The NOAA National Centers for Environmental Information (NCEI) has finalized its 2023 Billion-Dollar Disaster Report, revealing a record-breaking year for costly weather and climate disasters across the United States. With 28 separate events, 2023 surpassed the previous record of 22 in 2020, incurring damages totaling at least $92.9 billion. This figure may increase further once the full costs of the December 16-18 East Coast storm and flooding event are accounted for. Understanding the economic impact of these events is crucial, and a common question that arises is: How Much Is In Mexico Money worth in comparison, highlighting the scale of these losses.
Key Highlights from 2023
In 2023, the U.S. endured an unprecedented 28 weather and climate disasters, each causing at least $1 billion in damages. This establishes 2023 as the year with the highest number of billion-dollar disasters ever recorded. These events included:
- A winter storm/cold wave event affecting the northeastern U.S. in early February.
- A devastating wildfire that destroyed the town of Lahaina on Maui Island, Hawaii.
- A drought and heat wave impacting the central and southern U.S.
- Four significant flooding events in California, Florida, and across the eastern and northeastern U.S.
- Two tornado outbreaks across the central and eastern U.S.
- Two tropical cyclones: Hurricane Idalia in Florida and Typhoon Mawar in Guam.
- Seventeen severe weather/hail events across various regions of the country.
Tragically, 2023 also resulted in at least 492 direct and indirect fatalities, marking the 8th highest number of disaster-related fatalities in the contiguous U.S. since 1980.
Financial Toll and Historical Context
The total damages from the 2023 disasters amounted to $92.9 billion. (All cost estimates are adjusted based on the Consumer Price Index, 2023). The most expensive events were the Southern / Midwestern Drought and Heat Wave ($14.5 billion) and the Southern and Eastern Severe Weather in early March ($6.0 billion). Since 1980, the U.S. has experienced 376 weather and climate disasters exceeding $1 billion in damages, with cumulative costs surpassing $2.660 trillion.
Similar to other years in the 2020s, 2023 was marked by frequent, costly, and diverse extreme events affecting communities across the nation. The year marks the fourth consecutive year (2020-2023) with 18 or more separate billion-dollar disaster events impacting the U.S., establishing a consistent and concerning trend. The 1980–2023 annual average is 8.5 events (CPI-adjusted); while the average for the most recent 5 years (2019–2023) is 20.4 events (CPI-adjusted).
Over the past seven years (2017-2023), 137 separate billion-dollar disasters have resulted in at least 5,500 deaths and over $1 trillion in damages. This high cost is partly attributed to the impact of landfalling Category 4 or 5 hurricanes in five of the last seven years. While the U.S. avoided a major hurricane impacting a large metropolitan area in 2023, Category 3 Hurricane Idalia did make landfall in Florida’s less populated Big Bend region.
In a broader context, the total cost of U.S. billion-dollar disasters over the last 5 years (2019-2023) is $603.1 billion, with a 5-year annual cost average of $120.6 billion, more than double the 44-year inflation-adjusted annual average cost. The U.S. billion-dollar disaster damage costs over the last 10-years (2014-2023) were also historically large: at least $1.2 trillion from 173 separate billion-dollar events.
It’s important to note that these estimates only account for events exceeding $1 billion in damages, making them a conservative estimate of the true cost of extreme weather in the United States. However, these events represent the majority of the damage from all recorded U.S. weather and climate events and are becoming a larger percentage of total damage costs from weather-related events at all scales.
The U.S. losses from billion-dollar disasters over the last seven years (2017-2023) have skewed the total distribution of extreme weather costs. From 1980-2000, about 75% of all disaster-related costs were due to billion-dollar disasters. By 2010, the percentage had risen to about 80%, and by 2023, it has risen to >85% of all disaster-related costs, or $2.660 trillion out of $3.050 trillion.
Factors Contributing to Increasing Costs
The increasing number and cost of weather and climate disasters in the United States result from increased exposure (more assets at risk), vulnerability (damage caused by a hazard of a given intensity), and climate change, which increases the frequency of certain extremes that lead to billion-dollar disasters (Fifth U.S. National Climate Assessment (2023).
Population growth and increased material wealth are significant factors driving rising costs, particularly in vulnerable areas such as coasts, the wildland-urban interface, and river floodplains. Insufficient building codes further exacerbate vulnerability. The 2010s decade was far costlier than previous decades due to these factors.
The cost per capita is also rising, indicating that the costs of billion-dollar disasters are increasing more sharply than general population growth. The 5-year average disaster cost per capita increased from about $150 (inflation-adjusted) per U.S. resident in the early 2000s to over $400 per person in the late 2010s and has remained at a high level in recent years.
