Economic damage and spillovers from a tropical cyclone

Lenzen, Manfred; Malik, Arunima; Kenway, Steven; Daniels, Peter; Lam, Ka Leung; Geschke, Arne

doi:https://doi.org/10.5194/nhess-19-137-2019

Articles | Volume 19, issue 1

https://doi.org/10.5194/nhess-19-137-2019

© Author(s) 2019. This work is distributed under
the Creative Commons Attribution 4.0 License.

https://doi.org/10.5194/nhess-19-137-2019

© Author(s) 2019. This work is distributed under
the Creative Commons Attribution 4.0 License.

Articles | Volume 19, issue 1

Research article

|

21 Jan 2019

Research article |

| 21 Jan 2019

Economic damage and spillovers from a tropical cyclone

Manfred Lenzen, Arunima Malik, Steven Kenway, Peter Daniels, Ka Leung Lam, and Arne Geschke

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Final revised paper (published on 21 Jan 2019)
Supplement to the final revised paper
Preprint (discussion started on 05 Jan 2018)
Supplement to the preprint

Interactive discussion

Status: closed

AC: Author comment | RC: Referee comment | SC: Short comment | EC: Editor comment

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- Supplement

RC1: 'Review nhess-2017-440', Anonymous Referee #1, 25 Jan 2018
- AC1: 'Responses to RC1: 'Review nhess-2017-440', Anonymous Referee #1, 25 Jan 2018', Arunima Malik, 14 Apr 2018
RC2: 'Comments on nhess-2017-440', Anonymous Referee #2, 08 Feb 2018
- AC2: 'Response to RC2: 'Comments on nhess-2017-440', Anonymous Referee #2', Arunima Malik, 14 Apr 2018

Peer-review completion

AR: Author's response | RR: Referee report | ED: Editor decision

ED: Reconsider after major revisions (further review by editor and referees) (17 Apr 2018) by Bruno Merz

AR by Anna Wenzel on behalf of the Authors (20 Jun 2018) Author's response

ED: Referee Nomination & Report Request started (30 Jun 2018) by Bruno Merz

RR by Anonymous Referee #2 (11 Jul 2018)

Suggestions for revision or reasons for rejection

After reading the authors’ responses, I feel that the authors are not particularly interested in disaster impact analysis. Rather, it seems that they just want to show what they can do with their data and model.
I raised the question about the limitations of input-output analysis on disaster impact analysis and referred Oosterhaven (2017) in my previous review comments. They added this reference in the revised version, but appear not reading it carefully. Their method (or Steenge and Bockarjova, 2007) is the standard Leontief model, which is a demand-driven model. They transformed supply shortages (or changes) to demand changes based on equation (2) on page 6, but it was plugged into the standard Leontief model (or somewhat modified with q), which is still a demand driven model. Demand driven model can derive only backward linkage effects, not forward linkage effects, which is one of the claims of Oosterhaven (2017).
If they read Oosterhaven (2017) carefully, they should find Oosterhaven’s six classifications of disaster impact: (1) supply shortage due to damages on production facilities including infrastructure, which ‘will have forward or downstream effects (page 453)’; 2) supply shock of non-replaceable intermediate inputs; 3) substitution effects on replaceable intermediate inputs; 4) impacts from demand decline due to damages on production facilities including infrastructure; 5) impacts from redistribution of consumption demand; and 6) impacts of reconstruction demand injection. As described in the methodology part of their paper (pages 6-7), it is obvious that this paper’s analysis captures only 4) and a part of 5), none of the supply side impacts of 1), 2), and 3), which cannot be derived with the standard Leontief model as made clear in, again, Oosterhaven (2017).
The authors’ response argues that because Steenge and Bockarjova (2007), by which the paper’s analysis is based on, indicated that a preferred method for disaster impact analysis does not exist, their method in this paper can be useful. Steenge and Bockarjova (2007) paper was published in 2007. Since then, we have come a long way to evaluate and improve disaster impact models to this date, as some of the referenced papers in this paper discuss. The authors review some of the improved models, but they still use the standard Leontief model without carefully warning readers about their severe limitations. I have to insist that not indicating what the model in this paper can derive AND cannot cover could be seen as dishonesty of their attitude toward readers. At least, they need clearly write that this paper’s results capture only a small subset of disaster impacts as above, because of the use of input-output model.

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RR by Anonymous Referee #1 (11 Jul 2018)

ED: Reconsider after major revisions (further review by editor and referees) (12 Jul 2018) by Bruno Merz

AR by Arunima Malik on behalf of the Authors (08 Aug 2018) Author's response Manuscript

ED: Referee Nomination & Report Request started (11 Aug 2018) by Bruno Merz

RR by Anonymous Referee #2 (27 Aug 2018)

ED: Publish subject to minor revisions (review by editor) (27 Aug 2018) by Bruno Merz

AR by Lorena Grabowski on behalf of the Authors (30 Aug 2018) Author's response

ED: Publish as is (31 Aug 2018) by Bruno Merz

Post-review adjustments

AA: Author's adjustment | EA: Editor approval

AA by Arunima Malik on behalf of the Authors (07 Dec 2018) Author's adjustment Manuscript

EA: Adjustments approved (07 Dec 2018) by Bruno Merz

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Short summary

We use the Industrial Ecology Virtual Laboratory to analyse the impacts of Tropical Cyclone Debbie on the Australian economy. We show that industries and regions that were not directly affected by storm and flood damage suffered significant job and income losses, highlighting that producers in modern economies are strongly interconnected - initially localised production shortfalls can ripple through entire upstream supply-chain networks and severely affect regional and national economies.