Is TCFD Guidance Exacerbating Social Inequity?

My summer reading has entailed reviewing closely the numerous excellent resilience-finance thought leadership reports written by friends and colleagues, much of it galvanized by the Recommendations of the Task Force on Climate-related Financial Disclosures (TFCD) released in June 2017. I highly recommend these reports as there is lots to learn. Here are some of them:

  1. Acclimitise for United Nations Environment Program Finance Initiative: Navigating a New Climate: Assessing credit risk and opportunity in a changing climate: Outputs of a working group of 16 banks piloting the TCFD Recommendations PART 2: Physical risks and opportunities July 2018.
  2. Four Twenty Seven Inc. and Acclimitise for EBRD: Advancing TCFD guidance on physical climate risks and opportunitiesMay 2018.
  3. Four Twenty Seven Inc. for Deutche Bank: Measuring Physical Climate Risk in Equity Portfolios, November 2017

But, one critical issue key to resilience finance exists that no one is talking about – and it worries me. It’s a discussion of how the finance industry manages assets to ensure the most vulnerable do not become even more helpless due to the physical risks of climate change.

Currently, TCFD spells out these four key features of their recommendations:

  1. Adoptable by all organizations.
  2. Included in financial filings.
  3. Designed to solicit decision-useful, forward looking information on financial impacts.
  4. Strong focus on risks and opportunities related to transition to lower-carbon economy.

I would add one more: It would prove transformative if future TCFD work – and that of the big brains interpreting the guidelines – include “Prioritize lifting more out of poverty into the middle-class market.”

As the groundbreaking “Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters” by World Bank lead economist Stephane Hallegatte reminds us, “By focusing on aggregate losses—the traditional approach to disaster risk—we restrict our consideration to how disasters affect those wealthy enough to have assets to lose in the first place, and largely ignore the plight of poor people.”

For the optimists among us, it doesn’t seem a heavy lift for TCFD to make social equity a feature of its future recommendations: Arguably, much of the goods and services represented by the dollars moving through the financial markets aim, in fact, to increase people’s well-being in infinite ways; In explaining the financial implications of climate change, TCFD does note there are social and environmental consequences; and it is plausible that Mark Carney, chair of the Financial Stability Board that established TCFD and author of the phrase Tragedy of the Horizon, might have had in mind the tragic consequences that climate change already is creating for the world’s least resourced people.

TCFD’s number one principle for effective disclosures is, “Disclosures should represent relevant information.” It’s likely most financiers don’t assume that the jobs left behind as companies move their capital assets and supply chains out of harm’s way are “relevant.” Yet, if that is not relevant to them, then who is it relevant to? Indeed, each of the four TCFD-recommended climate-related financial disclosures elements – governance, strategy, risk management, and metrics and targets – entails features of building or, sadly, dismantling social equity.

Like all whose life’s work relates to solving for climate change risks, I am thrilled not only by the TCFD’s pragmatic approach, but also by the demand it has inspired in the financial markets, segments of which are getting a better handle on their climate risks. There are many actions the market can take. Let me suggest one: In those places where your portfolio is most at risk, ask your risk analysts what will happen to community assets when your portfolio or elements of your value chain move away from the physical risks.

Quantify disbenefits to reputation, workforce, customers and duty to care. Then, consider what an investment in vulnerable communities’ resilience might mean in terms of reputation, workforce and consumer benefits. Do you have the mettle to go beyond the norm and make those investments that build resilience for all rather than avoid risk for some?

Here are three key recommendations to avoid perpetuating a world where particularly vulnerable communities are disinvested in as the market moves from climate change risks:

  1. TCFD should add social equity considerations to its list of “Key Issues Considered and Areas for Future Work.”
  2. Economic powerhouses such as Vivid Economics, which weighed in on economic impacts of physical climate change risks in the UNEP-FI report above but did not mention social equity, should crunch some numbers about the market impacts of disproportionate climate risks and compare these human scenario-based outcomes with climate change scenarios.
  3. All thought leaders in this space should continue to find bridges between questions of social and financial equity. Here’s a start from an article I wrote earlier this year: 6 Steps for Building a “Sweet Spot” Where Social and Financial Equity Meet.

So, how do you recommend we challenge ourselves to make social equity a part of the conversation – and the solution to physical climate change risks?

This post originally appeared on Triple Pundit:

6 Steps for Building a “Sweet Spot” Where Social and Financial Equity Meet

Equity means quite different things to two stakeholders I work with the most:

  • Investors who deal in debt and equity and seek to benefit from the risk and opportunity that climate change creates.
  • Urban planners and nonprofits dealing in social equity and cohesion and eager to prevent harm based on risk and opportunity created by climate change.

Will these two paths converge in the wood, as Robert Frost put it? Or, is it never the twain shall meet as Kipling expressed it?

According to the United Nations-supported Principles for Responsible Investment, $70 trillion (U.S.) of assets under management integrate environmental, social and governance (ESG) factors into core operations. But, peeling back that good news, would we see more social equity ensuing?  By and large, the positive and negative implications on communities of climate change aren’t being addressed.

I frequently note that climate change exacerbates the tale of two very different futures – rich getting richer from extraordinary resources for resilience and poor getting poorer due to precarious resilience in everyday circumstances.  What would it take for those two futures to cause investors to integrate social equity into their climate strategies, creating what I call Finance “Adaptation Equity?”

First, though, they would have to grasp – and care about – social equity issues. Those investors already trying to achieve sustainability goals are likely to see social equity as material to financial equity because it:

  1. Accomplishes two ESG pillars – Environment and Social – that link the mitigation of physical risks of climate change with the enhancement of communities. Think of aligning with international standards related to human rights or the 17 U.N. Sustainable Development Goals.
  2. Unveils new investment opportunities in physical assets that can enhance community equity such as infrastructure and real estate.
  3. Responds to an admittedly small group of impact investors who focus on beneficiaries and aim for responsible investment to be defined by social equity.
  4. Portends new pathways for longer-term investors (e.g., pensions) and development funders (e.g., blended finance teams) to apply their assets to climate and inequity affected sectors and regions.
  5. Enhances understanding of systemic risks within the financial ecosystem by connecting climate change and inequity, especially given that without concerted effort, climate change will make inequity worse – and inequity has been proven to impact markets.

Still, for finance equity to flow to social equity requires work. Here are three strategies for each.

Investment equity

  1. Include social equity principles in investment policy statements and goals as well as in requirements for consultants and advisors. Ask, “Will this asset improve the lives and livelihoods of lower resourced communities?”
  2. Make social equity a part of risk mitigation assessments for climate-exposed assets, broadening the scope of the Task Force on Climate-Related Financial Disclosure guidelines to ensure that social elements are privileged.
  3. Insist social equity be part of green bond project frameworks, asking if the infrastructure asset will have an equal or greater number of lower-resourced beneficiaries.

Social equity

  1. Include means to raise fees and taxes related within social equity projects to make them more attractive to financiers. Ask, “How can we make this project a revenue generator?”
  2. Make calculations that show the market benefits of social equity in your geographies and communicate them to public and private stakeholders.
  3. Insist that social equity be part of financial assessments for infrastructure and other projects by being present at negotiations and integrated design discussions.

As efforts create successes, failures and draws, both groups should communicate action on social and investment equity with their clients and beneficiaries to help build this field of practice.

This post originally appeared on Triple Pundit

A Tale of Two Countries Illuminates the Necessity of Preparation

This post originally appeared in Triple Pundit:

In one month, three historic hurricane touched ground in the U.S. Now tragic wildfires surge in the west, intensified by an epic drought. Likewise, in France, 80 counties faced drought in August, 14,000 hectares of wildfires so far in 2017, more than double the traditional toll. As this extreme weather continues to dominate the headlines, what can city leaders do to protect their communities – and using municipalities in the U.S. and France as examples?

It’s worth exploring. But, first we should mull two critical climate questions that serve as foundations for our exploration. Are the enduring structures we build able to withstand climate change? And are climate risks and opportunities shared equitably within our communities?

And to be clear about the risks we face, they generally fall into three categories:

·      Increasing mean temperatures and frequency of extreme heat: Scorching hot days and nights grow more frequent, along with the intensity and length of warm spells and heat waves. High temperatures dry vegetation and soils, potentially sparking more frequent fires, landslides or subsidence. Droughts become more frequent, threatening water supplies and aggravating conditions for wildlife. Increased heat hurts outdoor workers’ productivity and exacerbates illnesses, such as asthma and chronic pulmonary obstructive disease.

·      Increasing extreme precipitation and floods: The timing, amount and type of precipitation is changing, causing more intense seasonal rain or snow and flooding. Floods can break down electricity, transport, water, sewage and telecom networks, triggering economic damages, especially from disrupting business continuity.

·      Rising sea levels: Hotter air temperatures raise sea levels as warmer and less dense seas expand and polar ice sheets melt. Higher sea levels increase the risk of coastal storm surges and push salt water into wetlands, higher up tidal rivers and deeper into groundwater systems. This submerges property and damages infrastructure.

C40 – the network of global cities collaborating to provide climate solutions for their residents – offers a helpful climate hazard taxonomy to view these primary hazards and their related city climate hazards. 


