FIGURE 5.5 Normalized hurricane damages from 1925-1995 (adjusting for inflation, coastal county population changes, and changes in wealth). (SOURCE: Pielke and Landsea, 1998.)

Impact of Abrupt Climate Change on Economic and Ecological Stocks

One way of understanding the impact of abrupt climate change is through its impact on economic and ecological stocks or “capital stocks.” This approach rests on the idea that most useful economic and ecological activity depends on stocks of capital, where that phrase is defined in the most general sense as accumulations of valuable and durable, tangible and intangible goods and services.3 In the economy, capital stocks include tangible goods such as factories, equipment, and roads as well as intangible items such as patents, intellectual property, and institutions. Similarly, ecosystems depend on stocks of species, forests, water, and carbon as well as complex “webs” of interacting systems. Viewed along with other inputs,

3  

This section draws heavily on Nordhaus (2000). The role of capital stocks is also emphasized in Reilly and Schimmelpfennig (2000).



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