2023-09-20 05:00:42
Storms, floods or fires cause human losses and destruction of property and infrastructure, in addition to long-term environmental degradation, particularly of water quality. Despite these assessments, in advanced countries, it is difficult to identify a general mobilization of populations in exposed areas on the issue of greenhouse gas emissions which increase the frequency and intensity of these disasters. This sluggishness could be explained by the nature and scale of the economic consequences of disasters.
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A very vast empirical literature has sought to understand the impact of disasters on local and even national economies. The results are mixed, but certain conclusions emerge for cyclones, floods, droughts or fires. The economy of disaster areas in developing countries is often lastingly affected. In advanced countries, not only is the human toll less dramatic, but also growth and employment seem much less affected. Prolonged droughts (excluding fire) would only significantly reduce agricultural activity, with no impact on aggregate growth.
For storms, tornadoes, floods, or fires, most work finds a decline in activity in the days following the disaster; However, employment very quickly recovered and growth returned to its previous pace. This apparent return to normal hides winners and losers. At the individual level, only the worst affected, poorly insured, and the poorest, see their financial situation significantly deteriorate.
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Likewise, the sectoral consequences are heterogeneous. A magazine article Monthly Labor Review has just assessed the impact on employment of the hundreds of major fires in California since the turn of the century. The result is intuitive: the overall stability of employment is driven by a net increase in the (re)construction and business services sectors; On the other hand, although not statistically significant, we note a decline in employment in leisure and tourism. Job creation in construction is all the greater as the fire was destructive; they can thus reach 10%, twelve to eighteen months after the disaster.
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The resilience of the economy can be explained by transfers to disaster areas. The majority of material destruction suffered by individuals and businesses is covered by their insurance. Thus, in France, the declaration of a natural disaster by the government (cyclone, floods, marine submersion, etc.) triggers the guarantee automatically provided for in damage insurance contracts. Furthermore, the more media visibility a disaster has, the more the higher levels of the State, even supranational, come to support (subsidies, tax facilities, etc.) the restoration of infrastructure, the population and employers.
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