(ref: p.4)

So, how are cities to respond to the two climate questions? Here are five categories of municipal endeavors with examples of success from both France and the U.S.:

1.     Disaster risk reduction

Integrating disaster risk reduction into urban development policies and practice requires a new, systems-oriented, multi-timescale approach to risk assessments and planning. It’s necessary to reflect emerging conditions within specific, more vulnerable communities and sectors as well as across entire metropolitan areas.

Baltimore’s Office of Sustainability is taking steps to ensure that families, especially those in under-resourced communities, are prepared to respond to emergencies. Its “Make a Plan, Build a Kit, Help Each Other” events let residents create emergency plans and essential preparedness and grasp how to respond in emergency.

2. Adaptations while reducing greenhouse gas emissions

Integrating mitigation and adaptation is a high priority for cities in planning, design, and architecture. Engineering, ecosystem and social-based solutions should be considered to generate actions with the greatest benefits.

For instance, in April 2017, New York City released preliminary Climate Resiliency Design Guidelines to support stronger and safer infrastructure and building designs in a hotter, more extreme weather- and flood-prone world. The guidelines incorporate predictive climate data into all city capital projects to anticipate hotter heat waves, heavier downpours and sea level rise. For instance, they use light-colored and reflective pavement and roofs, shade trees and other landscaping to decrease the urban heat island effect. They also decrease energy use for cooling and set storm drainage standards that require permeable pavement and other green infrastructure to increase stormwater absorption.

The Clichy-Batignolles urban project in the Paris area built a “climate-proof” urban area that is both attractive for residents during the summer time and able to absorb precipitation during heavy rain periods. A 10-hectares park – open 24 hours a day with pools, drinking fountains, water jets, along with cooling buildings that reflect sunlight and have green roofs, etc. – has reduced energy demand and stormwater treatment. The volume of stormwater treatment declined by 50 percent.

3. Risk assessments and climate action plans co-generated with the full range of stakeholders and scientists.

Processes that are inclusive, transparent, participatory, multisectoral, multijurisdictional and interdisciplinary prove to be the most robust because they enhance relevance, flexibility and legitimacy.

Cleveland’s asset-based Neighborhood Climate Action Toolkit was created in partnership with community development corporations. It helps residents to identify and advance neighborhood priorities that further the city’s climate action goals. In addition, Minneapolis unites community representatives and city staff to plan its Green Zones initiative. They actively avoid deficit-based planning, which focuses on the community’s vulnerabilities, and are building on existing community assets via access to a wealth of community knowledge and networks.

Paris’ adaptation strategy reflects a long process (2010-2015) that mobilized all departments and many institutional, operational and scientific partners. Key aspects of its design and application include raising awareness and recognition of the collective benefits of adaptation. In 2010, the exhibition, « +2 °C… Paris s’invente » (Plus two degrees Celsius, Paris invents itself) demonstrated how concrete adaptation will benefit all Parisians through development of a science-based adaptation strategy against extreme events and to ensure food supplies and foster a more sustainable city. The strategy included more than 100indicators (e.g., the number of Parisians who live more than seven minutes walking distance from a cool space; the number of free drinking fountains in Paris, the surface area in an electrically fragile zone in case of massive flooding).

4. Needs of the most disadvantaged and vulnerable citizens.

Greater climate change impacts impact the urban poor, elderly, minorities, recent immigrants and, otherwise, marginal populations. Equity and justice improve wellbeing and social and economic development are foundational to effective climate change action.

In Seattle, city and community leaders seek to deepen connections between race, social justice and environment. The Equity & Environment Initiative created The Community Partners Steering Committee to “ensure that those most affected by environmental inequities would lead in creating the agenda.” This process has highlighted community priorities that create climate action and social cohesion, including safety and walkability, public transit, green space and gardens and youth programming.

In Nice, social services put a targeted action plan in place affecting those most sensitive to climatic crisis. A database registered the most isolated and vulnerable based on medical and social services networks and local media. So, during heat waves, volunteers call and visit the most vulnerable residents every other day, offering advice on good practices to combat high temperatures. This initiative reduces the sensitivity of isolated and vulnerable people and increases the social link and solidarity between youth and elderly.

5. City climate adaptation described in terms of lives, livelihoods and dollars saved.

Quantifying the benefits of climate adaptation proves essential to attract future capital. Such access to both municipal and outside financial resources funds climate change solutions. Sound urban climate governance requires longer planning horizons, effective execution mechanisms and coordination. Connecting with national and international capacity-building networks helps to advance the strength and success of city-level climate planning and implementation.

Resources for the Future quantified the benefits of a green infrastructure investment around St. Louis on the Meramec Greenway. They figured the benefits reduced flood damage and enhanced property values by amounts three times greater than the flood damage-reduction benefits.

By buying property in urban areas from families who had been flooded often and volunteered to participate, Missouri saved roughly $100 million—earning a 212 percent return on its buyout investment.

Albuquerque and Santa Fe, New Mexico, as well as several Indian tribes worked with federal and state governments, water managers and companies to create the public/private Rio Grande Water Fund to restore forests and to pay for clean water protection and forest thinning to decrease the threat of wildfires.

Washington, D.C., issued the performance-based Environmental Impact Bond to reduce flood risks and ensure that city residents have access to clean water. Funds are invested in green infrastructure and paid back to social impact investors as performance targets are met.

Insurance company FM Global estimates that businesses that made a $7,400 investment to reduce extreme weather risk ahead of Hurricane Katrina averted an average of $1.5 million in losses.

Cities must start immediately to develop and apply climate action

We are in the greatest period of urbanization and rapidly changing climate in recorded human history. Cities that ask the climate adaptation questions now and take steps such as those described above will create the transformation that saves lives and livelihoods in the face of climate shifts. In the process, they will avoid counterproductive maladaptations; help deter locking-in that can damage long-lived investments and infrastructure systems; and ensure cities’ potential for the transformation required to lead climate change. Cities that create resilience will avoid being in the headlines after disasters. Rather, as Chicago has, they will begin to tout their resilience as a business asset

Joyce Coffee is president of Climate Resilience Consulting, working with leaders to create strategies that protect and enhance markets and livelihoods through resilience to climate change. Rachel Jouan is founder of Climate Adaptation Consulting in France, working with local, national and international governments to increase resiliency through adaptation to climate change.

Paying for Resilience: Market Drivers and Financial Means

When I worked for the City of Chicago applying its Climate Action Plan, our work was funded by the lack of climate resilience: The City had successfully sued the electric utility for failing to provide service during an extreme heat event, and the settlement paid for many staff and climate-related. That’s a rare situation, though. Today, requests from cities, nonprofits and philanthropy to figure out finance to help fulfill resilience dreams fill my inbox.

In the last few months, I’ve offered counsel to cities as diverse as Minot, N.D. (at the invitation of FEMA), Miami Beach (at the invitation of the Urban Land Institute) and Buras, La. (at the request of the Rockefeller Foundation 100 Resilient Cities). Speaking with these local and innovative government leaders has helped me refine my own understanding of the current state of resilience finance in the U.S.

Here are at least four market inspirations I have gleaned that could drive more resilience finance:

  1. In its report “Climate Adaptation and Liability,” the Conservation Law Foundation unveils numerous cases describing a new era in the “duty to care” for designers, real estate professionals and municipal government officials as events that future climate scenarios envision replace force majeur events.
  2. Although the federal National Flood Insurance Program distorts price signals in the risk transfer elements of the market – and I strongly encourage you to engage on its reauthorization, perhaps starting by reviewing this excellent piece – in such highly vulnerable markets as Houston and Miami, an insurance price signal is emerging as flood insurance premiums rise faster there than elsewhere.
  3. Credit rating. Moody’s and Standard & Poor’s have made announcements that the physical risks from climate change will be factored into municipal credit ratings, and S&P has been clearer about this impact, for instance as shown in the article How Our U.S. Local Government Criteria Weather Climate Risk. Municipalities don’t want their debt to be more expensive and, therefore, less attractive to investors, so this is a big deal.
  4. Big data. With the emergence of big data modelers such as Airworldwide, RMS and Core Logic in the past decade, more financial services professionals will have growing access to the cost of both actual and avoided loss from extreme events. While cities cannot afford these big modelers, financial sector parties are applying them to city problems and generating new methods to create “bankability” – revenue generation from projects that traditionally don’t generate rates or fees. For instance, resilience bonds, described in a very approachable way by re:focus partners in this report, link future insurance savings to a bank of funds for current risk mitigation projects.

Along with these drivers, progress continues in the debt market, creating more means to fund city resilience. Most importantly, that headway should include a swift pivot of general obligation bonds from traditional investments that neither create collateral benefits nor consider climate change scenarios to resilience investments promising more long-term return and performance given future risk. That is really the only way to ensure we create resilient cities. But with close to 80,000 issuers of municipal bonds in the country, the four key drivers above are key for ensuring this transition.

At the same time, the growth of innovative bond mechanisms could also help cities increase funds for resilience. The District of Columbia has had success with green bondsfor its water and sewer authority, while the Massachusetts Bay Transit Authority has created excellent examples of sustainability bonds’ utility. The resilience bonds mentioned above are another in this category. Of course, catastrophe bonds – some with hurricane triggers – are another insurance-linked mechanism for getting money to cities after disasters.

