Tooze on How Climate Change Will Alter the Economics of Winter

Less snowfall won’t necessarily mean fewer megastorms.

By , a deputy editor at Foreign Policy.
People help dig out a plow after an intense lake-effect snowstorm hit  the area around Hamburg, New York, on Nov. 18.
People help dig out a plow after an intense lake-effect snowstorm hit the area around Hamburg, New York, on Nov. 18.
People help dig out a plow after an intense lake-effect snowstorm hit the area around Hamburg, New York, on Nov. 18. John Normile/Getty Images

Some 31 percent of land on Earth is covered by snow at some point during the year—equaling about 46 million square kilometers. That includes much of Northern Europe at this moment and is projected to include much of the United States over the Christmas holiday, as a huge storm heads southward across the country. The inconveniences are easy to calculate, the economic impact somewhat less so.

How has climate change affected snowfall—and is that saving money on snow removal? Is skiing really a sport for the wealthy? And is snow an economic resource all its own? Those are a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity.

For the full conversation, look for Ones and Tooze wherever you get your podcasts.

Some 31 percent of land on Earth is covered by snow at some point during the year—equaling about 46 million square kilometers. That includes much of Northern Europe at this moment and is projected to include much of the United States over the Christmas holiday, as a huge storm heads southward across the country. The inconveniences are easy to calculate, the economic impact somewhat less so.

How has climate change affected snowfall—and is that saving money on snow removal? Is skiing really a sport for the wealthy? And is snow an economic resource all its own? Those are a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity.

For the full conversation, look for Ones and Tooze wherever you get your podcasts.

Cameron Abadi: It snows considerably less than it used to in much of the world as a result of climate change. Has that affected the industry dedicated to clearing away snow? And have municipalities dedicated less money to snow removal in their budgets?

Adam Tooze: Yes, in general, it is true that due to global warming, there is less snow. It’s not a terribly dramatic shift yet. The U.S. data show a 0.19 percent per annum reduction in snowfall over time since the 1930s. So a slow creeping reduction in snowfall. And if you project that forward, then you do indeed conclude that large parts of the world that currently require extensive snow plowing may not in the future have to do so. I actually found a study by Bergen, the second-largest city in Norway with 280,000 people, of whom about 160,000 have to travel to work every day. The city spends quite a lot of money on clearing ice and snow, and they would save the equivalent of about $4.5 million a year, they figure, by 2030, 2040, if current warming trends happen. So there are people actually doing the math on this.

But once you get deep into the snow clearing industry, the story gets much more complicated. So, first of all, what delivers storms and massive snowfall are complex weather patterns dictated by the polar vortex. And the polar vortex is, in fact, moving at a more aggressive and dramatic way as a result of climate change than it did before. So, even if the overall level of snowfall is falling, the drama of the snowfall may increase—a little bit like with warming and hurricanes in the Southern Hemisphere or toward the equator. The second point is that the thing that really causes chaos is the freeze-thaw cycle. So the most dangerous phenomenon is not when you’ve just got solidly packed, deep, fully frozen snow but when you have the phenomenon of snowfall thawing and then refreezing overnight so that then you have sheets of ice, essentially, which are quite difficult to clear—they’re harder to break. And that is increasing with warmth because you spend more of the time in the precarious boundary between freezing and thawing and then freezing again. And so the city of Montreal is, in fact, now involved in quite serious debates about how they are going to deal with situations like the one I think they had in 2015, where they had around 500 people fall down and break their legs on a single day because they went through one of these freeze-thaw-freeze cycles.

And that, of course, poses budgetary issues because how do you justify retaining large clearing capacities when the snowfall is becoming less predictable? There is a solution for this in the market, which is snowfall insurance. So, if you’re a snow clearing company, you can insure yourself against a warm winter by taking out snowfall insurance. In a sense, what you would expect municipalities to do as well is to adopt various hedging financial strategies so as to justify maintaining adequate capacity. One of the reasons why Britain, for instance, struggles with snow is it doesn’t regularly encounter it. So it simply doesn’t make sense from the position of a city like London to maintain the kind of snow clearing capacity that New York does. And so climate change is going to make this entire calculus of how you prepare for the rare event of a potentially devastating snow-thaw-ice storm-type phenomenon much more difficult.

CA: Is there a measurable effect of snowstorms on an overall economy? Can the costs be quantified per inch of snow? Or is there additional economic activity in the form of sled purchases for kids and repairs for crashed cars, that kind of thing?

AT: Yeah, this seems like a theme we come back to quite a lot on this podcast—when is something bad, good for the economy? And it’s true for winter storms, as well. Winter storms are shock events to an economy. They interrupt normal transport. They interrupt the ordinary flow of business. So that’s bad for the economy. On the other hand, people take out more insurance, so the insurance business thrives. People stock up, famously, with water and toilet paper ahead of time. So that actually drives a demand surge.

