There is considerable uncertainty surrounding future changes in tropical cyclone (TC) frequency and intensity, particularly at local scales. This uncertainty complicates risk assessments and implementation of risk mitigation strategies. We present a novel approach to overcome this problem, using the statistical model STORM to generate 10,000 years of synthetic TCs under past (1980–2017) and future climate (SSP585; 2015–2050) conditions from an ensemble of four high-resolution climate models. We then derive high-resolution (10-km) wind speed return period maps up to 1000 years to assess local-scale changes in wind speed probabilities. Our results indicate that the probability of intense TCs, on average, more than doubles in all regions except for the Bay of Bengal and the Gulf of Mexico. Our unique and innovative methodology enables globally consistent comparison of TC risk in both time and space and can be easily adapted to accommodate alternative climate scenarios and time periods.

Economic policy agencies produce forecasts with accompanying narratives, and base policy changes on the resulting anticipated developments in the target variables. Systematic forecast failure, defined as large, persistent deviations of the outturns from the numerical forecasts, can make the associated narrative false, which would in turn question the validity of the entailed policy implementation. We establish when systematic forecast failure entails failure of the accompanying narrative, which we call forediction failure, and when that in turn implies policy invalidity. Most policy regime changes involve location shifts, which can induce forediction failure unless the policy variable is super exogenous in the policy model. We propose a step-indicator saturation test to check in advance for invariance to policy changes. Systematic forecast failure, or a lack of invariance, previously justified by narratives reveals such stories to be economic fiction.

I analyze damage from hurricane strikes on the United States since 1955. Using machine learning methods to select the most important drivers for damage, I show that large errors in a hurricane’s predicted landfall location result in higher damage. This relationship holds across a wide range of model specifications and when controlling for ex-ante uncertainty and potential endogeneity. Using a counterfactual exercise I find that the cumulative reduction in damage from forecast improvements since 1970 is about $82 billion, which exceeds the U.S. government’s spending on the forecasts and private willingness to pay for them.