In a future post, I will suggest ways cities can invite more resilience finance, given these market levers and financial means.

This post originally appeared on Triple Pundit.

Credit Rating Agencies Assess the Physical Risks of Climate Change

What about credit rating agencies as a market actor to inspire climate resilience? Already, the 11 recommendations by the Task Force on Climate-Related Financial Disclosure – sorted into Governance, Strategy, Risk Management and Metrics/Targets – are sinking into the market.  Many are turning to the credit rating agencies and asking them if they are even looking for information on climate risk and what they’re doing with any they find.

As I reported in late 2016 in a Triple Pundit article, “Laurels for Credit Rating Agencies, Levers of Change in the Adaptation Market,” the rating agencies have been exploring this subject for several years.  Last November, Moody’s Investors Service explained how it incorporates climate change into its credit ratings for state and local bonds. It said that cities and states are at greater risk of default if they don’t deal with risks from rising seas or strong storms.

So, what specifically should we expect from the rating agencies?  I recently participated in a Brookings Institute panel with Standard and Poor’s Managing Director Kurt Forsgren, who said that the S&P will increasingly consider climate change in its rating analysis.

Climate change risk and credit rating agency assessment

Today, in factoring climate change risk into municipal ratings, the rating services focus primarily on management effectiveness and planning that includes climate change risk. This is especially true in sectors with distinct climate risks that apply to their assets or revenue sources (such as water and electric utilities).  They often perform a qualitative assessment of the climate change risk when detailed information is lacking.

In addition to risk, they assess municipal resilience that looks for:

  • Long-term management plans with adequately funded emergency funds
  • Proper insurance coverage for the climate related risks for the region
  • Deeper and more diverse economies

Evidence from Utility Districts

But, in reality, what are they seeking? For instance, S&P analysis for corporate ratings indicates that natural catastrophes lead to a one-notch downgrade 40 percent of the time. We know that the Municipal Utility District (MUD) ratings in and around Houston did not take a near-term hit in S&P’s assessments immediately following Hurricane Harvey, although the agency notes that it does “not preclude longer-term [rating] challenges for Hurricane []- affected [] MUDs.”

S & P’s specific comments for the MUDs are instructive for all build projects, planned or in place: “S&P Global Ratings believes the largest potential long-term rating impact to MUDs would be caused by a decline in the district’s assessed values, which support not only operational revenue but also the district’s ability to pay its debt burden, which is a primary driver for our MUD ratings.”

It added: “MUDs with comparatively higher tax rates may face some practical taxing limitations as affected areas adjust their tax rates to compensate for declines in assessed values.”

Although S&P believes the robust reserves of most MUDs will insulate them from rating downgrades, the impacts they expect from climate disruption are pretty clear here. Credit rating agencies see the physical impacts of climate change as material to the financial system. The larger the shock event, the longer and deeper the impact on credit quality, especially for those with poor credit quality before the event.

This is a major reminder about the importance of resilience.  Communities struggling with poor credit quality will find it doubly difficult to borrow at favorable rates as the impact of climate change continues to grow – further exacerbating both market and social inequities.

Resilience Likely Helps

It seems we have the market signal we’ve been waiting for in the climate action community. This is a call to arms for all resilience brokers to build security, stability and sustainability in lower-resourced communities.

The key actions:

  1. Get ahead of climate risk by making knowledge of it front and center for existing physical asset and future investment planning.
  2. Collaborate among sustainability, risk, finance and insurance leaders internally and externally; climate change is no longer an issue to shift to the sustainability officer’s desk.
  3. Through actions one and two, make sure that every investment is an investment for resilience, not just a few show ponies.


S&P Global “Near-Term Rating Stability Does Not Preclude Longer-Term Challenges for Hurricane Harvey-Affected Texas MUDs” 5 September 2017.

S&P Global “How Long ‘Til We Get There? Major Post-Hurricane Recoveries in Recent Years.” 7 September 2017.

S&P Ratings Direct, “Climate Change Will Likely Test The Resilience Of Corporates’ Creditworthiness To Natural Catastrophes”, 20 April 2015.


This op ed originally appeared on Triple Pundit

We Survived Climate Change Eons Ago, but Could We Survive Today? Not Unless We Act Much More Swiftly Immediately

This article originally appeared on Triple Pundit

A compelling ad for The Great Course on investing shows a man’s hands grasping a giant golden egg. It reminds me of the ever-present effort to learn from the past. Yet, with climate change, have we learned valuable ancient lessons or are we doomed to repeat past mistakes?

We humans survived an abrupt shift in the climate to bitter cold conditions 11,000 years ago and, in brilliant pictographs, Egyptian pharaohs related how they survived epic drought. Paleontologists and anthropologists find in the historic record of bones, household implements and living quarters that abrupt and harsh changes in climate over decades forced populations to move to survive. These climate disruptions also triggered population crashes and cultural changes.
Researchers speak of the intrepid prehistoric humans the way we speak of today’s preppers: “These hunter-gatherers had a lot of skills and knowledge of how to use the natural resources. They could make shelters and houses and hunt, fish and collect plant materials.” Some at a well-researched site in northern England practiced and endured enough resilience that they did not have to abandon their homes or significantly change their way of life. A certain deer species appears to have been the primary food and clothing source that enabled them to withstand the cold.

Advanced Planning
Researchers also discovered that ancient civilizations planned for and promulgated policies – including cross-breeding animals to make them drought-tolerant and moving their agricultural heartlands to more verdant areas – to withstand a hundred-year drought. They were able to help their neighboring former enemies to prevent the worst of a famine. Still, we cannot know exactly how prehistoric and ancient humans persevered.
Several researchers think a major key to their survival was that for generations, they survived climate shifts. It had become a part of their lives so they recognized signs of change and prepared to help their communities survive.
By contrast, we have experienced many centuries of fairly stable climate. We not only are out of practice employing resilience to these extremes, but it appears we’re devoid of imagination as a society for what we ourselves have wrought and must do to prepare.
Today, climate disruptions definitely impact us. Consider:
” Health: Asthma cases have risen dramatically. Between 2001 and 2009, the number of patients diagnosed with asthma rose by 4.3 million, according to CDC reports. It is a leading cause of school absences across the country.
” Quality of Life: Extreme heat was the leading cause of weather-related deaths – more than 1,200 – in the U.S. between 2004 and 2013. The extraordinary heat wave that killed some 70,000 people in Europe in 2003 should have been a once-in 500-year event. At the current level of global warming, it has become a once-in-40-year event.
” Housing: Hurricane Irma destroyed one-of-every four homes in parts of Florida while over half of residential and commercial properties in the Houston metro are now considered at “High” or “Moderate” risk of flooding.
Like those ancient peoples, we have the perfect storm of events. They grappled with earthquakes, climate disruption and, consequently, invading neighbors. We confront earthquakes, deep societal inequities and pressing issues of a changing climate.
So, here is where we are at in terms of adapting to climate change. The assessment reflects a study of 100 Adaptation projects and leaders that I conducted with Dr. Susanne Moser and other researchers in 2017, funded by the Kresge Foundation
The positive view:
Some adaptation practices are underway and climate impacts are driving them. New actors and networks have energized the adaptation field, including such city networks as the Urban Sustainability Directors Network and 100 Resilient Cities. Adaptation also improves in certain areas: the adaptation knowledge base and increasingly available tools supporting adaptation. In addition, science and practice work together more frequently as leaders experiment with adaptation.
The negative view:
Driven largely by crises, the adaptation field is not creating a unifying vision/creative imagination for a future where people adapt and thrive. Adaptation remains mostly reactive rather than proactive. A sense of urgency is missing, and too many adaptation efforts are stalled at the planning stage. The prevailing emphasis on urban adaptation leaves small towns and rural areas behind and neglects important interdependencies between cities and surrounding areas. And while awareness grows as to the disproportionate impact of climate change on the most vulnerable-and the need for equitable solutions-few adaptation actors grasp how to incorporate equity into their work.
The future:
To avoid becoming the culture that fails, even in comparison with than prehistorical and ancient civilizations that survived climatic changes, we must accelerate mitigation and adaptation efforts significantly while building social cohesion and equity. This will close the yawning chasm through which we could fall. Today, the planet’s average surface temperature has risen about 2.0 degrees Fahrenheit since the late 19th century, and models predict it may rise by tens of degrees – indeed, 30 degrees Fahrenheit in some places – by century’s end.

We must strive to prevent, minimize, and alleviate climate change threats to human well-being and to the natural and built systems on which humans depend. It will prove exciting to fulfill this mission because by doing so, we create fresh opportunities to address the causes and consequences of climate change in ways that solve related social, environmental and economic problems.
But to achieve this, we must expand the number and type of leaders involved in helping communities adapt. Increase our capacity and tools of persuasion to make adaptation work more impactful. Ensure that the funds spent and policies enacted are in line with achieving this mission.

Egyptologists who study that empire’s collapse caution that when leadership “has feet of clay and isn’t willing to take the challenge on in an innovative way, then often the challenge will overcome them.”Today in our democracy, that leadership lies with all of us. We must create transformative change. And be brave and uncomfortable in embracing the challenges of both social inequity and climate uncertainty as we do so.

Pray that in the timelines of geology, climate and human history, we can pivot from a relatively stable climate to one that mirrors nothing humans have experienced historically. Our survival in the new era of climate change depends on it.

