A new report released in April estimates annual earthquake losses in the U.S. of $14.7 billion — a 140 percent increase over the previous estimate of $6.1 billion per year.
By Alice R. Turner, Simpson Strong-Tie Fellow (@SeismoAlice)
Citation: Turner, Alice R., 2023, Earthquake damages likely to cost U.S. billions more per year than expected, Temblor, http://doi.org/10.32858/temblor.312
A new report by the U.S. Geological Survey and FEMA estimates that earthquake damage costs the United States $14.7 billion annually — a 140 percent increase over the previous estimate of $6.1 billion per year from 2017.
Earthquakes haven’t gotten more dangerous since 2017. Instead, the increased earthquake damage estimates result from incorporating the latest data — Both latest USGS earthquake hazard data, as well as significant improvements in data on the number and types of buildings that are exposed to earthquake risk. The new report also benefited from updated census data from the 2020 national census and more reliable estimates of how much construction costs.
USGS science on earthquake hazards and FEMA’s upgraded Hazus6.0 software were critical components of this analysis, says Kishor Jaiswal, a research structural engineer at USGS and lead author of the report. Jaiswal presented results from the new government report at the Seismological Society of America annual meeting in April in Puerto Rico.
Calculating annual loss
The earthquake losses in the report come from a “probabilistic model”; the report does not just consider the effect of a single earthquake in a given location, but many different earthquakes with different magnitudes and distance range that could happen and potentially may result in building damage and losses.
“Probabilistic models include all of the known sources that we can consider in a certain time period for a certain site — all the earthquakes that could affect that site,” says Mark Petersen, a geophysicist at the USGS and chief of the USGS National Seismic Hazard Model project.
With these models, it is possible to calculate the “annualized earthquake loss” for each region — or for the whole country. In some years, earthquakes won’t cause any damage and the financial loss that year would be negligible. But there are also years that may likely witness a large earthquake causing significant damage — reaching tens or hundreds of billions of dollars — major earthquakes on faults like the San Andreas or Hayward faults in the Bay Area or a megathrust earthquake on the Cascadia Subduction Zone in the Pacific Northwest. However, we cannot know in advance which year will be the damaging one. The reported annualized earthquake loss values are long-term averages over what could happen in a year. We can’t predict when, where or how big an earthquake will be, but the annualized earthquake loss values illuminate where damage will be most costly.
Loss estimates across the nation
Not surprisingly, the loss estimates are concentrated in high seismic hazard states. California, Washington and Oregon account for $11.6 billion in estimated annualized earthquake losses, or 78 percent of the U.S. total. The estimated losses have increased by 160 percent in these three highly seismic states. But loss estimates have also increased in most other U.S. states, for example by more than 200 percent in Arizona, Idaho and Mississippi.
Only six states have a decrease in the annualized earthquake losses, including New York, Massachusetts, Connecticut and Rhode Island. These are mostly low seismic hazard areas, and the percentage change is relatively small.
Losses also tend to be concentrated in metropolitan areas, where there are lots of buildings, and people. Fifty-five metropolitan areas, including Greater Los Angeles and the San Francisco Bay Area account for 85 percent of the total estimated annualized losses in the United States.
The study relies on updated information about populations and the values of buildings. For example, Jaiswal says, “home values have almost doubled in the last five to seven years.” The report states that “59 percent of the 140 percent increase [in estimated losses] is largely attributed to the increase in building inventory and valuations.”
For the Hazus software to calculate the loss values, it uses the best earthquake science available. One piece of information included for the first time is how the shallow subsurface, especially the top 30 meters, can amplify earthquake shaking. The increase in hazard is most prominent where thick layers of loose sediments overlie bedrock, especially in basins like the Seattle Basin, the Los Angeles Basin, the San Francisco Basin and the Salt Lake City Basin. Around 22 percent of the increase in annualized losses in California can be attributed to the change in the seismic hazard — this value includes the changes in response to the updated shallow subsurface.
