Winners and Losers: The Impacts of El Niño 1997-98

This paper assesses the major impacts on human lives and the economy of the U.S. resulting from weather events attributed to El Niño 1997-1998. Southern states and California were plagued by storms, whereas the northern half of the nation experienced much above normal cold season temperatures and below normal precipitation and snowfall. Losses included 189 lives, many due to tornadoes, and the major economic losses were property and crop damages from storms, loss of business by the recreation industry and by snow removal equipment/supplies manufacturers and sales firms, and government relief costs. Benefits included an estimated saving of 850 lives because of the lack of bad winter weather. Areas of major economic benefits (primarily in the nation's northern sections) included major reductions in expenditures (and costs) for natural gas and heating oil, record seasonal sales of retail products and homes, lack of spring flood damages, record construction levels, and savings in highway-based and airline transportation. Further, the nation experienced no losses from major Atlantic hurricanes. The net economic effect was surprisingly positive and less government relief was needed than in prior winters without El Niño influences. The estimated direct losses nationally were about $4 billion and the benefits were approximately $19 billion. The highly accurate long-range predictions issued by the Climate Prediction Center in the summer of 1997 for the winter conditions led to some major benefits. For example, the predictions led California to conduct major mitigation efforts and the results suggest these led to a major reduction in losses. Several utilities in the northern U.S. used the winter forecasts to alter their strategy for purchasing natural gas, leading to major savings to their customers.