Joyce E. Coffee, president of Climate Resilience Consulting and a Senior Sustainability Fellow at the Global Institute of Sustainability (GIOS) is recognized globally for thought leadership in climate adaptation and strategies for improving corporate and government resilience.

Who Owns the Physical Risks from Climate Change? (And What One Move Can Make It Less Risky?)

This article originally appeared in Triple Pundit

We hear a lot about how the anticipated rise in sea levels could trigger significant increases in hurricane-related financial losses. But who pays that cost? Who, for instance, is bearing the cumulate expense of the 16 U.S. weather events in 2017 estimated at over $306 billion, far exceeding the previous record of $214.8 billion in 2005? It’s not immediately clear. And the financial markets haven’t yet clarified who owns our risky future.

So, let’s first consider who comprises the potential financial risk holders, assuming the physical risk is coastal flooding:

  • Insurance/Reinsurance companies who transfer risk from property to market.
  • Homeowners handling the aftermath, from soggy basements to ripped-off roofs.
  • Developers, the decision-makers who place buildings in and out of harm’s way.
  • Utilities, the critical service providers who rely upon conduits of every sort to transport water, energy and vehicles with revenue generated through fees.
  • Cities and municipal governments: owners of property and caretakers of constituents and the last line of the government safety net and taxation.
  • National governments, the agents of emergency management and loans and grants through various government mechanisms.
  • Engineering and construction companies that design and build using vulnerability data.
  • Lenders who use the collateral of buildings to offer debt finance to property owners.
  • Investors: They place bets on the market, often without knowing who and what the actual investment is and does.
  • Taxpayers who, especially for federal taxes, pay for distant emergency relief and reconstruction through programs like the national flood improvement program.

Regarding the recent storms, where in the market are we seeing this risk ownership? First, there are the householders and other property owners, insured or not, who are replacing their material goods after extreme events. Second, insurance companies are transferring some risk away from the property owners into a large pool of insured from diverse geographies. Third, the federal government that pays out through national flood insurance and other programs of one sort of another. (Ultimately, of course, the risk is held by us property owners who pay insurance and taxes.)

But, let’s examine what each of these three players could do to decrease the risk to the marketplace sparked by climate change:


Can insurers better inform the market as investors as well as underwriters? As investors, the insurance industry continues to develop?As specialists in risk

identification, risk prevention, risk mitigation and post event recovery, the industry employs Smart Risk Investment principles to, among other things, redefine “green finance” as “smart risk investing” and increase the volume of such investments. This should allow them to bring in all investable asset classes and overlay the risk managementand pricing knowledge to the asset side from the underwriting side of the insurance sector balance sheet.

Of course, as underwriters, insurers can decrease risk by sending a market signal, although the price of risk from those particular assets is higher than others. Already, we see this happening somewhat.


Taxpayers play several roles. First, they can harness relatively new tools to make better decisions, especially about where they purchase property. For instance, residents of Florida and Virginia should check out the free Second, primarily as voters, they can decrease risk by influencing ele

FEMA 2016 in Reuters view:

ction outcomes and voicing concerns to local, county, special district, state and federal elected officials. Those concerns can range from land use changes in the zoning code to prevent more coastal development and requirements for resilient infrastructure to changes in the federal insurer-of-last-resort process to decrease reconstruction of properties that flood repeatedly.

National Government

Speaking of which, in the U.S., the National Flood Insurance Program needs reform, which may explain why it’s reauthorization was kicked down the road in September and remains outstanding. An informatively whitepaper, Strengthening the National Flood Insurance Program, largely written by Georgetown Climate Center’s Jessica Grannis, addresses the key issues of adaptation equity and provides ways for taxpayers to avoid paying for the continual rebuilding of property in harm’s way.


The June 2017 guidelines by the G20 Financial Stability Board Task Force for Climate-related Financial Disclosures are a useful start. This series of recommendations sets out a voluntary, consistent disclosure framework for climate-related disclosures so that companies report on physical climate-change risks that affect business, operations, and financial conditions. But, for us who are a bit more distant from the G20’s big business, what shall we do?

One suggestion is that every decision-maker– from homeowners to mortgage bankers like Fannie Mae – integrate “stress-testing” into their decision-making and, for instance, ask what the impact would be of a one percent event on their portfolio. The insurance industry as underwriters, in an effort precipitated by Hurricane Andrew in the early 1990s, initiated such a process, which they call the one-in-100-year stress test. Arguably, it contributed to the continued strength of that market sector even after significant hazard -event years such as 2017 (when Hurricanes Maria, Harvey, Irma and Maria, fires and related mudslides created demand from policyholders for insurance payouts).

What might this one practice deliver? Could it include these outcomes? A reduction in the construction of new risky buildings in flood prone areas; improved returns (at systems-level) of allocated capital since less money would be wrapped up in risky business; acceleration of collaboration across sectors to decrease the one percent event causing harm; reduced vulnerability of communities and a signal that it was a good investment to focus on resilience technologies, innovations, products and services.

What do you think?

Measuring Project Scale Resilience: Five Ideas Gleaned from the World Bank

The World Bank recently released a document I find myself coming back to again and again: Operational Guidance for Monitoring and Evaluation (M&E) in Climate and Disaster Resilience-Building Operations. I talked with its Nathan Engle, its primary author, to learn more about its genesis and intent. 

Nate is a senior climate change specialist with the World Bank’s Climate Change Strategy & Operations team. He has spent over a decade leading research, dialogue and solutions around assessing and monitoring adaptation, vulnerability and resilience.

Here are five insights gleaned from our conversation that I consider valuable for the resilience field:

1.    Nate worked for two years with dozens of resilience experts from the World Bank and elsewhere to determine how to measure resilience at the project scale One thing they did differently: Their measurement approach started from the monitoring and evaluation system for a project. Often, resilience measurement efforts start by trying to derive a resilience indicator by way of an investment screening or through aggregate measures or indices.

2.    Nate and his collaborators determined that the best way to measure resilience involves stepping back from an indicator focus and, instead, embedding indicator development as a vital element as part of a broader M&E system. The guidance focuses on a measurement process that considers robust theories of change, pathways to resilience, indicators specific to a project based upon its sector or geography and a project’s intended outcomes.

3.    Ultimately, they found that no resilience measure applies universally and neither does one indicator per sector. Rather, particular sectors need their own measures that are context-specific and provide scaffolding for further understanding of resilience building over time. In their resilience measurement work, Nate and his team discovered early that trying to make a single resilience indicator could incentivize bad, or maladaptive projects, and at the very least, be misleading.

4.    Since resilience building can be complex with longer-term outcomes and impact, to create more resilience in the near term, Nate advises that project managers build in mid-term reviews that invite restructuring. Harvesting insights from the implementation process to date may even spark changes to a project’s foundational theory of change. This comprises a culture shift since most evaluations seek to show the project is doing well and should keep going, without a feedback loop shaking the project up.

5.    The guidance suggests setting aside money up front to build in evaluation mechanisms, given how critical it is that we learn from resilience projects, many of which in this early era are testing new approaches.

I encourage you to read the guidance, all the way through the appendices, to reflect on these highlights and draw your own conclusions. 



Climate Disasters Hurt the Poor the Most. Here’s What We Can Do About It.

We need to analyze what puts disadvantaged communities at risk and engage marginalized people in disaster planning.

The following article originally appeared in Governing:

Image wikipedia Migrant Mother (Florence Owens Thompson), taken by Dorthea Lange in 1936

Last year, Americans endured an unrelenting series of climate calamities: hurricanes in Texas, Florida and the Caribbean; wildfires and mudslides in California; drought in the Dakotas; flooding in the Midwest. Those disasters caused more than 360 deaths and more than $300 billion in losses.

And there is more where that came from. As the planet warms, climate-related disasters are becoming the new normal. Over the past five years, Americans experienced at least 10 major disasters a year-double the average number of such events since 1980.

News accounts sometimes portray disasters as great levelers, affecting rich and poor alike. But the reality is that it is the least fortunate who bear the greatest social, economic, health and environmental costs. Three months after Hurricane Maria struck Puerto Rico in September, for example, roughly half of the island's population remained without power. The flooding in Houston caused by Hurricane Harvey had a disproportionate impact on low-income communities and communities of color. And in fire-torn California communities, many poor and elderly residents were displaced and made homeless.

Why do the poor and marginalized take the brunt of climate impacts? There is, of course, discrimination against and indifference to the fate of communities that lack political power, as in Puerto Rico. And, as in Houston, low-income people and people of color are more likely to live in or near a floodplain, in industrial areas that spread pollution when they flood, and in neighborhoods with substandard infrastructure. In California and elsewhere, the poor are more likely to live in rental housing, may not be able to afford insurance, and often hold jobs that don't tolerate unexpected absences from work. In short, the poor are less able to insulate themselves from harm.

This is true of not only of individuals but of communities at all scales. A study published last year in the journal Science documented that the poorest one-third of U.S. counties sustain greater economic hardship than their wealthier counterparts from hurricanes, rising seas and higher temperatures. By disproportionately affecting the poorest people and communities, climate disasters deepen poverty and widen inequality. How can we prevent that from happening? As we plan for a changing climate, equity must be a top priority. That is the goal of the "climate justice" movement, a diverse coalition of national, regional and grassroots organizations.

