Businesses and governments need to take resiliency seriously and plan for it. If they don’t, they are subject to litigation, and not only revenue can be lost, but also lives.
Plan for climate change or face litigation
In 2014 Farmers Insurance Group filed nine class-action suits against nearly 200 communities in the Chicago area. The insurance company accused Illinois municipalities of failing to prepare for harsher weather conditions, such as heavy rains and flooding. They argued that local governments should account for rising global temperatures and ultimately a higher volume of rain; the rain that would fall more intensely and for longer durations due to climate changes over the past 40 years. Additionally they are responsible to provide safe storm sewer systems and conduct adequate storm water mitigation. According to the lawsuit—filed in the areas affected by flooding in recent years—the flooding is not an act of God and could be manageable. These communities projected the rise of the local river before the heavy rains and made sandbags ready to prevent rainwater breaches. As such, the insurer claimed that the local governments should be obliged to adopt reasonable stormwater management practices.
Moreover, the insurer made the unconventional argument that due to global warming similar problems will be occurring elsewhere and more often and that governments should plan accordingly and adopt more rigorous emergency measures.
The lawsuits further alleged that the “common, central and fundamental issue in this action is whether the defendants have failed to safely operate retention basins, detention basins, tributary enclosed sewers and tributary open sewers/drains for the purpose of safely conveying stormwater.”
If successful, these lawsuits could require municipalities to pay significant damages. Despite the fact that the merits of the case are under scrutiny, the fundamental issue remains: When floods occur, who should pay for the damages?
Farmers spokesman Trent Frager said that the insurance company initiated this litigation to recover money for losses that could have been avoided, if properly addressed by local governments. The company hoped to encourage public agencies in taking preventative steps to reduce the risk of harm in the future. The Insurer's message, to prepare for climate change or get sued, has been widely distributed by various media, e.g., NBC or Reuters.
Fortunately for the Illinois municipalities, the lawsuits were later withdrawn. “We believe our lawsuit brought important issues to the attention of the respective cities and counties, and that our policyholders’ interests will be protected by the local governments going forward,” the Farmer’s statement reads. “Therefore, we have withdrawn the suit and hope to continue the constructive conversations with the cities and counties in Chicagoland to build stronger, safer communities.”
Human-induced climate change
Heavier rains and subsequent flooding are not the only problems that occur more often due to the global warming.
The evidence is clear. Most scientists (97%) agree that climate-warming trends over the past century are very likely due to human activities, predominantly the burning of fossil fuels. Evidence for the Earth’s climate changes can be found from the top of the atmosphere to the depths of the oceans. Researchers from around the world have compiled the data based on core samples, tide gauge readings, weather balloons, satellite measurements, and many other types of systems monitoring our planet’s weather. The evidence tells an unambiguous story: the planet is warming. And this warming has triggered many other changes to our climate.
"Scientific evidence for warming of the climate system is unequivocal." - Intergovernmental Panel on Climate Change
The consequences of global warming are difficult to predict but certain long-term effects seem likely and will be occurring more often in the future.
The weather is getting more extreme. The intensity, frequency, and duration of extreme events will increase within the next decades. The predominant events include:
- Heat waves
- Heavy rainfall
- Floods, including flash floods, urban flooding, river flooding, coastal flooding
- Snowfalls and storms
Global temperature rise
The Earth has warmed since 1880. Most of this warming has occurred since the 1970s. The 20 of the warmest years occurred since 1981 and 10 of the warmest years occurred since 1998. 2015 was the hottest year on record. The global annual average temperature has increased by more than 1.5 degrees F between 1880 and 2012. The number of record high temperature events in the United States has been increasing, while the number of record low temperature events has been decreasing, since 1950.
Global temperatures and carbon dioxide levels are rising, will continue to rise, and it will accelerate significantly if global emissions of heat-trapping gases continue to increase.
Sea level rise
Consequently, Global Mean Sea Level (GMSL) rose by 4 to 8 inches (10 to 20 centimeters) in the last hundred years. However, the rate in the last decade is nearly double that of the last century.
Rapid sea level rise can have devastating effects on coastal habitats, fresh water, and infrastructure. It can cause flooding, contamination, erosion, and lost of habitat for species. It can trigger more powerful storm surges. Low-lying lands could be submerged completely. Hundreds of millions of people live in areas that will be increasingly impacted by flooding. They eventually will have to abandon their homes and relocate.
Scientists predict that the warming of the planet will likely accelerate and oceans will continue to rise. But it’s difficult to predict how high it will go. It can rise between 2.5 and 6.5 feet (0.8 and 2 meters) by 2100 according to recent studies, enough to submerge many of the cities along the U.S. East Coast. Considering a complete meltdown of the Greenland ice sheet, the sea level will likely rise to 23 feet (7 meters), enough to submerge London.
Human-induced warming is superimposed on a naturally varying climate, the temperature rise has been and will continue to fluctuate across regions and seasons or over time. Extreme climate and weather disasters in 2012 alone cost the American economy more than $100 billion.
U.S. billion-dollar weather & climate disasters
The U.S. has sustained 188 weather and climate disasters since 1980. Overall damages and costs reached or exceeded $1 billion. The total cost of these 188 events exceeds $1 trillion. The National Centers for Environmental Information (NCEI) identified seven distinct disaster types of events, such as Drought, Flooding, Freeze, Severe Storm, Tropical Cyclone, Wildfire, Winter Storm.
