Paying the cost of climate resilience
The transition to an environmentally sustainable economy has already begun, but we still need a generation (roughly two decades) before we see a slowdown in global warming. The cost of reducing climate pollution faster would be an economic and political disaster. Slowing or stopping economic growth would destabilize politics, and given the rapid development of weapons and disruptive technologies, this instability would be more damaging than the effects of climate change. The pace of transition to a renewable resource-based economy depends on the development and adoption of new energy and waste treatment technologies. It’s hard to predict how quickly this process will go, but the sunk costs of existing technologies are only jettisoned when new technologies are clearly better, cheaper, and more reliable than the ones they replace. The idea that climate pollution can be eliminated by political decree overestimates political power and underestimates economic power. It is not just strong economic interests that influence public policy, but also the sense of economic well-being perceived and experienced by the wider public. Maintaining this sense of well-being is an important basis for political stability. The transition to an economy based on renewable resources must be careful to enhance rather than diminish this sense of well-being. The fact that this transition will take time does not diminish our sense of urgency about its necessity, but what matters is that we are dealing with the world we live in, not the world we might wish it were.
This summer’s fires, floods and intense heat have made it clear that decarbonization must accelerate. But our work to protect communities from extreme weather events is even more urgent. While there is still talk of a “managed retreat” from low-lying areas prone to flooding, the widespread distribution of extreme weather suggests that you can run away, but not climate impacts. Maybe we should move from the Jersey Shore to the Green Mountains of Vermont: Whoops, this won’t work, Vermont gets two months’ worth of rain in a few days. Maybe we can move to small towns in the Midwest: no, they have tornadoes and flooded rivers too. Maybe we should move west closer to the forests: oh yes, the drought and electric sparks are starting massive fires. Forget what happens in retreat, management or panic situations, we need to build a stronger and more resilient built environment. And the need is urgent. Drainage systems, dams, buildings, transportation and energy systems must be able to withstand the rain, wind, heat and cold of climate-accelerated extreme weather events. The impact of extreme weather is enormous and growing.according to Christopher Flavel of New York Times:
“Census data show that in 2022, weather-related disasters will drive more than 3.3 million U.S. adults from their homes. Of those, at least 1.2 million will be away from home for a month or more; of those, more than half a million will never return , which intensifies the The growing diaspora of domestic climate refugees“.
Flavel We’re not helpless to prevent damage from extreme weather, the report says:
“Technology exists to protect homes from severe weather, experts say, but these innovations have been slow to penetrate mainstream residential construction, leaving most Americans increasingly vulnerable to climate shocks… made of steel and concrete Homes can withstand heat, wildfires, and storms more effectively.. Even traditional log-frame homes can be built in the following ways: Greatly reduce the chance Severe damage caused by hurricanes or floods. But the cost of adding resilience can be about 10 percent higher than in traditional buildings. “
Adapting the built environment to climate change costs money. a lot of money. That means we’ll need to pay for these upgrades with money we’d rather use elsewhere but have to be induced to spend money on these protections. The government must take the lead in upgrading public infrastructure such as roads, bridges, ports, dams, train tracks and airports. Taxes on revenue, sales, transportation and tolls need to increase to pay for these improvements. The anti-government forces that control the U.S. House of Representatives are unlikely to help here, so we need mayors and governors across the country to take the lead.