Climate justice holds that poor and marginalized people, who bear the least responsibility for contributing to the causes of climate change, should not bear the greatest burden from its impacts. Ensuring that climate risks do not disproportionately harm those who are already vulnerable demands a deep analysis of what puts some communities at risk, including racial and socioeconomic disparities. A useful resource for that analysis is the federal government's Social Vulnerability Index, which looks at factors such as poverty and mobility to assess vulnerability at the census-tract level.

It is also essential to make sure that marginalized people have a voice and a seat at the table. A community group in New York City called WE ACT for Environmental Justice, for example, has initiated a climate resilience planning process led by neighborhood residents. In a series of public meetings over six months, the residents drew on their own knowledge and vision to produce the Northern Manhattan Climate Action Plan, which calls for community-controlled renewable energy, emergency preparedness, social hubs and participatory governance.

Other communities are effectively integrating equity into climate adaptation. In Baltimore, for example, the city's Office of Sustainability has cultivated the art of engaging at-risk communities in disaster planning. City staff make it easy for residents to attend meetings by providing free transportation, food and child care. And at those meetings, staff do more listening than talking. Kristin Baja, Baltimore's former climate and resilience planner, calls this approach "sharing power." One outcome of this initiative is a network of "resilience hubs" throughout the city that provide shelter, backup electricity and access to fresh water and food during emergencies.

As we brace for more frequent and devastating storms, wildfires and heat waves, it is also crucial to address the roots of the climate crisis. That means an all-hands-on-deck effort to slow the advance of climate change. If greenhouse gas emissions remain on their current trajectory, the earth could warm by up to 9 degrees Fahrenheit the end of this century, with sea-level rise of up to 8 feet. In that scenario, vulnerability will not be confined to those at society's margins; it will engulf all of us. Today, we have the power to bend the curve of that trajectory and move toward a sustainable, equitable future for all.

For more on the subject of environmental justice and climate change, see "Rising to the Challenge, Together," a recent report prepared for the Kresge Foundation.

Real Estate Investors Finally Consider Climate Risks

Image credit: Climate Central N. Lamm

2017 was quite a year for extreme events. Shocks and stresses from 16 events that each triggered over $1 billion in damages and took their toll on lives and livelihoods in the United States alone.  And it wasn’t just hurricanes, although Hurricanes Irma, Harvey and Maria played their part (with damages of $161 billion, $102 billion and $45 Billion respectively).  Many other climate- and weather-related disasters hit the U.S., including hail and ice, heat and wind, and inland flooding.

Many experts predicted this was likely – and I don’t mean the climate scientists.  The Global Risk Perception Report – the latest of which came out last week – has for the last five years included the failure of climate change mitigation and adaptation on its list of the five global risks in terms of impact. It bases its list on survey data from about 1,000 World Economic Forum advisors worldwide. Other risks in that set also are climate-related such as water crises, major natural disasters and extreme weather events.

Plus, the stakes are high for the real estate industry. The UNFCCC 2016 Biennial review of climate finance notes that $35 trillion in real estate assets will be at risk in 2070 if we make no changes to our current carbon emission trajectory. That figure represents about half of today’s global assets under management in any industry sector.

But how do these risks relate to the U.S.? The shocks of powerful storms can destroy many of those assets, as the devastation from this year’s climate disasters reminds us. Longer-term changes in temperature can cause other shifts. Even from where I sit in the middle of the country in Chicago, we are in the midst of a shift to a climate that will look more like New Orleans by the end of the century.

So, there are both orderly shifts and shocking disasters occurring because of our changing climate, and I think one question we want to ask is: What does that mean for our shift as investors?  Will it be orderly or will it be a flight?

We can’t say we haven’t been warned. This analysis from Zillow shows that if we have sea level rise of six feet – predicted by the end of the century along much of the U.S. coast – we lose houses worth roughly $900 billion in value. And this applies just for coastal properties. It doesn’t include other risks such as inland flooding and fire that also loom. It also doesn’t value the PTSD, injuries, loss of life, loss of community and livelihoods that these figures suggest.

These data came to mind as I was preparing to speak at this week’s National Association of Real Estate Investment Managers Sustainability and investment Summit, whose tagline is “License to Think in Public.”

One of the most thought-provoking data I shared:  U.S. counties facing the greatest risk from natural disasters have the highest and quickest rising home values.   Counties with the very high risk from these disasters have seen a 55 percent appreciation in their already very costly homes in the last 5 years.

The U.S. finally received the much-anticipated Multihazard Mitigation Council’s latest cost benefit analysis, illustrating that, on average, every dollar invested in disaster mitigation pays back $6.

The investors at NAREIM, representing over $1 trillion of assets under management, think it should, and some even think it will. What they need: project-level natural hazard data that includes climate change projections. This is something the climate resilience field is working on, with a variety of firms jockeying to be first with the roll out of their proprietary software.

In the meantime, as my fellow panelist Chris Smy, Global Practice Lead at Marsh Inc., noted, the stakes are high as insurance companies, by and large, do not price their policies according to the longer-term climate risks, and developers persist in going where the money is, which is along the coast.

Yet Darob Malek-Madani with National Real Estate Investors showed that some investors are taking notice. His firm finished a study that convinced them to no longer invest in Miami. Except for the financial situation of the state and city, he said, they might even prioritize Chicago.

Jack Davis – RE Tech Advisors and a resilience leader with Urban Land Institute – reminded us that the stakes go well beyond real estate. As the New York Times reported last year, gross domestic product, especially in the Southern states, is predicted to record losses of 10-20 percent of GDP, hitting the poorest residents hardest.

I thought that when real estate investors bring equity questions to the table, we can perhaps sense a shift underway. Certainly, the investment community at large is more vocal about the risks than in the past, though silent on the equity questions. The Financial Stability Board’s Taskforce on Climate Change-related Financial Disclosure (FSB-TCFD),led by Bank of England Governor Mark Carney and Michael Bloomberg, is developing climate-related financial risk disclosure commitments for companies. The big guys, though, are not waiting for that guidance to disclose. My library is filling with articles that say what BlackRock demonstrates: Their investment stewardship features climate risk disclosure as a key priority.

While my climate resilience colleagues often ask where we can find financing for climate resilience, this group of investment managers brought a fresh spin to the money question: How can we avoid future investments in risky properties? Both questions are valuable, and it’s great to see some in the real estate industry “thinking in public” about how to make this market transformation happen.

This post originally appeared on Triple Pundit:

2018 New Years Resolutions!

This post first appeared in

My collaborator Kim Lundgren recently asked me what I thought it would take to accelerate adaptation - here are my thoughts, resolutions for a busy 2018!

I envision a world with more lives saved & livelihoods enhanced in the face of climate change disruption. Here are three resolutions to ensure I am contributing to a resilient future in 2018 and beyond.

  1. Grow the adaptation Field: More leaders need to have the resources to embrace adaptation in their fields. The National Climate Assessment, released in November, reminds us it will be none too soon. So in 2018, I resolve to work with the American Society of Adaptation Professionals and university partners to help professionalize the practice through the creation of an adaptation training program.
  2.  Measure resilience: The Global Adaptation and Resilience Investment Investor Guide released at the One Planet Summit in Paris in December reminds us of the need to make the financial case for adaptation. So in 2018, I resolve to advance assessments and tools that assess and disclose climate risk and measure progress toward resilience.
  3.   Jump start equity: Decision-makers need to make climate action fair. CBS Money reported in December that 'Climate gentrification' could add value to elevation in real estate while in the article the Hip Hop Caucus points out the stakes are high since 'People's lives, their livelihoods and their culture' are at stake. So in 2018, I resolve to ensure that all projects I work on address climate challenges through adaptation that enhances equity and social cohesion. 

Wherever we sit, we must become relentless questioners of the status quo, asking the climate question that New York’s Adam Freed and I drummed up as city practitioners in the 2010s: 'Are the enduring structures we build able to withstand—and mitigate—climate change?' To make it easier for cities to ask and answer the climate question, I’ve made my city adaptation assessment tool open source. It’s a complement to the KLA Community Dashboard.  Check it out!

10 Tips for a National Infrastructure Bank that Furthers Resilience Investments

This blog originally appeared at the National Council for Science & Environment:

We know the majority of infrastructure systems in the US are both maxing out to meet changing demands and aging. Changing weather patterns further complicate these challenges with flooding, extreme heat, freeze-thaw pattern changes, and fires -married with more built form development – placing infrastructure under increased pressure and making it susceptible to catastrophic failures.  To further strength, safety, security and thriving for our communities, America’s future requires infrastructure that is resilient to these changes.

When we say resilient Infrastructure, what do we mean?

Resilient infrastructure:

  • Withstands and responds to natural and manmade shocks and stresses.
  • Uses redundant and predictive design to plan for possible failures.
  • Produces multiple benefits to maximize value for citizens and natural and human communities.


We know that past and current inadequate investments in infrastructure systems put U.S. communities at risk. Based on the physical condition and needed investments for improvement, The American Society of Civil Engineers grades existing US infrastructure a D+.[i]

At the same time, ASCE estimate that 54 percent of America’s infrastructure needs for the next decade are unfunded, a $1.1 trillion shortfall.[ii] Where will we find the funds to fill the gap?

