Billion-Dollar Disasters: The Costs, in Lives and Dollars, Have Never Been So High

Fueled by climate change, extreme weather set records this year, causing close to $50 billion and the loss of at least 188 lives by early October.

San Miguel County Firefighters battle a brush fire along Japatul Road during the Valley Fire in Jamul, California on Sept. 6, 2020 Credit: Sandy Huffaker/AFP via Getty Images
San Miguel County Firefighters battle a brush fire along Japatul Road during the Valley Fire in Jamul, California on Sept. 6, 2020 Credit: Sandy Huffaker/AFP via Getty Images

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Update: The final tally, released on Jan. 8, showed that last year blew away previous annual records for extreme weather events in the United States, with 22 billion-dollar disasters that piled up $95 billion in damages and claimed 262 lives, according to the National Centers for Environmental Information.

Extreme weather will surely have its own chapter in the turbulent history of 2020.

The human and economic toll of Covid-19 was already enormous this fall, when it became clear that 2020 was on track to break the previous record for big weather disasters, fueled in part by climate change.

From the derecho that battered the Midwest with hurricane-force winds to unprecedented wildfires that scorched more than 700,000 acres in Colorado and gave California its worst fire season in history, weather and climate events like these represented only a few line items in the latest tally of the nation’s billion-dollar disasters.

Adam Smith, an applied climatologist at the National Centers for Environmental Information’s Center for Weather and Climate, said that final numbers won’t be available until early next year. But preliminary data show that by early October, the United States had experienced 16 billion-dollar extreme weather disasters, tying 2011 and 2017 for the record. With three months to go, key data for some tropical cyclones had not yet been added to the tally.

“Twenty or more [billion-dollar] events during 2020 is certainly possible,” said Smith, adding that it is the sixth year in a row that the U.S. has experienced 10 or more separate billion-dollar disasters. This year “may at least double that recent standard for number of events [to 20] while shattering the previous annual record.”


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Industry and government have tracked billion-dollar disasters for years to assess the trajectory of climate change, a buildup of greenhouse gases that warms the atmosphere and disrupts longstanding global climate patterns. The warming, in turn, has steadily increased the intensity and frequency of extreme weather events, including the massive drought, western wildfires, three hurricanes and 11 severe storms—all costing $1 billion or more—that comprised Smith’s list through Oct. 7.

During that nine-month period, such disasters claimed 188 American lives and racked up damages totaling $49.9 billion.

“The upshot is that this represents a conservative estimate, using the best data that we have available in the public [and] private sectors on what these extreme events are costing the United States,” Smith said in a webinar, which was hosted by the nonpartisan communications organization Climate Central.

He noted that counting billion-dollar events is an imperfect measure, because it does not fully capture the human and environmental costs of extreme weather or, by extension, the real-world impacts of climate change. For instance, the value of the forestland that burned across California, Oregon and Washington state this summer is counted in damage to homes, businesses and commercial timber, along with insurance claims, crop losses and other tangible direct costs.

But many of the devastating psychological and financial impacts of drought and hurricanes—especially those experienced by disadvantaged Americans—go uncounted when survivors lack tangible assets to measure. With more than two-thirds of Americans having only $1,000 in savings or less, their ability to cope with the impacts of disaster is limited. And the destruction of nature alone is not included in the costs.

Meanwhile, scientists and the insurance industry project that the frequency of events like these and the losses they generate will continue to escalate.

Where Climate Disasters Strike Across America

Looking back over the last 40 years, the stepped up pace of change is also hard to miss.

The decade of the 1980s saw 29 billion-dollar events, with associated damage estimated at $178.1 billion. The annual average came to 2.9 events a year, at a cost of roughly $17.8 billion annually. In contrast, in the 10 years from 2010 through 2019, 44 billion-dollar weather events were responsible for total damages of $460.8 billion, or an average of 11.9 events and $81 billion a year.

Just as alarming is the number of lives lost to extreme weather and climate, which over the last four decades has averaged 351 annually. In contrast, in the three years from 2017 through 2019, billion-dollar weather “events” tied to global warming killed 1,190 people, according to the weather and climate center. The death toll was highest in the Midwest and South, where hurricanes and severe storms through Oct. 7 claimed 147 of the 188 lives lost, or 78 percent.

Trends like these are no surprise, scientists say. Higher global temperatures mean longer, hotter and more frequent droughts, dry periods that have been making western landscapes more prone to wildfire in fire seasons that have lengthened as warming increases.

The warmth tied to a buildup of greenhouse gases in the atmosphere also means the skies carry more moisture that concentrates heavier rains that cause rivers to overflow their banks, as they did catastrophically in the Midwest last year. And changes in Earth’s energy balance mean hurricanes that dawdle, dumping more rain in their paths and causing flooding from the coastlines inward.

The increased frequency and severity of extreme weather events like these around the world are tracked closely by the insurance industry. Besides the big losses from hurricanes in the United States, the Swiss Re Institute recently reported insured losses of more than $1 billion each for hail storms in Australia and Canada, which suffered its costliest-ever hail event in Calgary in June.

Overall, global insurance-industry losses this year from natural catastrophes are estimated at  $73 billion, most of the losses making 2020 the fifth-costliest year for the industry in a half century, Swiss Re said. Jerome Jean Haegeli, chief economist for the Swiss Re Group, noted that, while Covid-19 has an expiration date, “climate change does not, and failure to ‘green’ the global economic recovery now will increase cost for society in the future.”

