Several drivers are contributing to the rise in expensive severe convective storms: 1) population growth in high-risk areas; 2) non-resilient physical assets; and 3) rising building premiums.
Population growth in areas prone to severe storms has increased asset exposure and the physical assets in harm's way are not designed to withstand high winds or hail. Meanwhile, building premiums to rebuild after severe storms are increasing.
In this edition of The Weekly, we share a condensed version of a new article by Abby Ross, CEO of The Resiliency Company, on the four convictions underpinning the opportunities in the Adaptation Economy.
Several drivers are contributing to the rise in expensive severe convective storms: 1) population growth in high-risk areas; 2) non-resilient physical assets; and 3) rising building premiums.
Population growth in areas prone to severe storms has increased asset exposure and the physical assets in harm's way are not designed to withstand high winds or hail. Meanwhile, building premiums to rebuild after severe storms are increasing.
Unexpected disasters are causing damage in unlikely places, forcing decision-makers in the public and private sectors to prepare for the most common disasters in their region as well as the rare, once-in-a-hundred-year ones. But strategies exist to help decision-makers prepare for the unexpected.
Across the U.S., the average annual total costs of earthquakes is $14.7 billion, with the average earthquake costing between $1.5 to $3 billion. Adopting the latest seismic resilience codes can make buildings more earthquake-resistant and financial instruments can help communities rebuild quickly.
There are no silver bullet solutions for the private sector to adopt to dramatically reduce the costs of winter storms. The biggest lever to bring costs down exists in modernizing and winterizing the grid—an endeavor that will require substantial technological, mechanical, and financial investments.
In just a few hours, a severe storm can cause billions worth of damage. Three levers offer opportunities to enhance resiliency and reduce the costs of severe storms: 1) Invest in more resilient roofing; 2) Adopt more resilient construction practices; 3) Invest in new innovations and technologies.
Investors can reduce the costs and dangers of extreme heat by: Fortifying the electrical grid and built environment; Advancing alternative cooling innovations; Developing public-private partnerships in cooling infrastructure; Investing in blended finance tools; Scaling insurance innovations.
Of all the natural disasters that hit the U.S. each year, extreme heat waves are by far the deadliest. Extreme heat also slows workers down and reduces agricultural productivity.
Three key levers present opportunity for private capital to improve the resiliency of infrastructure and assets during hurricanes: reduce exposure by pricing in disaster risk, fortify assets with hurricane-resilient materials, create partnerships between public and private actors.
Hurricanes are the most costly type of climate disaster. The high cost comes from population growth in hurricane-prone areas, incentives that motivate rebuilding in those same areas, and physical assets in harm's way that aren't designed to withstand severe hurricanes.
Part II of our Wildfires Briefing explores four categories of opportunity for the private sector: 1) Implementing modern building materials and codes; 2) Technologies for better fire management; 3) New insurance models; and 4) Private financing for forest management.
Climate change and federal policies are making wildfires more frequent and intense. Migration patterns are increasing the exposure of assets to wildfire threats. And assets that are more vulnerable to wildfires translate into higher costs.