The Federal Government is a major funding source for infrastructure investments – a quarter of 2014’s $416 billion investments, for example.[iii]Currently, there is political interest in investing in infrastructure. President Trump has called for an infrastructure package of up to $1 trillion[iv]including assets from a National Infrastructure Bank.

To meet our generation’s challenges, such a bank will need to spur infrastructure rehabilitation, creating resilient infrastructure to modernize our strained systems.

How do infrastructure banks leverage private and public dollars?

Federal funds can capitalize an infrastructure bank, that then lends to state and local governments at below market rates. These loan funds can be used to attract private capital or to provide loan guarantees or credit enhancements. Infrastructure service revenues repay the loans, recapitalizing the bank to fund other projects.


Here are 10 tips to ensure that a National Infrastructure Bank finances resilient infrastructure:

  1. Invite advice from financial services experts, including institutional investors, insurance and credit rating agencies, to maximize market stabilization and growth.
  2. Privilege the redevelopment of existing infrastructure before financing new infrastructure in undeveloped areas.
  3. Require designs to account for changed future conditions, including climate change projections.
  4. Stipulate that projects must reduce federal financial exposure for flood insurance claims under the National Flood Insurance Program[v] and disaster recovery under the Stafford Act.
  5. Include criteria related to positive impacts on economic, environmental and social benefits.
  6. Prioritize projects that deliver multiple benefits.
  7. Leverage successful federal funding programs, allowing NIB financing to combine with funds from State Revolving, Transportation Infrastructure Finance and Innovation Act and Water Infrastructure Finance and Innovation Act funds.
  8. Include financial products that encourage private investment at various project stages.
  9. Allow special agencies and authorities to borrow to reduce existing government credit rating risk.
  10. Act now! The challenges before us are growing more urgent[vi] and now is the time to protect this and future generations of Americans.

Joyce Coffee is the president of Climate Resilience Consulting working with leaders to create strategies that protect and enhance markets and livelihoods through resilience to climate change.

[i] 2017 Report Card for America’s Infrastructure, American Society of Civil Engineers, March 2017,

[ii] Failure to Act, Closing the Infrastructure Investment Gap for America’s Economic Future May 2016

[iii] Congressional Budget Office Spending on Infrastructure and Investment, March 2017

[iv] The Trump administration announced a priority of reinvesting in American infrastructure and it is anticipated the legislation will be offered in 2017. Senator Schumer and other Democrats have also proposed an infrastructure investment plan and banking structure –

[v] 100 Resilient Cities, Strengthening the National Flood Insurance Program

[vi] U.S. Global Change Research Program November 2017 Executive Summary: Climate Science Special Report: Fourth National Climate Assessment (NCA4), Volume I


‘Net to Me’ – Why developers aren’t the answer to better risk-related land use decisions

I recently became a member of the Urban Land Institute, inspired by its excellent set of case studies Returns on Resilience: The Business Case and driven by a question I thought their real estate-related members might answer:  Why are developers still betting on Miami and Malibu.


The irascible John McNellis, author of the ULI book “Making it in Real Estate” and president of McNellis Partners LLC, provided a great answer: “Dude.” 


As he described the pros and cons and highs and lows of deal-making, he relayed the woes of a colleague who unloaded a Malibu development before it was ripe based on terms from his financiers. The developer was frustrated, McNelis said, “since you know, Malibu could gain more and more value like the pyramids at Giza.” 


At the Q&A, I saw my chance to address this whip smart development industry player:


“Sir, you mentioned the potential for really long-term value growth in Malibu properties.  But in our lifetime and surely that of our children, that property actually will be under water- due to sea level rise.  Why do thoughtful developers continue to invest in Miami and Malibu even as the physical risks from climate change mount and the imposition on the property owners in harm’s way, as well as the U.S. taxpayer, grows apace?”


His response, in effect: I knew a guy whose property had flooded numerous times and I said to him, “Dude, why don’t you raise It 10 feet or something.’  He continued: “It is a shame….that we use public insurance for beach properties where we know they’re going to be flooded.  We should give them one bite at this apple. If it floods once, here is the money. But then no more, no more insurance.”


It’s great he knew what I was talking about, and his answer was interesting: Essentially, elevate property to accommodate the rising tide and change our National Flood Insurance Program to one-and-done. But that it was so easy. 


He ended his formal remarks with a helpful reminder that successful developers always calculate the NTM, “Net to Me.”  Ten deals can deliver for instance a basket of five gains, three break-evens and two losses. But the key is to always ask in any deal mix not what will be the profit, but what will be the “Net to Me.”  That’s true of most partnerships, mine included, but it doesn’t stack up for climate resilience.


Even as the memories of this season’s three hurricanes and devastating fires persist, neither climate change nor extreme weather were mentioned once from the mainstage on ULI’s Fall meeting’s first day.  Granted, the ULI magazine editor closed her letter to the conference edition with condolences, and a discussion session about urban reliance was well attended.  Still I have an initial answer to my question:  Developers are not (yet) paying much heed to climate risk….


As we poured out of the session, I converged with several in the audience who were shaking their heads at my question and saying, “It’s not going to happen – development will go where the money is.”  I wondered, “If beach property could not get mortgages because the insurance industry wouldn’t insure coastal storm risks any more, would that do it?”  They just laughed, looking out the window at LA’s skyscrapers built perilously close to the San Andreas fault and challenging each other to guess how much profit each floor could generate.

Midwest Welcomes Climate Change Migrations North

For the third straight year, Illinois lost more residents in 2016 than any other state. But could climate change alter that trend? Chicagoans are talking about how much better the Midwest region seems since Hurricanes Harvey and Irma left such a devastating swath from Texas to the Atlantic coast.

A friend’s parents are reconsidering leaving Chicago to retire to Florida, a neighbor’s family in Houston talked about moving the family hub north as they camped out in his Detroit guest room after Hurricane Harvey struck Houston and Chicago's Paseo Boricua is bustling with friends and family who have made their way to the mainland since Maria. So, is a reverse migration to the Midwest out of the question?

Not at all. Even before these recent destructive storms, experts were contemplating that climate change could benefit the Chicago metro region. A March (2017) memo from the Chicago Metropolitan Agency for Planning staff to CMAP committees includes this possibility related to the region’s “On to 2050 Plan.” It said:

Potential economic opportunities may arise [in the Chicago metro region] from population growth and increased reinvestment, as residents and industries from areas more severely impacted by climate change impacts move to the region.

And our increasingly balmy winters may themselves reflect a changing climate. Research conducted by respected climate scientist Katherine Hayhoe, PhD., Chicago’s average temperatures have increased 2.6 degrees Fahrenheit since 1980, with the largest increases of almost 4 degrees occurring in winter.

With Midwest cities seeking ways to attract and retain top talent, grow their tax base, infill the city and retain big-city vibrancy, city and state leaders may want to make more of the area’s relative climate resilience. Especially since Americans already are on the move because of climate change.

Federal Emergency Management Administration data shows that in the past 17 years, over 1,000 communities in 40 cities have experienced managed retreat, largely due to flooding, permafrost melt and other climate-related changes. This managed retreat is a better option than forced flight. Over 20 percent of those who fled New Orleans and that region because of Hurricane Katrina never returned.

Of course, the Midwest isn’t free from changing climate conditions. Higher average temperatures that spark periods of extreme heat, heavy downpours and flooding will affect infrastructure, health, agriculture, forestry, transportation and air and water quality. But these are risks we can prepare for and mitigate against.

Important strides already have begun. Take air quality, which extreme heat makes worse and which Grist, a newsroom focusing on environment, contends is Illinois’ biggest climate worry. In the past several years, three factors have improved air quality in the state, maintains Respiratory Health Association’s Brian P. Urbaszewski, director of Environmental Health Programs:

  1. Major coal-fired power plants such as Fisk, Crawford, Joliet and Romeoville have been shut down. Some that remain, such as Cauveen, have added the latest technology scrubbers, reducing air pollutant loads by up to 99 percent.
  2. Federal rules on heavy duty on-road diesel engines require that any model year beyond 2007 meet particulate matter standards that are 90 percent tighter than before. The rule means that recent diesel trucks and buses emit one-tenth the soot than a 2005 model.
  3. Illinois’ Future Energy Jobs Act will increase cleaner energy, especially wind power, while requiring that utilities such as ComEd and Amren decrease electricity demand.

In addition, the Midwest possess pro-job, pro-innovation and pro-community choices to solve more. For instance:

  1. To continue to improve air quality, lawmakers and leaders can encourage the shift to higher fuel efficiency and battery powered private and public vehicles, including public buses.
  2. To improve stormwater management, the region can bring back the sponge function of the land by increasing the use of permeable paving, green roofs, tree planting, development of bioswales and disconnection of downspouts to prevent the overfilling of sewers.
  3. To decrease risk of illness from extreme heat, local governments can expand public awareness campaigns and emergency response plans that focus on communities with less air conditioning or with access to department stores and other cool places.
  4. To protect the agricultural industry from drought, farmers can enhance the soil, invest in water-efficient irrigation and seed varieties and consider what crops will flourish here as the climate changes.