U.S. Billion-dollar disaster events from 1980-2014 are dominated by tropical cyclone losses. Land falling tropical cyclones have caused the most damage ($545 billion) and have the highest average event cost ($16.0 billion per event). Drought ($213 billion), severe storms ($156 billion) and inland flooding ($89 billion) have also caused considerable damage. Severe storms are responsible for the highest number of billion-dollar disaster events (70) yet the average event cost is among the lowest ($2.2 billion) but still substantial. Tropical cyclones and drought represent the second and third most frequent event types (34 and 22), respectively.
Analyzed costs have been adjusted for the Consumer Price Index (inflation) in order to compare costs over time.
In 2015, there were 10 weather and climate disaster events with losses exceeding $1 billion each across the United States. These events included a drought event, 2 flooding events, 5 severe storm events, a wildfire event, and a winter storm event. Overall, these events resulted in the deaths of 155 people and had significant economic effects on the areas impacted.
Due to increased demand for high-value environmental data and information, NOAA’s former three data centers—the National Climatic Data Center, the National Geophysical Data Center, and the National Oceanographic Data Center, which includes the National Coastal Data Development Center—have merged into the National Centers for Environmental Information (NCEI). NCEI, as the Nation's Scorekeeper, develops national and global datasets of severe weather and climate events with their trends and anomalies. The datasets help to maximize the use of our climatic and natural resources while minimizing the risks caused by climate variability and weather extremes.
Global climate change interacts with other environmental, cultural, and socioeconomic factors. The types and magnitudes of impacts vary across regions, cultures, and over time. It affects human health, infrastructure, water supply, agriculture, indigenous peoples, ecosystems and biodiversity. For example:
- Multiple System Failures During Extreme Events, e.g. Hurricane Katrina
- Expanded Combined Impacts, e.g. coral reef ecosystem collapse due to combination of ocean acidification caused by increased carbon dioxide, rising ocean temperatures, and a variety of other factors related to human activities
- Cascading Effects Across Sectors, including agriculture, water, energy, and transportation
The harm will increase significantly if the global emissions of green house gases are not greatly reduced. Decision-making strategies have substantial influence on these impacts. However, various examples are evident that past successful strategies for managing climate-sensitive resources and infrastructure are already ineffective. These complex decisions are particularly challenging due to the fast pace of the changes, long time lags between human activities and the climate response, the high economic and political stakes, complicated scientific data, and the influence of various stakeholders.
To support effective and informed decision-making while dealing with uncertainties the key elements to consider are improved communication and collaboration across the industries and disciplines, and adaptive risk management as a decision support.
The global risks perception
Global governments and business leaders have already recognized the importance of climate issues. The Global Risks Report 2016—based on the annual Global Risks Perception Survey completed by almost 750 members of the World Economic Forum—calls for a resilience imperative.
The failure of climate change mitigation and adaptation has jumped to the top as the most impactful global risk, ahead of weapons of mass destruction, and water crises. Among the top five most impactful risks are large-scale involuntary migration and severe energy price shock (increase or decrease).
“…climate change–related risks have moved from hypothetical to certain because insufficient action has been undertaken to address them.” reads the report.
Farmers Insurance lawsuit aftermath and the increasing threat of urban flooding
In February 2014 the Illinois General Assembly introduced a new legislation SB 2966, called the Urban Flooding Awareness Act. On August 3, 2014 Governor Pat Quinn signed new laws—effective immediately—to address urban flooding and ensure cleaner drinking water. The new law forms a working group with representatives from state, federal and local agencies and other interested parties who will review and evaluate the latest research, policies and procedures regarding urban flooding. The Urban Flooding Study Report was presented in June 2015. It addresses nine topics in order to prevent and control urban flooding, including costs, impacts, evaluation of policies, technology review, criteria for funding, and strategies.
As defined in the Act, "urban flooding" means the inundation of property in a built environment, particularly in more densely populated areas, caused by rainfall overwhelming the capacity of drainage systems, such as storm sewers. Urban flooding is one of the main hazards in modern towns and cities. It often leads to major economic losses and devastating social and environmental impacts.
Can climate change encourage better emergency preparedness
The unprecedented class actions initiated by the Famers Insurance Company may trigger a surge of widespread climate-change lawsuits in the near future. So, what can we do to mitigate that risk?
Uncertainty is the new reality. The changes are so dramatic that it’s difficult to catch up. What was impossible yesterday is obsolete today. A number of things can go wrong, and nobody can prepare for every possible outcome.
One can argue that the reasons may be debatable. Whatever the reasons, Farmers Insurance’s bold and proactive approach has already changed the future of emergency preparedness and planning for resilient and sustainable communities. Resilient infrastructure should respond to extreme events and have adaptive capacity for long-term changing conditions. Project teams should plan for climate change with a thorough approach customized to local conditions. Public agencies must adopt more rigorous emergency measures. All stakeholders should act on them and review the measures repeatedly.
A strategy requires facts and common sense to appropriately interpret them. What works for one organization will not necessarily work for the other. Details help make better decisions.
Businesses and governments must plan for resilience now. Otherwise, the consequences will be more damaging.
Photo: Iren Petrova