Black Swan Weather Events

Welcome to 2023 extreme weather events use to be rare, but we now have the ability to model and forecast them. Governments know enough to be better prepared. Which begs the question, what type of weather or climate-related event should be considered a “Black Swan”, and can our predictive capabilities keep pace with a changing climate and the potential convergence of multiple high-probability catastrophes in a single year?.

Based on more than 20 years’ worth of historical loss data, Verisk calculates the global average annual economic loss from extreme weather events cost more than $320 billion, as reported in the 2021 edition of the “Global Modeled Catastrophe Losses” report. The ability to anticipate and prepare for extreme weather, not just in terms of a single event or a single peril but also in terms of a series of such events over an entire year, can have widespread benefits to society. And yet, we’re often caught off guard, or at least under-prepared, for many extreme weather events, leading the public to believe they were completely unpredictable black swans.

The term “black swan” was brought into popularity this century, even though the discovery of an actual black swan in the 17th century on the west coast of Australia by Dutch explorers contradicted a long-held belief in Europe that there was no such thing.

In 2007, Nassim Nicholas formally identified the three criteria an event must meet to be considered a black swan. In short, a black swan event are.

1) Extremely rare,

2) Has severe consequences,

3) The weather event is predictable in hindsight (otherwise known as hindcasting). The precise quantification any event, except the now events can be tacked using weather satellites.

Many weather events have been labeled black swans don’t actually qualify from the standpoint of being rare. Events typically earn the label black swan when they result in significant and unanticipated disruption almost independent of their actual intensity or their probability. A good example of a true weather-related black swan.

2023 Winter flooding on highways as California faces a double whammy of a bomb cyclone, snow warning issued across northern plains and upper Midwest. Arctic blast snow, ice and tornadoes this week brings the coldest Christmas in nearly 40 years for millions. Hurricane Katrina in 2005. This hurricane made landfall as a Category 3 storm in Louisiana, with impacts being felt as far away as Mississippi. 

In performing disaster cost assessments the statistics were developed using the most comprehensive public and private sector sources and represent the estimated total costs of these events that is, the costs in terms of dollars that would not have been incurred had the event not taken place. More than one dozen public and private sector data sources help capture the total, direct costs (both insured and uninsured) of the weather and climate events.

These costs include: physical damage to residential, commercial, and municipal buildings; material assets (content) within buildings; time element losses such as business interruption or loss of living quarters; damage to vehicles and boats; public assets including roads, bridges, levees; electrical infrastructure and offshore energy platforms; agricultural assets including crops, livestock, and commercial timber; and wildfire suppression costs, among others.

However, the disaster costs do not take into account losses to: natural capital or environmental degradation; mental or physical healthcare related costs, the value of a statistical life (VSL); or supply chain, contingent business interruption costs. Therefore, any estimates should be considered with respect to what is truly lost, but cannot be completely measured due to a lack of consistently available data.

Sources include the National Weather Service, the Federal Emergency Management Agency, U.S. Department of Agriculture, National Interagency Fire Center, U.S. Army Corps, individual state emergency management agencies, state and regional climate centers and insurance industry estimates, among others. Please see Calculating the Cost of Weather and Climate Disasters for more information.

 More significantly, it’s estimated that approximately 1,500 people lost their lives because of storm events, far in excess of the average loss of life from hurricanes in this region. The differential between storm intensity and storm impact demonstrates that the New Orleans area was not prepared for this type of storm.

More recent black swan weather events include the winter storm “Uri” in February of 2021 that crippled the Texas power grid for weeks, and led to an estimated economic impact of between $195-295 billion (PerrymanGroup 2021). Although the event is considered by many to be a black swan, lessons from prior cold-snap events in Texas history appear to have gone unheeded. The power grid could have been better prepared, so this event, too, is more aptly labeled a “grey swan” (Doss-Gollin et al., 2021).

An even better example of an event worthy of the black swan label for Texas is Hurricane Harvey in 2017. Harvey’s rainfall (as much as 60 inches in some locations) was noted to have a return period of 2,000 years, or a 0.05% chance of happening in any given year, based on the climate of the late 20th century (Emanuel, 2017). The storm’s economic loss was estimated at $125 billion by the National Oceanic and Atmospheric Administration (NOAA).

Climate change is making extreme events more intense and more frequent in particular, heavy precipitation (Kirchmeier-Young and Zhang 2020) and more recently, wildfires (Abatzoglou and Williams 2016). It is expected that events of unprecedented intensity will likely continue to occur (e.g., Hurricane Harvey-like) leading to potentially high losses, so historical hindsight may not be sufficient.

The combined impact from hurricanes and wildfire in the U.S. in both 2020 and 2017 was not necessarily by happenstance. Large-scale atmospheric circulations, the kind that general circulation models (GCMs) examine, can provide a conducive environment for such correlated extreme events to occur.

For both 2017 and 2020, for example, a moderate La Niña was in place; that weather phenomenon provided a large high-pressure ridge over the western U.S., which accelerates drying of vegetation and creating (wild)fire fuel load. It also enhances down-sloping winds across California, which can further promote drying and spread a fire once it has started. A La Niña also reduces wind shear over the Caribbean Main Development Region, which allows strong hurricanes to develop.

So, even though seasonal forecast models at the time did not tell us that there would be record-breaking wildfires and record-breaking hurricane activity in the U.S. in 2017 and 2020, perhaps we could have realized based on past data what the models were projecting for the summer and fall of 2017 and 2020, and we should have anticipated the elevated activity in 2023. Exacerbating this natural weather phenomenon, climate change has been increasing sea surface temperatures, which provide the primary fuel for hurricanes to develop, and it has been steadily increasing the dryness in the Western U.S. (Williams et al., 2020).