
8.6 8.5
Earthquakes have affected both rich and poor countries equally
13,430
8.7
17,881
1.0 = 32 kg of TNT 2.0 = 1000 kg of TNT (equivalent to the most powerful conventional bombs used in WW2) 3.0 = MOAB (USA’s most powerful conventional weapon, the so-called “Mother of all Bombs”) 4.0 = smaller nuclear weapon 5.0 = approximate to the atomic bomb dropped on Nagasaki 6.0 = 1,000,000 tons of TNT (one megaton) 7.0 = 50 megaton (equivalent to the Soviet Tsar Bomba)
3,373
8.5
5,180
8.5
6,221
8.5
25,859
8.5
26,975
8.4
11,882
8.3 8.2
Philippines
GDP per capita
9.5
35,152 6,962
CORRELATION BETWEEN WEATHER CONDITIONS AND ECONOMIC STATUS OF WORLD’S COUNTRIES
Countries
Precipitation (total)
GDP per capita (total)
Mean temperature in °C (total)
WARMEST / COLDEST
RAINIEST / DRIEST
RICHEST / POOREST
Richer countries are colder and drier
TOP 20 WARMEST vs. COLDEST COUNTRIES IN THE WORLD Of the 20 warmest countries in the world, according to annual temperature averages, only 3 of them have an average GDP per capita above $10,000. On the other hand, this indicator is below $2,000 for 7 countries. The analysis of the 20 coldest countries in the world, according to annual temperature averages, showed that only Armenia has an average GDP per capita below $10,000.
WARMEST COUNTRIES Precipitation
GDP per capita
COLDEST COUNTRIES
Temperature in °C
Temperature in °C
GDP per capita
25
Djibouti
28.5
Mali
28.2
Burkina Faso
28.2
Gambia
28.0 20
High temperatures are followed by high levels of poverty
-0.6
Russia
0.2
Mongolia
2.6
Finland
3.4
Iceland
3.6
Canada
Sudan
27.9
Maldives
27.7
4.4
Norway
Mauritania
27.5
4.7
Sweden
Chad
27.5
5.5
Estonia
Niger
27.5
5.9
Kazakhstan
Marshall Islands
27.4
5.9
Belarus
Senegal
27.4
6.0
Switzerland
Kiribati
27.4
6.0
Latvia
Tuvalu
27.3
6.2
Slovakia
Micronesia
27.3
6.2
Lithuania
Palau
27.2
6.8
Czech Republic
Saint Lucia
27.2
6.9
Poland
Yemen
26.9
7.0
Austria
Cambodia
26.9
7.2
Armenia
Benin
26.9
7.5
Denmark
Guinea-Bissau
26.9
7.8
Germany
15
10
5
Coldest countries have high quality of life
Precipitation
TOP 20 RAINIEST vs. DRIEST COUNTRIES IN THE WORLD Amongst the countries with highest rainfall, Brunei stands out as the fourth richest country in the world according to GDP per capita. Amongst the poor rainy countries, Liberia is in last place with a GDP per capita below $1,000. Qatar, the wealthiest country in the world, is amongst the 20 driest countries. On the other hand, however, there are also six countries with a GDP per capita below $10,000 amongst countries with least rainfall.
RAINIEST COUNTRIES Precipitation
GDP per capita
DRIEST COUNTRIES
Temperature in °C
Temperature in °C
GDP per capita
25
Palau
27.2
21.7
Egypt
Micronesia
27.3
26.9
Yemen
Tuvalu
27.3
25.5
Bahrain
Solomon Islands
26.1
26.8
Qatar
26.4
Oman
Papua New Guinea 24.6
24.7
Kuwait
Brunei
26.5
26.8
UAE
Liberia
25.1
25.2
Saudi Arabia
Sierra Leone
26.1
15.4
Turkmenistan
Malaysia
26.1
28.5
Djibouti
Nicaragua
25.9
22.6
Cape Verde
Fiji
24.7
20.1
Libya
Marshall Islands
27.4
27.5
Mauritania
Vanuatu
24.2
18.5
Jordan
Equatorial Guinea
24.4
22.4
Iraq
Myanmar
25.6
0.2
Mongolia
Philippines
26.4
5.9
Kazakhstan
Guyana
26.2
14.0
Uzbekistan
Indonesia
26.3
20.1
Namibia
Bangladesh
25.3
27.9
Sudan
Samoa
25.7
20
15
10
5
Poorest countries dominate amongst countries with highest rainfall There are great differences amongst countries thirsting for rain
Precipitation
TOP 20 RICHEST vs. POOREST COUNTRIES IN THE WORLD Six of the 20 wealthiest countries in the world, according to GDP per capita, have an average temperature average 25°C. Five of the wealthiest countries have less than 500 l of precipitation per m2 annually. All of the 20 poorest countries in the world have an average temperature above 19°C. There are great differences amongst the poorest countries concerning precipitation. Eritrea has less than 500 litres of rain per m2, while Liberia’s average is above 2,500 l.
RICHEST COUNTRIES Precipitation
GDP per capita
POOREST COUNTRIES
Temperature in °C
Temperature in °C
GDP per capita
25
Qatar
26.8
24.9 Cent. African Rep.
Luxembourg
8.0
23.5 Congo, Dem. Rep.
Singapore
26.5
21.4
Malawi
Brunei
26.5
25.1
Liberia
20.0
Burundi
20
Kuwait
24.7
Norway
4.4
27.5
Niger
UAE
26.8
23.6
Mozambique
San Marino
12.8
23.3
Eritrea
Switzerland
6.0
25.5
Guinea
United States
11.6
26.9
Guinea-Bissau
Saudi Arabia
25.2
21.8
Madagascar
Bahrain
25.5
26.4
Togo
Ireland
9.6
23.7
Comoros
Netherlands
9.3
19.3
Ethiopia
Australia
17.3
28.0
Gambia, The
Austria
7.0
28.2
Burkina Faso
Sweden
4.7
19.0
Rwanda
Germany
7.8
27.4
Kiribati
Taiwan
21.6
28.2
Mali
Canada
3.6
24.8
Haiti
15
Poorest countries are characterised by great heat 10
The richest countries are either extremely hot or extremely cold 5
Precipitation
Time elf Branimir Kovačić The elf in charge is 185 cm tall and likes long, sunny days the most. When taking a break from making analyses, he likes to eat ice cream, blue and pink one the most.
Time elf Ivan Domšić As he was born during winter, he prefers cold, snowy days. He is 190 cm tall, weighing 105 kg and loves chocolate ice cream. With chocolate sauce, of course. :)