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Rebuilding In A Warming World

“Rebuild smarter.” That’s the constant refrain in the wake of Superstorm Sandy.
by Mindy S. LubberForbes Sustainable Capitalism Blog Posted on Jan 08, 2013

Rebuild smarter.” That’s the constant refrain in the wake of Superstorm Sandy, as New York, New Jersey and Connecticut work to repair the devastation to seaside communities, businesses and the infrastructure that ties them together.

Policymakers and thought-leaders at the local, regional and national level are warning that plans to rebuild must take into account the likelihood that more, and stronger, storms like Sandy will hit again – whether on the East Coast, Gulf Coast or West Coast – in the not-too-distant future.

“You don’t have to be a believer in climate change to understand the dangers from extreme weather are already here,” said New York City Mayor Michael Bloomberg at a recent press conference. “Whether or not one storm is related to climate change or is not, we have to manage for risks, and we have to be able to better defend ourselves against extreme weather and natural disasters.”

Insurers, who absorbed an estimated $25 billion in losses from Sandy, are sounding the alarm, too.

“We need to figure out how to close this climate resiliency gap,” Zurich Financial Services’s Lindene Patton said, referring to outdated infrastructure ill equipped for higher sea levels and bigger storm surges. “What we have today is a series of physical assets which are becoming less and less appropriate given the changing weather patterns that we face. You don’t want to assume something’s going to last 30 years only to have it blown away in 10.”

Rebuilding smarter means finding ways to keep people, and vital infrastructure, out of harm’s way. It means strengthening power systems with smarter designs to prevent the multi-day outages that left hundreds of thousands in the cold and dark for days following the storm. It means revitalizing the natural systems, such as creating wetlands, which once helped protect our shores from storm surges and flooding.

But it won’t happen quickly. By some estimates, it may take ten years, and tens of billions of dollars, before hard-hit areas like the Jersey Shore start to resemble their pre-Sandy outlines. Additional resiliency measures for thwarting more powerful storms will cost exponentially more. (One example of this: Consolidated Edison says it would cost $40 billion to put its electric lines underground.) One thing is certain: no one jurisdiction can do it alone. Extreme events like superstorms and super-droughts cross all boundaries, political and geographic. And solutions, both the financial costs and necessary policies, must cross those boundaries as well.

Is such collaboration possible – especially when one considers the political bickering over last week’s Sandy disaster relief bill? After months of delay, Congress came together Friday to approve $9.7 billion of initial disaster relief while also making assurances that another $51 billion of aid will be voted on January 15.

There are models outside of Washington for this kind of collaboration. Along the Pacific coast, leaders of California, Oregon, Washington and British Columbia have been working together since 2008 on the Pacific Coast Collaborative (PCC), promoting cross-border efforts to grow the economy, create jobs, advance clean, renewable energy, and reduce dependence on fossil fuels. Most recently, these jurisdictions announced the creation of the West Coast Infrastructure Exchange, designed to boost efforts to invest in critical infrastructure needs, including upgraded roads, bridges and water systems.

The PCC provides the structure necessary to strengthen long-term collaboration and financing support between governments, businesses and investors. Similar public-private partnerships are needed on the East Coast and elsewhere for post-Sandy rebuilding, and some of them are already in the works.

In December, the New York City Teachers Retirement System pledged $1 billion for new investments in infrastructure projects in New York City and throughout the tri-state area, including improvements to transportation, power, water, communications and housing. In Louisiana, power utility Entergy is restoring wetlands that will help soften the blow from future storms. In Maryland, which has seen a dozen Chesapeake Bay islands disappear due to sea level rise, the state’s governor signed an executive order last month mandating that new bridges, roads and sewer systems be designed with higher sea levels in mind. He’s also asked regulators to raise electricity rates by a dollar or two a month to allow utilities to do more resiliency work.

Factoring climate change into such building and rebuilding efforts is only common sense. The sweeping economic losses from subways, electricity, hospitals and Wall Street being shuttered by Sandy will be felt for years to come. Yet the lesson hits with the force of a flood: Cost-effective resiliency investments can help avoid future economic calamities. We must ensure that policymakers, businesses and investors act on that lesson before the next catastrophe strikes.

Read the post at Forbes Sustainable Capitalism Blog

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Tom Farley says:
Jan 09, 2013 01:34 PM

Perhaps Mayor Bloomberg merely seeks to mollify his political friends and allies, but it does matter whether one believes that the climate is changing. If the climate is not changing, then we just have a "hundred-year flood" or a "perfect storm," and there is no reason to build for more frequent flooding from storms and higher sea levels. If the climate is not changing, then it is foolish to spend billions on measures that will not likely be needed.

Brian Sant says:
Jan 09, 2013 01:42 PM

Thanks for your comment, Tom. We are definitely seeing an increase in frequency and intensity of storms, and scientists say that it can be linked to climate change.

What once was a hundred-year flood is now happening every 5-10 years, and the damage done by these storms is getting more and more costly to insurers, communities and tax-payers. Investing in more storm-resilient cities, infrastructure and buildings can help lessen the financial burden in the future -- but we must also reduce our use of fossil fuels and the amount of carbon we're emitting into the atmosphere in order to avoid more and bigger storms like Sandy in the future.

Bob Medeiros says:
Jan 18, 2013 11:48 AM

I think we need to be careful with terminology. A 100 year flood does not mean it will happen once every 100 years. It means that there is a 1% probability every year that water levels of a certain depth will innundate land some distance from their bank. Obviously that is related to storm activity and you can then argue global warming, but I believe a bigger problem is poor land use management that has encouraged development in flood plains. We have paved over just about everything in sight. Even smaller storms produce devastating floods.

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Meet the Expert

Mindy S. Lubber JD, MBA

Mindy S. Lubber is the president of Ceres and a founding board member of the organization. She also directs Ceres’ Investor Network on Climate Risk (INCR), a group of 100 institutional investors managing nearly $10 trillion in assets focused on the business risks and opportunities of climate change. Mindy regularly speaks about corporate and investor sustainability issues to high-level leaders at the New York Stock Exchange, United Nations, World Economic Forum, Clinton Global Initiative, American Accounting Association, American Bar Association and more than 100 Fortune 500 firms. She has led negotiating teams of investors, NGOs and Fortune 500 company CEOs who have taken far-reaching positions on corporate practices to minimize carbon emissions, water use and other environmental impacts. She has briefed powerful corporate boards, from Nike to American Electric Power, on how climate change affects shareholder value.

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