Higher surface water temperatures in the tropical oceans also provide more energy to drive tropical storm systems, leading to more-destructive hurricanes and typhoons. The combination of rising seas, more powerful storms, and stronger storm surges can be devastating.

As noted in the recent book, Plan B 3.0: Mobilizing to Save Civilization, just how devastating this combination can be became evident in late August 2005, when Hurricane Katrina came onshore on the U.S. Gulf Coast near New Orleans. In some Gulf Coast towns, Katrina’s powerful 28-foot-high storm surge did not leave a single structure standing. New Orleans survived the initial hit but was flooded when the inland levees were breached and water covered everything in large parts of the city except for the rooftops, where thousands of people were stranded. Even in August 2006, a year after the storm had passed, the most damaged areas of the city remained without water, power, sewage disposal, garbage collection, or telecommunications.

Katrina was the most financially destructive hurricane ever to make landfall anywhere. It was one of eight hurricanes that hit the southeastern United States in 2004 and 2005. As a result of the unprecedented damage, insurance premiums have doubled, tripled, and even in some especially vulnerable situations gone up 10-fold.

This enormous jump in insurance costs is lowering coastal real estate values and driving people and businesses out of highly exposed states like Florida.The devastation caused by Katrina was not an isolated incident. In the fall of 1998, Hurricane Mitch—one of the most powerful storms ever to come out of the Atlantic, with winds approaching 200 miles per hour—hit the east coast of Central America.

As atmospheric conditions stalled the normal northward progression of the storm, some 2 meters of rain were dumped on parts of Honduras and Nicaragua within a few days. The deluge collapsed homes, factories, and schools, leaving them in ruins. It destroyed roads and bridges. Seventy percent of the crops and much of the topsoil in Honduras were washed away—topsoil that had accumulated over long stretches of geological time. Huge mudslides destroyed villages, burying some local populations.

The storm left 11,000 dead. Thousands more, buried or washed out to sea, were never found. The basic infrastructure—the roads and bridges in Honduras and Nicaragua—was largely destroyed. President Flores of Honduras summed it up this way: “Overall, what was destroyed over several days took us 50 years to build.” The damage from this storm, exceeding the annual gross domestic product of the two countries, set their economic development back by 20 years.

As the climate changes, more extreme weather events are expected. Andrew Dlugolecki, a consultant on climate change and its effects on financial institutions, notes that damage from atmospherically related events has increased by roughly 10 percent a year. “If such an increase were to continue indefinitely,” he notes, “by 2065 storm damage would exceed the gross world product. The world obviously would face bankruptcy long before then – more of it is explained at the website.” Few double-digit annual growth trends continue for several decades, but Dlugolecki’s basic point is that climate change can be destructive, disruptive, and very costly.

If we allow the climate to spin out of our control, we risk huge financial costs. In a late 2006 report, former World Bank chief economist Nicholas Stern projected that the long-term costs of climate change could exceed 20 percent of gross world product (GWP). By comparison, the near-term costs of cutting greenhouse gas emissions to stabilize climate, which Stern now estimates at close to 2 percent of GWP, would be a bargain.

By Lester R. Brown