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Catastrophic Floods More Frequent in 2019

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Last week, after already experiencing heavy rainfalls and flooding, New Orleans was preparing for tropical storm Barry, expecting the storm to overflow or even breach the city’s levees. Flights in and out of the city were cancelled, as were concerts and other public events, as the city braced for catastrophe. Barry ended up narrowly missing New Orleans, and instead moved inland, drenching other parts of Louisiana and Mississippi and causing floods and mass power outages in those areas. It was yet another example of how major flooding has become a normal occurrence for many regions of the country, and by all indications, it is becoming worse each year.

The National Oceanic and Atmospheric Administration (NOAA) stated in its report 2017 State of U.S. High Tide Flooding and 2018 Outlook that “The projected increase in high tide flooding in 2018 may be as much as 60 percent higher across U.S. coastlines as compared to typical flooding about 20 years ago and 100% higher than 30 years ago.” This prediction turned out to be accurate, as the United States saw massive flooding throughout 2018, including “sunny-day” or “high-tide” flooding that occurs during high tides outside of hurricane events.

In its recent report on 2018 high-tide flooding and 2019 outlook, the NOAA said that these floods’ median frequency in 2018 “reached 5 days, which tied the historical record of 2015.” Of the 98 observed locations along the U.S. coastline, 12 reportedly broke or tied their all-time records for high-tide flooding in 2018. And now, the NOAA is predicting that 2019 could be even worse.

The NOAA noted that high-tide flooding “is increasingly common due to years of relative sea level increases. It no longer takes a strong storm or a hurricane to cause flooding in many coastal areas.” The Union of Concerned Scientists has said that sea level rise is accelerating, that “sea levels in the U.S. are rising fastest along the East Coast and Gulf of Mexico,” and that the primary reason for this sea level rise is climate change melting land ice and heating oceans.

According to the NOAA’s 2019 projections, it expects high-tide flooding along the U.S. coastlines this year to reach double the numbers from 2000. Additionally, “the Northeast Atlantic could see a 140% increase, the Southeast could see a 190% increase, and the Western Gulf of Mexico could see a 130% increase.”

Almost 40% of the U.S. population lives in coastal areas, and could be at risk from flooding effects. With the start of hurricane season, these dangers will only increase as storms batter the coasts. Even before Barry threatened, New Orleans faced massive flooding last week, while Pittsburgh contended with flash floods. And the week before, heavy rains left Washington, D.C. and surrounding towns swimming in water that overwhelmed the city’s storm water pipes.

These increasing floods mean serious losses for people, municipalities and businesses. The recent DC-area floods reportedly caused $3.5 million in damage to Arlington, Virginia county infrastructure alone. In March, a “bomb cyclone” hit Nebraska, with heavy rainfall causing damages totaling more than $1.3 billion. This figure includes $449 million in road, levee and other infrastructure damage, as well as serious damage to more than 2,000 homes and 340 businesses. Iowa also experienced flooding that caused water treatment plants to shut down, depriving two cities’ residents of fresh water. And across the Midwest, agriculture was also hit hard by flooding, slowing corn and soybean planting. The delay may decrease harvests by at least 8% and increase prices worldwide.

As Risk Management Monitor has previously reported, Texas A&M University at Galveston and the Texas General Land Office examined the 50-year impact of a major storm hitting Galveston Bay on the Texas coast near Houston, finding that major storm events that caused flooding would have huge secondary effects on the economy, both locally and nationally.

Various states, including those along the Mississippi River, have already enacted flood control measures like levees, dams and flood walls, but have seen this year’s increased flooding defeat these measures. Others have encouraged residents to purchase flood insurance to offset losses. But the increasing scope of future floods may mean that these steps are not enough. Though tropical storm Barry missed New Orleans, experts have still expressed concern about coming storms possibly “topping” the city’s levees, which could cause even more damage to the already-flooded city.

Massive Wildfires Ravage Alberta, Canada

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oil sands, Canada
Wildfires have shut down tar sand operations north of Fort McMurray, Alberta, Canada

Drought conditions in 2015 left Alberta, Canada, parched. Combined with recent winds and high temperatures, this has led to a massive, intense wildfire in the oil city of Fort McMurray, forcing evacuation of more than 80,000 people, and burning about 1,500 homes. Authorities said there have been no known casualties from the blaze, but that fatalities were reported in at least one vehicle crash along the evacuation route.

On Tuesday, the municipality of Wood Buffalo announced mandatory evacuations and closed all southbound routes. Residents fled to safer ground north of the of the area, where they spent Wednesday night in arenas, hockey rinks and oil work camps that often ran short of supplies, Reuters reports.

The fire is now five times its initial size and spreading south, taking it farther away from the massive tar sands area. Shell Nexen, Suncor and other oil sands operators have curtailed or shut down operations to protect pipelines and help evacuate employees and nearby residents, according to the Washington Post.

The wildfires in Canada illustrate a continuing trend of increasingly severe wildfires that in the United States caused a record 10.

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1 million acres to be burned in 2015, surpassing the previous high of 9.

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8 million acres in 2006, Mark Crawford reported in last month’s issue of Risk Management. It was the fourth year in the past decade in which more than nine million acres burned. According to the U.S. Forest Service, the 2015 wildfire season was the costliest on record, with more than billion spent fighting fires.

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Environmental scientists at the Harvard School of Engineering and Applied Sciences said in 2013 that rising temperatures could lengthen wildfire seasons, increasing burn areas and smoke from fires.

