In modern society, information is one of the first lines of defense employed to protect citizens' health and well-being and to optimize the effectiveness of economic and social systems responding to dynamic weather conditions. Information from earth-observing satellites, including the current Geostationary Operational Environmental Satellite System (GOES), forms a critical component of today's capabilities. The planned GOES-R set of satellite innovations would further enhance this system when it moves into its operational phase.

Information from the GOES-R system has the potential to meaningfully affect a vast array of human activities in the United States. In this paper, potential socio-economic benefits from the GOES-R system are estimated for improved tropical cyclone forecasts along the Gulf and Atlantic coastlines and for the application of improved information in four specific sectors of the economy – aviation, energy (both electricity and natural gas), irrigated agriculture and recreational boating.

Tropical cyclones clearly have massive economic impact. Existing analyses of tropical cyclone damages tend to be event specific. However, improved hurricane forecasts would not be event specific, but available on a continual basis, both in terms of time and geographic coverage. Therefore, a methodology is developed and employed that assesses the potential value of improved tropical cyclone forecast capabilities and is not limited to the analysis of individual tropical storm or hurricane events. Several scenarios are considered as part of the analysis. For the Base Case scenario, the annual non-discounted net benefits estimated for improved tropical cyclone forecasts exceed $450 million for the year 2015. This benefit would average about $130,000 for each mile of the more than 3,000 coastline miles along the Gulf and Atlantic coastlines. Using a 7% discount rate (and with no inflation), the present value of sum of benefits from 2015 to 2027 would be almost $2.4 billion, averaging more than $690 K per coastline mile. Another scenario postulated is the case in which greater enhanced technologies, such as a hyperspectral sounder, could result in more credible forecasts. In this scenario, the enhanced credibility would be reflected in a smaller area for which protection warnings are issued and a greater response from citizens and decision-makers to take the appropriate action. Using a 7% discount rate (and with no inflation) for this enhanced technology scenario, the present value of sum of benefits from 2015 to 2027 would be almost $4.3 billion.

This study also updates a previous cost-benefit analysis conducted for the Department of Commerce in 2002 and 2004 when HES was part of the proposed instrument platform. Using a 7% discount rate (with no inflation), the present value of the sum of benefits from 2015 to 2027 would be more than $4.5 billion for the four specific sectors. Based on expert judgment provided by scientists consulted during this project, the ABI estimates are estimated to be 49% of the $4.5 billion or $2.2 billion.

These estimated socio-economic benefits most likely understate the potential total benefits of the GOES-R satellite system. Conservative assumptions relative to the effect on potential value are consistently employed throughout the analysis. In addition, the four sectors analyzed, while important in their own right, do not include several other major activities of economic importance to the nation. Nonetheless, the magnitude of the economic benefits estimated for just the five economic activities included in this study provides strong evidence of the potential for societal gain when the GOES-R satellites become operational and provide improved information.