As floods slam more US firms, $68 billion economic drag expected in 2022
WASHINGTON (REUTERS) – American businesses stand to lose more than three million days of operations from flooding next year and will face worsening economic fallout in the coming decades as climate change fuels ever more extreme weather events, researchers said Monday (Dec 13).
Next year’s expected damage, based on estimated trends, translates to a nearly US$50 billion ($68 billion) annual hit for local economies in cities from Miami to Pittsburgh, according to First Street Foundation, a non-profit group that maps climate risk.
In a new study, researchers there took a rare comprehensive look at the expected flood risk to businesses and local economies in the United States – a threat often underestimated amid a focus on flooded homes and family losses.
“It’s a whole other dimension of flood risk,” said Dr Jeremy Porter, head of research and development at First Street Foundation. “You talk about commercial activity, you’re talking about the economic activity that underpins the entire community.”
In total, local businesses in the US could lose the equivalent of 3.1 million days of operations next year from floods – a number estimated to hit four million by 2052 as flood threats grow, the report said. Researchers found that roughly 730,000 retail, office and multi-unit residential properties – with commercial properties as well as homes – are at risk of projected flood damage today in the contiguous US.
High-risk metropolitan areas included Miami and New York – coastal spots where heightened threats are to be expected – but also inland cities like Pittsburgh, which sits at the confluence of three rivers.
First Street Foundation founder and executive director Matthew Eby said: “Pittsburgh was a big surprise to us. Once we started doing the analysis it made total sense, but it wasn’t what we would have expected.”
According to Dr Porter, Nashville in Tennessee and Cincinnati and Columbus in Ohio are other moderately-sized, inland cities that are nevertheless at significant risk of flooding from nearby river overflows and extreme rainfall,
Mr Steven Rothstein of Ceres, a US-based non-profit working to reshape economic systems to address climate and other risks, said: “You tend to think about the coasts, but it’s very important that we don’t ignore rivers and streams.”
The study calculated the economic fallout from flood risk by projecting expected damage and repair time for buildings, in part by digging into detail such as which floor key equipment was located on.
Getting such information into the public sphere can help individual property owners looking to make changes to cut risks, said Mr Ibbi Almufti, a structural engineer with the engineering firm Arup. “Raising equipment out of the basement, for example, or hardening your exterior with flood walls” are among possible fixes, said Mr Almufti, whose firm partnered with First Street Foundation on the report.
He said he was struck by the scale and growth of the anticipated threat and by rising damage in some particular US locations. For example, Bay City, Texas – about 129km south and west of Houston – was projected to see a 5.8 per cent increase in the number of structures with damage over 30 years.
However, that small boost in numbers translated to a more than 900 per cent increase in estimated economic damages over that period. Even six additional inches of flooding on a more frequent basis can significantly boost average annual losses, Mr Almufti said.
Cities and municipalities are taking note of the rising risks and in some cases relying on businesses to help them update their own modeling and risk projections. For example, Florida’s Broward County has worked with Jupiter, a company that maps climate risk, to develop 100-year municipal flood projections.
Still, major unknowns – like how new infrastructure could cut risks – inject a degree of uncertainty into longer-term projections of risks, said Dr Miyuki Hino of the University of North Carolina at Chapel Hill.
There is “really good reason why we don’t know what the flood hazard is going to be in 2070 or 2080”, warned Dr Hino, an assistant professor who studies flood risk and sea level rise.
Plenty of businesses are already acting on growing climate risks, with their own bottom line and business continuity worries in mind. Some major corporate headquarters and facilities – including Roper Hospital in Charleston, South Carolina – have made plans to relocate to cut their climate-related risks.
But more vulnerable populations can end up getting crowded out by firms looking to cash in on the least flood-threatened land, in a process known as climate gentrification.
For example, sophisticated data modelers and investors have been “buying up all the properties in little Haiti in Miami because it is the highest elevation point and they know that’s going to be the most valuable real estate”, Mr Eby said.
Mr Rothstein said that flood data and risk calculations are continually evolving, but that these cannot be an excuse for inaction on threats.
Already, “Dallas had two 100-year floods within four years – not 200 years,” he noted. “The risk is not, gee, do you have perfect data? I think the biggest risk is doing nothing.”
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