Meanwhile, current weather reports for Alberta have raised hopes, as the forecast calls for cooler temperatures and possible rain.

Alberta hotspots

Risk Managers’ Role in Addressing Climate Change

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IMG_4146

QUEBEC CITY, CANADA—Salutations de la ville de Québec! At the first day of this year’s RIMS Canada Conference, climate change quickly emerged as one of the key challenges facing risk managers—and an area with tremendous potential for risk professionals to effect change.

Government clearly has a role to play, but the slower pace and greater number of obstacles they face lessen some of the possible impact. According to Tim East, director of risk management at the Walt Disney Company, that is where businesses come in. Every one of the Dow 30 companies has created environmental and sustainability initiatives, but only 12% of companies have a C-suite or other top-level executive charged with leading action on this front. The clear trend of embracing corporate responsibility stems from a moral obligation businesses all have, and corporations must take initiative in changing how people think, East said.

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Addressing sustainability and other climate change concerns cannot be done in a silo, and efforts must focus on building resilience in all of the assets a business has: facilities, systems and people.

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Risk managers should be taking a leadership role, using their perspective of corporate objectives and performance to help identify and execute the most impactful change.

Risk professionals can particularly help drive this objective to boost awareness within the organization and in the broader community, while also ensuring the business itself is performing in line with sustainability goals. “Risk managers can help become part of the solution by helping to close the gap between the desires and intentions of our organizations and the performance and impact they have,” East said. “This is part of our moral obligation to reduce our impact on the environment.”

Why should companies act? “Not just because it’s good business—although it is, and not just because it’s profitable—although I think it is, but because it’s the right thing to do in the world and for the communities they serve,” East said.

To maximize the impact of these initiatives, East urges risk managers to set and pursue to reduction targets, otherwise they stand little chance of truly achieving change.

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Then, he advises they commit to a process of assessing, identifying opportunities, and measuring impact annually.

On the organizational level, changing mindsets extends beyond having employees recycle or monitoring water use. Business continuity planning is a critical task at Disney, East said, and they were always good at crisis management, addressing urgent problems over the course of a couple of days. Now, however, they are devoting more focus to planning for longer events.

To that end, the company is working to delink events from their consequences—rather than focusing on discrete emergency situations, it is focusing on how the business will be impacted by the conditions that could stem from any of these specific scenarios, he explained.

Getting started and shifting to a long-term focus seem daunting, and the slow rate of observable change often means adaptation and mitigation are not top of mind for businesses, said Lou Gritzo, vice president of research at FM Global. But risk professionals cannot wait for the next disaster or policy change to prompt a more serious evaluation of exposure and strategy.

Getting started on—or further investing in—mitigation efforts may be best focused on one of the main changes we are already seeing: flooding. Existing data shows a clear increase in flooding, and due to sea level risk and increased rainfall and intensity of rainfall, there will only be more, Gritzo said. To manage this growing risk, he recommends risk managers take four key steps:

  1. Know your flood exposure
  2. Be above the water level, and ensure any new construction is as far above it as possible
  3. Have and exercise a plan for flood emergencies
  4. Keep water out – in the wake of Hurricane Sandy, a number of physical protection measures have been certified and made commercial available to guard against up to a meter of water

New Climate Change Report Highlights Risk Management Strategies

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Global Warming

This week, a new report from the United Nations’ Intergovernmental Panel on Climate Change summarized the ways climate change is already impacting individuals and ecosystems worldwide and strongly cautioned that conditions are getting worse. Focusing on impacts, adaptation and vulnerability, the panel’s latest work offers insight on economic loss and prospective supply chain interruptions that should be of particular note for risk managers—and repeatedly highlights principles of the discipline as critical approaches going forward.

Key risks the report identified with high confidence, span sectors and regions include:

i. Risk of death, injury, ill-health, or disrupted livelihoods in low-lying coastal zones and small island developing states and other small islands, due to storm surges, coastal flooding, and sea-level rise.

ii. Risk of severe ill-health and disrupted livelihoods for large urban populations due to inland flooding in some regions.

iii. Systemic risks due to extreme weather events leading to breakdown of infrastructure networks and critical services such as electricity, water supply, and health and emergency services.

iv. Risk of mortality and morbidity during periods of extreme heat, particularly for vulnerable urban populations and those working outdoors in urban or rural areas.

v. Risk of food insecurity and the breakdown of food systems linked to warming, drought, flooding, and precipitation variability and extremes, particularly for poorer populations in urban and rural settings.

vi. Risk of loss of rural livelihoods and income due to insufficient access to drinking and irrigation water and reduced agricultural productivity, particularly for farmers and pastoralists with minimal capital in semi-arid regions.

vii. Risk of loss of marine and coastal ecosystems, biodiversity, and the ecosystem goods, functions, and services they provide for coastal livelihoods, especially for fishing communities in the tropics and the Arctic.

viii. Risk of loss of terrestrial and inland water ecosystems, biodiversity, and the ecosystem goods, functions, and services they provide for livelihoods.

The report highlights more sector-specific risks, and one table even highlight the panel’s perception of the role of risk management in the future of climate change policy and planning:

IPCC Chart

On the whole, the report lays out many familiar risk management approaches and how they can be best applied to evaluating the risks of climate change and how to mitigate them. Perhaps the environment is warming to risk-informed decision-making as well.