Let’s start branding the Midwest as safe, secure and stable places from climate risk, making climate resilience a key feature of our pitch to young people, commercial enterprises and retirees.

Some Midwest cities such as Milwaukee already are grasping the potential rewards. Milwaukee is selling its water (from the same beautiful lake we get ours) as “the freshwater capital of the world,” cites former EPA Administrator Gina McCarthy, and has attracted over 200 water technology businesses in the region.

Coastal communities do not have many choices. Midwest cities do. One is to promote their resiliency while working diligently to improve it so they can be a welcoming host to climate migrants – and their bright minds, diverse backgrounds and tax dollars. As Mayor Emmanuel Prepares to host the North America Climate Summit, welcoming mayors from coasts and fire zones, he and his midwest peers demonstrate great climate resilience.

This article originally appeared on Triple Pundit titled "Midwest Braces for Climate Migrations North

Big Questions about Potential Big Climate Fixes or Fiascos: Geoengineering

I’m at Climate Week in New York participating in the Green Bank Network, Sustainable Investment Forum, American Security Project and Moody's briefings. Each is centering on major innovation, swift uptake and deep penetration primarily relating to energy efficiency and renewables. They’re the same themes of every Climate Week I’ve attended in the last five years – and I’m bored. I’m seeking the most strategic contributions about how to accelerate, spread, scale up and deepen climate action, beyond a gentle linear uptake of greenhouse gas mitigation that is not nearly profound enough.  

So, I wonder: What would excite me to take away about climate action at Climate Week, thus exercising my brain to determine if we are making the profound changes required. Today, I’m thinking beyond the apparent limits of the corporate, government and nonprofit leaders presenting here to a global adaptation: geoengineering. It’s the deliberate modification of a planet's environment by adding or subtracting a resource or energy input on a massive scale. 

I’m continually intrigued by Harvard physicist and entrepreneur David Keith, who researches one particular geoengineering technique, A piece this month includes this abstract: Solar geoengineering is no substitute for cutting emissions, but could nevertheless help reduce the atmospheric carbon burden. In the extreme, if solar geoengineering were used to hold radiative forcing constant under RCP8.5, the carbon burden may be reduced by ~100 GTC, equivalent to 12–26% of twenty-first-century emissions at a cost of under US$0.5 per tCO2.

The American Geophysical Union is seeking public comment about geoengineering. Just this week, the Washington Times and the Indian Express investigated geoengineering in major articles. I examine these to investigate the pros and cons of industrial scale technologies for capturing carbon dioxide from the air. While geoengineering as cloud seeding becomes almost mainstream in efforts to protect mega outdoor events like the Olympics or to break droughts, it seems only a matter of time before we apply geoengineering on a bigger scale. Thus, I ask:

  • Who gets to test this big idea?
  • What is the size of the pilot, and is it on a local, regional, national or global scale?
  • When do we start the experiment? Now, before the oceans acidify and the glaciers melt irreversibly (in this millennium)?
  • Can we control these experiments? Who is to say a storm or drought that occurs after them experiments isn’t due to some other force? How will we know that consequences reflect geoengineering?
  • Who pays? Some claim the costs are declining, but can international bodies set priorities for the funds, and should they be the bank?
  • How shall we feel when a country or sector at extreme risk from climate change takes matters into its own hands?
  • Who should be the winners and the losers? Is it better or worst that we cannot necessarily predict the outcome? Do emerging economies get a break, or do the poor remain at greatest risk?

Many of my friends, leaders in climate solutions, shake their heads in disgust when I mention geoengineering. But if we in the climate leadership community are not investigating it, we will find ourselves behind others - government, corporate or others, who are. I encourage all of us to ask these questions and more!

This op-ed is based on a piece I wrote five years ago.

Time to Raise Water Rates

While hurricanes Harvey and Irma deluge floods of biblical proportions, 21.7 million Americans – 11 percent of the country – were living under drought conditions on August 1.  And drought conditions are expected to worsen. In fact, in Montana and North Dakota an unprecedented drought is crippling farms and forests.

The impact is dramatic. Not only does drought increase demand from water systems, it decreases snowpack, harming long-term water supplies. It sparks fires as forests and grasslands dry out. It influences the amount of food we grow – and, therefore, food prices.

Still, the issue isn’t simply climate change. Our water systems are under extreme stress from lack of investment to maintain them. It helps explain why the American Society of Civil Engineers rates the country’s drinking water infrastructure a D. It calculates that our aging and underperforming infrastructure serves as a drag on the U.S. economy – costing each American family $3,400 a year.

The right rate is good for the market

Usage rates will continue to be the primary revenue source for water systems. Consequently, utilities should be generating higher rates that cover their costs now and anticipate future water stress.  And while it may seem counterintuitive then for utilities to push for water conservation, it helps keep rates lower in the long run. For instance,  research shows that residents in Tucson, Ariz., pay water and wastewater rates at least 11.7 percent lower than if they hadn’t conserved water the past 30 years.

Getting customers used to higher water rates should be relatively easy, even if people are getting tired of escalating user fees, in general.  The average price of water in the U.S. is about $1.50 for 1,000 gallons. At that price, a gallon costs less than a penny. That compares with bottled water costs that average $1.22 a gallon and electricity at about 12 cents per kilowatt-hour. (The typical U.S. household uses about 908 kWh of electricity monthly.)

Water as a competitive advantage

What’s strange is that only three of the 10 most expensive urban water rate structures are in drought-stricken areas, and they’re in San Diego, Goleta and Monterrey, Calif. On the other hand, Milwaukee, considered by former EPA Administrator Gina McCarthy to be the “freshwater capital of the world,” has accumulated over 200 water technology businesses in the region, academic programs and economic development organizations all dedicated to advancing freshwater technologies. In the process, it has taken a comprehensive cluster-development approach to water.

Water rate structures can enable all of us to enjoy cheap, ample access to clean water while preventing the water hogs from being too piggy. Resources such as Financing Sustainable Water strive to demonstrate how to balance multiple objectives like long-term fiscal health, efficiency, affordability, etc.

Given that resilience includes good governance, decreased risks from climate change, improved public utility service delivery and enhanced economies, it seems smart to put water rate increases in place now to mitigate both climate stress and the persistent and ongoing aging of our infrastructure.

Image Sources: World Map

This post originally appeared on Triple Pundit:

Hurricane Harvey – a Tragic Yet Teachable Moment

Like Houston and its neighbors, many municipal governments are painfully aware they are at risk when an extreme storm hits. The devastation from Hurricane Harvey is of biblical proportions, and we mourn the loss of lives and livelihoods that it has caused. Still, there are valuable takeaways from it, and here are 10 that we should take to our city departments and city councils immediately:

  1. Coordinate federal, state, and local planning, building and rebuilding requirements and review them to prepare for such a disastrous storm. This should help speed up assistance for property owners seeking post-disaster assistance.
  2. Establish building restrictions and setbacks through zoning codes that consider a once-in-500-year weather-related catastrophe occurring. These changes will only affect future structures, but they will help protect a community for future generations. Also, set property owners’ expectations for the future value of their property, potentially including a “savings” clause so that a setback won’t remove all value from current lot owners.
  3. Prohibit private coastal armoring at the development-permit-process stage.
  4. Educate the public about the risks associated with coastal living and the ways in which building restrictions address those risks.
  5. Establish a policy about repetitive loss, limiting the number of times a building may be severely damaged by coastal events before it must be demolished.
  6. Put plans in place for a buyout program that would go into effect soon after a disaster for residents most affected by a flood or other weather-related disaster.

Speaking of buyouts, here are four actions that can be taken in Houston and other cities to help their flood-ravaged residents:

  1. Move quickly. As families are weighing their options and trying to find normalcy for the short and long haul, buyout programs are most successful when initiated immediately after a natural disaster
  2. Determine where you want development to occur and assist homeowners in relocating to those areas
  3. Identify those areas that have experienced repeated loss and prioritize the homes there for buy out. Also, consider where continuous areas of land can be returned to their “sponge” function with buyouts of contiguous properties turned into dry-until-rain floodplains. Make these areas multifunctional (e.g., parks, bike paths) to provide community amenities.
  4. Raise awareness about the benefits and costs of remaining in vulnerable areas, clarifying the benefits of acquisition. Be transparent and work with trusted nonprofits and community groups – listening first and then speaking in a unified voice to raise this awareness.

In addition, create a standard formula to determine property values that are fair and avoid costly and time-consuming negotiations.

Thanks to the “Managed Coastal Retreat Handbook” from the Columbia Center for Climate Change Law for many of these ideas.

This post originally appeared at Triple Pundit:

Image credit: The National Guard


Summer Reflections: Top Trends in Resilience

Summer is a great time to reflect on my field. Here are five resilience trends that repeatedly enter my client work.

1. Leaders’ sustainability concerns grow, especially about water

Based on a survey of over 1,000 “educated elites,” this year’s World Economic Forum Global Risks Report[i]  ranks extreme weather events, water crises , major natural disasters and the failure of climate change mitigation and adaptation among the top global risks in terms of impact – surpassed only by weapons of mass destruction.  

In the United States, floods[ii] are a growing risk in coastal and river-related environments as are communities supported by combined sewers. Local and state governments depend on the U.S. National Flood Insurance Program to help constituents with risk transfer.[iii] But that program is $23 billion in debt and must be reauthorized by Sept. 30.