In New York, both state and city governments are taking action.hillary howard New York Times Reports say the state has budgeted more than $1.1 billion for flood defenses, but doubts will be enough.according to howard report:
“catastrophic rain Parts of the Hudson Valley and other parts of the U.S. have seen catastrophic flooding this week, with officials including New York Gov. Kathy Hochul warning that extreme weather will become “our new normal.” Rohit T. Aggarwala, New York City’s chief climate officer, issued a more dire warning, saying that “weather is changing faster than our infrastructure can handle it.” Thousands of projects are underway across the state to combat the effects of climate change, including rethinking flood-proof housing, updating weather models and racing to manage overflow rainfall. But many projects take decades to complete, and there are concerns about whether that will be enough. ”
But clearly, New York State and New York City are working hard to reduce climate risk. The private sector, in partnership with governments, can also play a key role in reducing the costs of climate risk. Insurance companies can play a central role by requiring homeowners to meet higher flood, fire, and wind protection standards in order to purchase insurance. Car owners who meet these higher standards should receive a discount when purchasing insurance. Insurers have a clear self-interest in reducing the costs of climate risk. They should try to convince homeowners to invest in resilience measures. There is ample precedent for this.When buildings were first electrified in the late 19th centurythe th In the twentieth century, fire insurance companies supported William Henry Merrill’s Underwriters Laboratories, which tested and certified the safety of equipment used in buildings, from refrigerators to boilers. Insurance companies require you to use these approved devices before agreeing to sell you building insurance.
Today, some insurers are ditching high-risk states like Florida and California. These insurers are unwilling to take the risk of insuring homes in climate-threatened regions. Just as the government has to bear the risk of flood insurance, we may eventually see this in home insurance as well. Homeowners with mortgages often need to purchase insurance, and the government and insurers need to work together to mandate more storm-resistant buildings and renovations. Otherwise, insurance costs can become prohibitive.
Governments will likely need to play the role of reinsurers in climate-threatened regions, as private reinsurers may not be willing to shoulder the financial burden of insuring insurers. You won’t find climate change deniers in the insurance and reinsurance industry.as Sean Baldwin and David Kuhn Risk Management magazine observed last summer:
“Climate change is known to be having a serious impact on insurance markets, affecting industry players from primary insurance all the way through to insurance-linked securities (ILS) and retrocession reinsurance. As global temperatures and sea levels rise, the frequency and Increasing severity and rapidly increasing severe catastrophe losses faced by industry players. For example, A study by Moody’s The study found that more than 70% of wildfire losses insured globally between 1980 and 2018 occurred between 2016 and 2018 alone. The dramatic increase in catastrophe risk presents challenges at all levels of the insurance industry. For buyers of primary insurance, the changing nature of catastrophe risk has resulted in higher premium rates for insurers who face not only increased insured losses but also increased loss adjustment charges associated with more frequent underwriting disputes. … These changing risks, increased volatility, and increased reinsurance needs will result in increased costs for reinsurance buyers. “
As insurers and reinsurers see rising risks, they either raise property insurance premiums or simply refuse to do business. Lenders won’t fund businesses in areas they can’t insure, or they’ll charge exorbitant interest rates, making borrowing impractical. All of this could result in damaged business environments in climate-threatened regions.
The alternative to this risk-induced death spiral is to develop a built environment that is more resilient to catastrophic failure. We’ve seen this in earthquake zones, where stricter building codes allow buildings to survive earthquakes with only minor damage. Buildings need to be constructed to withstand forest fires, floods and high winds. Towns need to make sure they can handle the drainage needs of five inches of rainfall in a few hours. We can build more resilient structures if we are willing to pay the price.
We have entered an era of extreme weather, and we need to invest a lot of resources to deal with weather impacts. One danger of focusing too much on climate adaptation is that it may downplay the importance of reducing climate pollution. This would be a mistake, as the planet could still warm, causing more damage. I suspect that the political dynamics caused by these weather disasters will lead to a deeper understanding of the need to decarbonize the economy. Most people are aware that increasing floods, fires, droughts and heat are effects of climate change and are beginning to appreciate that we need to address both causes and effects.
The technologies we rely on make the world more comfortable, exciting, stimulating and dangerous. We need to take these dangers seriously, and that requires hardening our homes and investing in the collective institutions we call governments. We need policies, rules, and resources to ensure that the costs of our technological world do not outweigh the benefits. Protection costs money. In America, we have enough wealth to protect ourselves, but what we lack is the political will to act. Conspiracy theories and social media rants that have nothing to do with the facts continue to hinder our political discourse and make it difficult for us to deal with real dangers. Sadly, it took floods, heat and fires to convince people of the reality that our planet is polluted. Now, this growing awareness needs to spur action.