Overall, because storms are an interruption to the normal division of labor, they do cost money. There’s no doubt about this. The overall net effect of storms as such is negative. It is, however, small. So, if we think about natural disasters as a low $100 billion kind of phenomenon in general, then a snowstorm is a low single-digit billion event. I saw a costing for snowfall economic losses in the United States in 2014 across all of the major states that were affected—the total sum came to about $2 billion. This is in relation to a U.S. economy that is $17 trillion strong. The property damage, the interruption to economic activity, is much less severe than it is, say, for a hurricane.

But it isn’t the storm and the snow that kills you. It’s the cold. If you look at excess mortality, it is the cold that kills at a much higher rate than the heat—so far, anyway, before we get to really severe global warming in most of the world. And so, in those terms, there is a very considerable cost in terms of human life to the sort of weather that we’re experiencing right now. More old, elderly, vulnerable people will die of pneumonia in badly heated and badly insulated apartments for every degree that we go closer to freezing.

CA: How about the industry of producing fake snow? Is it getting harder for ski resorts to make ends meet these days with all their new costs?

AT: It’s dramatic in many cases. I mean, if you take the Winter Olympics as an instance, none of the recent Olympic Games could have been conducted without artificial snow generation. And there are entire ski areas in Europe, the Trentino region in Italy, for instance, where around 70 percent of the snow that people are enjoying, 70 to 80 percent, is artificially generated. And it is a huge effort.

It isn’t quite the nightmare that you expect because you don’t do this in 5 degree, 10 degrees Celsius [41-50 degrees Fahrenheit], well above freezing temperature. The snow generators operate at or below the freezing point. What you’re compensating for is not that it’s not cold enough but that there hasn’t been any precipitation. You essentially blow a wet mist into a blower. And given the underlying cold air, as the water evaporates, it cools itself. And so you can create snow for essentially the same electric cost as air conditioning. The amounts of water that you need to produce the artificial snow are absolutely gigantic. And the resulting snow is not of the natural, complex, loose structure. It’s too uniform because it comes through this mechanical process. So it’s very heavy. It sits on the ground in dense packs, ultimately. It doesn’t insulate in the same way, and it applies more pressure to the ground. So it’s a hugely invasive kind of activity.

CA: Is the stereotype of skiing as a sport for the wealthy justified?

AT: Yeah, it absolutely is. It’s up there with golfing and sailing as a relatively elite sport. It’s overwhelmingly white as a result, as well, in the United States context. And indeed, it has also barely expanded in the United States. The number of skiers is not substantially larger now than it was in the 1970s. And this is a result of the basic mechanics. You need a lot of equipment. You need to get to relatively remote places. You need to be ferried around by lifts and so on.

But astonishingly, it’s also the effect of monopoly. So major ski resorts require substantial investment in terms of the hotels and lifts and so on. And so you need capital to do them. And there are major companies that operate the resorts. So, in Europe, the major resort operator is the French Compagnie des Alpes, which was created in the 1980s and operates many of the famous French skiing areas. But the real juggernaut in the global skiing world is Vail, which is a group that emerged from Colorado and has set about systematically hoovering up exclusive rights, literally buying mountains across the ski resorts of the United States. And they now control 50 percent of the U.S. skiing market. And their strategy is basically to simply screw up the price of skiing, to make it a more and more exclusive, more and more profitable business.

And so now you can buy a card, you can buy this ski permit, which allows you to ski across all of the Vail resorts. And so people rush to buy these permits at the beginning of the skiing season. It’s great business for Vail because then they have all of the risk covered because they don’t know how much snow is going to fall. But if you buy the permit—they sell about a million of these permits at the beginning of each season for close to $1,000 per permit—that generates their revenue flow. And then on the back of that, they hire bunches of enthusiastic, ski-crazy young people to staff the resorts whose main compensation comes in the form that they get free access to skiing on these highly exclusive resorts.

CA: I’m curious whether snow has any economic value as a natural resource of its own. Can it be repurposed for any other productive uses beyond recreational skiing?

AT: Absolutely. The snowmelt is totally fundamental to human civilization. You know, if you think about the Ganges Valley civilizations there, they’re feeding off the water that runs off the Himalayas—that one-sixth of the world’s population relies directly on snowmelt water. But since all of the Ganges does, that kind of seems like a low-side estimate.

CA: What is the relevance of that precipitation coming in the form of snow? As opposed to simply being rainfall.

AT: It’s released at certain times of year—that’s the crucial thing. Because obviously there is also the monsoon season. But the snowmelt follows a different rhythm. So it provides you with water at different times of year. It’s one of these natural services that people talk about in environmental economics, which have no market price but without which, essentially, life as we know it is unimaginable.

Cameron Abadi is a deputy editor at Foreign Policy. Twitter: @CameronAbadi

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