In this aerial image from a drone, damaged grain bins are shown at the Heartland Co-Op grain elevator on Aug. 11, 2020 in Luther, Iowa. Credit: Daniel Acker/Getty Images
In this aerial image from a drone, damaged grain bins are shown at the Heartland Co-Op grain elevator on Aug. 11, 2020 in Luther, Iowa. Credit: Daniel Acker/Getty Images

Greg Lowe, global head of resilience and sustainability at the professional services firm, Aon, noted that roads, bridges, airports and other large infrastructure projects are typically built for the long-term, based on an assumption that environmental risks won’t change much during their lifespan.

But climate change is upending that thinking, he said in a recent post for the company’s online publication, The One Brief.

“Whether we’re talking about new infrastructure or existing infrastructure, these are long-lived assets that were really built to survive a fairly static climate,” he said. “Going forward that’s not going to be the case.”

The Southeast, Plains, Rockies, and West have been prone to extreme weather events, including hurricanes, severe convective storms, flooding and wildfires, according to Aon. And, if those regions continue to grow rapidly, the consequences of climate-influenced events are expected to mount, too, for people and for their assets. 

Another concern about billion-dollar disasters is the count itself, which has significant limitations in estimating the true impact of extreme weather. Smith of NEIC, said the national tally is based on “direct losses.”

That typically includes insured and uninsured assets; the physical damage to residential, commercial and government buildings; the contents of those buildings; business interruption; and the living costs of a hotel stay while a home is being rebuilt. It also includes damaged homes, vehicles, boats, offshore oil platforms and public infrastructure such as roads, bridges, buildings, and agricultural assets, crops, livestock and commercial timber.

Smith noted that climate change is just part of the reason for the growing frequency and severity of billion-dollar disasters. Other factors are growth in the population, putting more people in harm’s way when disaster strikes.

But for those who lack financial power or political clout or are subject to racial inequalities, there’s another vulnerability: The costs of extreme weather mount in ways that aren’t reflected in government data, said Carlos Martin, a senior fellow at the Urban Institute, who focuses on disaster management, climate mitigation and climate adaptation.

“Living in lower-quality housing, living in a community that has under-invested in infrastructure, including utility infrastructure, as well as public works like storm, water, sewage, et cetera—these are compounding vulnerabilities,” he said.

Martin is part of a growing group of researchers who point out that the metric for calculating the cost of climate change is faulty.

Mental and physical healthcare costs, for instance, aren’t part of the National Environmental Information Center’s calculations, he noted. And Federal Emergency Management Agency (FEMA) assistance typically requires claims to be filed within 18 months of a disaster, even though the full human impacts don’t surface for about four years, he said.

To Martin, the inequities are bound to grow along with more frequent and severe extreme weather. That’s because Americans treat the climate change impacts of disasters on a crisis-by-crisis basis, rather than as a policy question.

“Most climate effects are actually going to be chronic and not these acute incidences like major floods and storms and hurricanes, chronic sea level rise, chronic drought and heat, which is the most obvious climate change effect,” he said. “All these things, we don’t really have a federal response to because we only deal with crises.”

It is possible that these trends might change with new national leadership in the White House and the Biden-Harris administration, which has made climate action a centerpiece of its campaign. But, even if new leaders make key changes, including action on climate mitigation, the upward trend of billion-dollar disasters has too much momentum to reverse course quickly.

Climate Disaster Costs Grow

In Colorado last spring, just as fire season began, assistant State Climatologist Becky Bolinger had a gut feeling that a serious drought was coming to the parched landscape of the Four Corners region, where Colorado, New Mexico, Arizona and Utah meet. Streams were projected to run about half full. For ranchers, farmers and communities across the state burning bans and water restrictions were already on the horizon. 

Bolinger had hoped a decent winter snowpack and the usual summer monsoon rains would keep rivers flowing and the range sufficiently moist. But the monsoon never showed up and the fire season, though later than usual, turned out to be the worst since modern records began.

The state experienced four of its largest-ever fires, beginning in late summer, around the time Colorado’s fire season is normally winding down. The experience changed Bolinger’s thinking about climate change and drought.

“Wildfires and drought intensity are changing with climate change—it’s happening now,” she said, noting that drought years are coming one after another, so fast that there’s little time to recover between them and to restore reservoirs, the forests and the range.

In the end, Bolinger said she wasn’t sure if 2020’s historic wildfires will land on the national list of billion-dollar disasters, because of how damage is calculated. Natural capital is not part of the equation, she lamented, noting that 17 percent of Rocky Mountain National Park was burned this summer.

Extremes like the Colorado wildfires wreaked havoc across the country this year. As the average temperature in the contiguous United States rose to 66.0 degrees Fahrenheit, or 1.1 degrees above average, California and Oregon had their hottest-ever Septembers. Arizona and Nevada experienced their second hottest.

Precipitation was equally uncertain. By the week before Christmas, the entire state of Colorado was experiencing drought, according to the National Climate Data Center, and at least one of every five acres in the state was in the highest category of drought during that time. 

After seeing more than 717,000 acres burn—an area larger than the cities of New York, Chicago, Los Angeles, Washington, D.C. and Boston combined—Colorado was enduring its second-driest first nine months, while neighboring Utah withered through its driest year to date through September.

Meanwhile, Mississippi, North Carolina, Tennessee and Virginia all endured their third-wettest first three quarters, as the 2020 Atlantic hurricane season shattered the record for named storms, exceeding the record 28 in 2005 by 2.

Smith’s final tally of billion-dollar disasters for 2020 is due out in early January, but in many ways it is old news already. The data already suggest the trendline we can expect for extreme weather and climate in the new year. In California, where 4.3 million acres burned last year, more than doubling the previous record set in 2018, forecasters are already expecting warmer and drier conditions in the new year based on data from the past.

But Bolinger cautioned that nothing is certain. “We haven’t gotten to the new normal yet, so we don’t know what to expect,” she said.