Climate change is also supercharging the increasing frequency and intensity of certain types of extreme weather, including drought, lengthening wildfire seasons, and more frequent extremely heavy rainfall events. Sea level rise is worsening hurricane storm surge flooding.
Given these trends, human-caused climate change is likely influencing the rising costs of billion-dollar disasters. Addressing these escalating hazard risks requires a focus on where and how we build, and investing in infrastructure updates designed for a 21st-century climate.
Notable U.S. Billion-Dollar Disasters of 2023
Several weather and climate-related disasters in 2023 caused significant damage and heavily impacted communities:
Southern / Midwestern Drought and Heat Wave: 247 deaths, $14.5 billion
Extensive drought conditions affected numerous Southern and Midwestern states, severely impacting the agriculture sector. Ranchers were forced to sell off livestock early due to high feeding costs.
For the second consecutive year, record-low water levels on the Mississippi River disrupted river commerce and allowed saltwater from the Gulf of Mexico to migrate northward, impacting water quality in southern Louisiana.
Central Tornado Outbreak and Eastern Severe Weather in early March 31-April 1: 33 deaths, $5.7 billion
A destructive tornado outbreak on March 31 produced over 150 preliminary tornadoes across many southern and central states, marking the largest outbreak in a 24-hour period for the month of March. The strongest tornado, rated EF-4, occurred in Keota, Iowa, with maximum wind speeds of 170 mph (274 kph). Large hail and damaging winds also caused widespread damage from Texas to Ohio.
Tornado damage to multiple structures at the high school in Wynne, Arkansas, following a tornado on March 31, 2023.
Hawaii Firestorm, August 8: 100 deaths, $5.6 billion
While the 2023 Western wildfire season was below average in the contiguous U.S., Canada and the island of Maui in Hawaii experienced unprecedented wildfire impacts. The deadliest U.S. wildfire in over a century devastated the historic town of Lahaina on Maui. Winds from Hurricane Dora exacerbated the wildfire, rapidly spreading the flames and destroying thousands of homes, vehicles, and businesses.
Historical Costs and Fatalities by Disaster Type
Tropical cyclones have caused the most damage ($1,379.3 billion) and have the highest average event cost ($22.2 billion per event) among U.S. billion-dollar disaster events from 1980 to 2023. Severe storms ($455.2 billion), drought ($352.9 billion), and inland flooding ($196.6 billion) have also caused considerable damage.
Severe storms have caused the highest number of billion-dollar disaster events (186) but have the lowest average event cost ($2.4 billion), reflecting their localized nature. Tropical cyclones and flooding are the second and third most frequent event types (62 and 44, respectively). Tropical cyclones are responsible for the highest number of deaths (6,897), followed by drought/heatwave events (4,522) and severe storms (2,094).
Climatology of Billion-Dollar Disasters
Disasters by Region
The South, Central, and Southeast regions of the United States, including the Caribbean U.S. territories, have experienced the highest cumulative damage costs, reflecting their vulnerability to a variety of weather and climate events.
Texas leads the U.S. in total cumulative costs (~$402 billion) from billion-dollar disasters since 1980, followed by Florida (~$389 billion) and Louisiana (~$304 billion).
The impact of the 2023 Southern and Central Drought, combined with numerous severe storm events, resulted in more than a dozen states experiencing $2-5 billion in damage costs EACH. Severe storm events were the costliest hazard overall, with $54.0 billion in damage.
Billion-Dollar Disasters by Month
The 44-year climatology of U.S. billion-dollar disasters reveals seasonal risks from extreme events. Severe storms are more frequent in the spring months (March-May) in many Central and Southeast states, while the fall season brings heightened hurricane risk along the Gulf and Atlantic coast states, and an increased risk of Western U.S. wildfires.
Each region of the U.S. faces a unique combination of recurring hazards. The combined historical risk of U.S. severe storms and river flooding events places the spring and summer seasons in the high-risk category for simultaneous extreme weather and climate events, while hurricanes, wildfires, and drought dominate the fall season.
Compound Extremes
The increase in disasters creates ‘compound extremes’, which are also an increasing problem for recovery. As noted in the recent Fifth National Climate Assessment (2023), “climate change is also increasing the risk of multiple extremes occurring simultaneously in different locations that are connected by complex human and natural systems.”
Over the last six years (2018-2022), there were just 18 days on average between billion-dollar disasters compared to 82 days in the 1980s. Shorter time intervals between disasters mean less time and resources available to respond, recover, and prepare for future events, producing cascading impacts that are particularly challenging for vulnerable socioeconomic populations.
Explore the billion-dollar disasters database from NOAA National Centers for Environmental Information.
