For many decades, climate scientists have warned of an accelerating rate of climate change, which would bring about more extreme weather patterns heralding an age of consequences. These dire warnings were easy to ignore, especially as climate change went by the comparatively gentle misnomer global warming. The future tense description climate change, where most of the impacts were long range externalities outside of the advanced economies, the worst polluters, is similarly misleading. Today, however, the seemingly endless raft of extreme weather events suggests that the climate is not changing, it has changed and our societal imperative is to end the causality debate and begin responding to effects in the present tense and with great urgency.
With this change, which is upon us from the wild fires in California that resemble a hellscape, to record city-level flooding in Houston (the 4th largest city in the U.S. and a choke point for the oil industry) and the apocalyptic scenes in Hurricane Irma and Maria’s wake, the case for resilience could not be more urgent. Looking at the complete collapse of Puerto Rico’s infrastructure and the inability or unwillingness to send in the cavalry drives home the point that in the face of extreme weather, we can no longer be islands unto ourselves. In all, tallying up the economic costs of the 2017 hurricane season, perhaps the most damaging on record, exceeds $200 billion in a little over 2 months. While the impact of these events goes far beyond economic costs, the financial toll is catching households, businesses and political leaders flat-footed.
Certainly, the financial calculus must change in the risk-bearing industry, where insurers and reinsurers rely on dated actuarial and catastrophe models that do not adequately contemplate the turbulent world we are living in. Highlighting this issue of model error, Texas has had 3 500-year flooding events in the last 3 years consecutively. Perniciously, only 15% of Houston households had flood insurance passing unfunded losses on to tax payers and relief organizations. The vulnerable fall through the tears in our financial fabric and when resources run dry, disaster fatigue sets in and the unfocused media cycle moves on.