Comparing across the United States
Making comparisons of expected earthquake losses in different states or regions is not simple. For example, “$10 million in earthquake damage in Evansville, Indiana, represents a greater loss than a comparable dollar loss for San Francisco, a much larger city,” according to the report.
To allow for comparisons between different regions of the country, the seismologists who prepared the report use a metric called “the annualized earthquake loss ratio.” Recall from above that the annualized earthquake loss is the expected losses according to the model, averaged per year, and considers both small earthquakes that happen frequently and larger earthquakes that happen less often. The annualized earthquake loss ratio is the annualized earthquake loss divided by the cost to replace the damaged buildings. Using this ratio makes it easier to compare among regions that have different populations and building stock.
All high-earthquake-hazard states noted a reduction in the annualized earthquake loss ratio, even though annualized earthquake loss itself increased. The reduction in the ratio reflects the replacement of aging, vulnerable buildings with more resilient ones in states with many earthquakes. The costs associated with minor amounts of damage that must be fixed and repaired add up quickly, Jaiswal says, so the overall annualized loss continues to increase.
Impact of the estimated loss report
Additionally, the new report not only assesses the financial impact of earthquakes, but also estimates casualties, debris from building collapse, and shelter requirements. The report will be broadly useful, impacting everything from earthquake policy development to the promotion of earthquake risk awareness. “The overall earthquake risk continues to outpace the seismic mitigation efforts in our country,” says Jaiswal.
“I think [the report] will be useful in the awareness component of what we do,” says Jeff Briggs, earthquake program manager for Missouri’s State Emergency Management Agency. “This will be a really good reminder for all of the partners I work with, and the citizens as well, to say, look what a big deal earthquakes are.” Missouri is home to the New Madrid Seismic Zone, which produced devastating earthquakes in 1811-1812.
“This report is not fundamentally changing our messaging and not fundamentally changing our approach. But it changes the scope of it,” says Briggs. Earthquakes are a national problem that is not going away.
Impact of the Hazus software
The impact of the new Hazus6.0 software goes beyond the new loss estimates for the U.S. The Hazus software was originally created in 1997 as a standard tool for modeling the risks associated with natural disasters. The code is used by federal agencies, research institutions and regional planning authorities across the U.S. to support decision-making for mitigation, preparedness, response and recovery.
Mitigation and preparedness efforts can be costly. Hazus can be a particularly powerful tool for governments to evaluate the costs of seismic upgrades. Hazus was used to show that each $1 spent on building to higher standards results in $11 of future losses avoided.
Response and recovery efforts can also use Hazus during real-time disaster response. By including data from the USGS’s Shakemap, which measures the real-time felt shaking from an earthquake, Hazus can be used to estimate the impacts of an earthquake immediately after the event. These evaluations of damage and loss will assist post-earthquake response and recovery efforts by emergency services agencies.
Hazus is key for emergency planning. Often, emergency planners use Hazus to estimate the losses of a particular “scenario” earthquake. Scenario earthquakes are based on historical events. “Because it has specific details that we need in terms of power outages, fatalities and things like that, [scenario earthquakes] really help us prepare,” says Briggs.
However, these scenarios are not updated regularly. In Missouri, the “last time we really had a very specific scenario-based study done was in 2009,” says Briggs. The report has shown that estimated losses across the U.S. have gone up significantly, and the same will be seen for many scenarios used for hazard mitigation. “I have no doubt that the economic costs would go up dramatically from 2009. No doubt.” Briggs says.
Alice Turner is Temblor’s Simpson Strong Tie Fellow. She is a distinguished postdoctoral fellow at the University of Texas Institute for Geophysics, where she uses seismic observations to understand the mechanics of earthquakes, both on the Earth and on other planets. Simpson Strong Tie is sponsoring their second Temblor science writing fellow to cover important earthquake news across the globe.
“Hazus Estimated Annualized Earthquake Losses for the United States,” 2023, FEMA P-366, FEMA, NEHRP, USGS
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