Related local, county and state government concerns over water issues are reflected in recent resilience initiatives such as:  

·      National League of Cities: Resilient Water Management: Strengthening Communities & Growing Economies

·     International City/County Managers Association: Managing Disasters at the County Level: A Focus on Flooding

·     ICMA: County Water Systems: A focus on Developing Resilient Infrastructure

·     National Association of Counties: Naturally Resilient Communities online guide toolkit

Further, water and wastewater utilities foreseeing droughts as well as growing extreme precipitation and coastal storms near their capital assets, increasingly focus on resilience. These include activities that complement traditional infrastructure such as “green infrastructure” that uses landscaped areas to absorb and reuse water. For example, the Water Environment Federation[iv], and the American Water Works Association[v] possess resilience platforms for their utility manager members.

At the same time, governments are aware of their crumbling water infrastructure. In its biannual report card, the American Society of Civil Engineers gives a grade of D for water infrastructure and D+ for wastewater infrastructure.[vi] It should be noted that every dollar spent on resilience saves at least four dollars in future losses, estimates the Multihazard Mitigation Council.[vii]

2. Cities see resilience as a competitive advantage

Increasingly, cities embrace resilience. The U.S.-based Star Communities, which evaluates and certifies sustainable communities, and the Urban Sustainability Directors Network of 100-plus city sustainability leaders say no other issue commands as much attention as resilience. Also, two dozen of the 100 cities in the 100 Resilient Cities program pioneered by the Rockefeller Foundation are emphasizing resilience.

Why? Cities explain that resilience helps them to compete to attract more jobs and to be recognized as thriving, vibrant, and desirable places to live and do business.[viii]Politically, the ability to rebound quickly and successfully from shocks and stresses proves essential for a city to remain competitive, investable, and livable. Some cities, such as Milwaukee,[ix] promote their resilience as key levers for economic development and investment.

Indeed, municipal credit rating agencies are beginning to look at resilience-related risks in considering their ratings. For instance, they consider downgrades for communities at particular risk from rising sea levels, such as Norfolk, Va.[x] The agencies also are including climate adaptation in their suggested evaluations of green bonds.[xi]

Even the U.S. government’s withdrawal this spring from the climate change mitigation and adaptation-related “Paris Accord” allowed dozens of cities to publicly affirm their commitment to resilience goals.[xii]

3. Evidence grows of increasing U.S. natural disasters, environmental stressors

Over the past five years, Americans experienced at least 10 major disasters per year, each generating more than $1 billion in damages. That’s a doubling over the average number of such events from 1980-2016.[xiii] Global sea level since the early 1990s is rising at least at double the rates experienced in the previous century.[xiv] And the online real estate data firm Zillow calculates that 1.9 million U.S. homes are at risk (valued at $883 billion) from a six-foot rise in sea level.[xv]

Evidence of climate-driven changes is emerging across the U.S., including:  

·     Nuisance flooding during high and King Tides in Norfolk, Va.

·     Intense storms such as Hurricanes Sandy and Katrina, worsened by warmer oceans and higher sea levels that created havoc in the Gulf and East coasts.  

·     Prolonged droughts and unusual seasonal patterns disrupting biological processes and agricultural production in the Midwest and California; and thousands of Americans suffering the effects of extreme heat, extended allergy seasons etc.[xvi]

Underscoring these trends, local predictive risk data increasingly is available from both consultants and government sources such as the National Climate Assessment[xvii], which includes downscaled projections and high-resolution spatial climate data.

4. Financing for resilience is an emerging investor category

Resilience has emerged as an investor category of interest in the U.S., even beyond impact investing for giant asset managers such as Blackrock[xviii] and investment advisors such as Mercer.[xix] Likely growth sectors are water, agriculture, healthcare, energy, coastal areas and financial services. 

As for government-specific investment options, they include:

·     Water efficiency products, desalination, reuse.

·     Drought-resistant seeds, drip irrigation, resilient food storage and organization.

·     Vaccines, resilient medical facilities for extreme weather events, worker cooling.

·     Combined heat and power, distributed generation.

·     Microgrids, backup power, energy storage.

·     Early warning systems, advanced weather modeling.

Select governments, primarily local, are investigating how to gain additional funding and financing for resilience projects, while also considering the integration of resilience into all of their investor decision-making. They are investigating risk assessment and insurance tools to help inform the market in their region as well as investor tools, such as green and catastrophe bonds. The District of Columbia’s green river project[xx] is a well-known resilience bond issue that received strong demand from investors.

5. Resilience goes beyond the environment: governance, policy, operations are key

At the core of most resilience work isn’t an environmental practice but strong governance and policy arrangements, from water management to urban planning. Significant focus rests with the intersectionality that resilience invites. Resilience’s comprehensive nature demands integrating multiple sectors, stakeholder needs, points of view, objectives and contexts within a system. This creates both tradeoffs and collateral benefits in planning, policymaking and project application. Since resilience is progressing from concept and planning to execution in some parts of the U.S., emphasis grows on developing well-functioning governments and forward-thinking policy to support resilience application.[xxi]

What resilience trends are you seeing in your work?








[viii] 2016 and 2017 Independent work for the 100 Resilient Cities project as well as for the Kresge Foundation’s Climate Adaptation Field Review.



[xi] S&P Global Ratings Direct Updated Proposal for a Green Bond Evaluation


[xiii] See the tracking of global and US insured losses from natural hazard events by the Insurance Information Institute at: For the US, NOAA currently tracks the number of extreme climatic events and their losses; see:

[xiv] Griggs, G., Arvai, J., Cayan, D., DeConto, R., Fox, J., Fricker, H.A., Kopp, R.E., Tebaldi, C., Whiteman, E.A. 2017. Rising Seas in California: An Update on Sea-Level Rise Science. Oakland, CA: California Ocean Science Trust.


[xvi] See the Third US National Climate Assessment for the most recent comprehensive assessment of these types of impacts: The Fourth Assessment is currently underway.







A Year after Paris Climate Agreement: Is Business Adapting?

A year ago, I noted that business was making adaptation progress. What a pleasure to report, as COP22 in Marrakesh closes up, that they have been true to their word and deed:

PepsiCo has exceeded their water sustainability goal

Mars is investing in climate risk management

Southpole Carbon is driving thought leadership on climate smart adaptation

National Adaptation Forum: Leaving Me with More Questions Than Answers – and That’s Good

This post was written for the Urban Resilience to Extremes Partnership:  

As with the best exchanges of ideas in higher education, the bi-annual National Adaptation Forum of the adaptation minded left me with more questions than answers. Four days, 100 people and over 60 sessions held the potential to solve my adaptation conundrums and unveil fresh areas to investigate. Here are five of the most challenging and exciting ideas gleaned from the three-day forum:

Managed Retreat

Anne Siders – social scientist, lawyer building adaptive governance solutions for climate change and a Stanford University Ph.D. candidate – cited Federal Emergency Management Administration data showing that over the past 17 years, over 1,000 communities in 40 cities have experienced managed retreat. See here

Now, in a general sense, MR is the deliberate setting back of the existing line of defense to obtain engineering and/or environmental advantages. More specifically, MR is the deliberate moving landward of the existing line of sea defense to obtain engineering or environmental advantages. It often refers to moving roads and utilities landward in the face of shore retreat.

So, the puzzler: Why are we not considering managed retreat for (to pick one of hundreds of communities that are candidates) Hollywood, Calif.?

Mental trauma and climate change

Joe Hostler, an Environmental Protection Specialist with the Yurok Tribe Environmental Program in Northwest California, revealed the multigenerational trauma among salmon fishers from the collapse of the Chinook and Coho salmon fisheries along the Klamath River. It promises misery for four fishing tribes along the river. Already a suicide crisis has emerged among young men bereft because they can’t provide for their families. This, of course, indicates that climate change, a contributor to the lack of salmon, can trigger mental health issues. 

The puzzler: What preventive measures must our public health systems adopt to prevent further suicides and mental health-related challenges?

Public health and climate change

Related to the mental health challenge, climate change is impacting public health – whether it’s concern that tropical diseases such as malaria and dengue to, say, Europe or North America or the impact of vanishing salmon on the lives of fishing tribes. This piece offered by Emily York, Climate & Health Program Lead at Oregon Health Authority, explores how health-related adaptation messages can inspire action.

The puzzler: How can the adaptation field piggyback on the general acceptability of public health advancing adaptation principles?

Water Risks

Raj Rajan, Ph.D., Ecolab’s RD&E vice president and Global Sustainability technical leader, offered a way to monetize water risks. And Trucost, the London company that estimates the hidden costs of companies’ unsustainable use of natural resources, has worked with industry to derive it. See here.

The puzzler: If major financial market influencers such as Trucost (now a part of Standard & Poor’s) are embracing ways to put a dollar value on risks to water, how can we increase the uptake in measures beyond carbon reduction for, say, green bond evaluation?

Adaptation and Build

Designers have many ways to conceive of adaptation in buildings and three different ways were presented. They included architects Perkins+Will’s RELi, presented by Senior Associate and architect Doug Pierce; Arup engineering consultants’ Weathershift, presented by Associate Principal Cole Roberts, and the U.S. Green Building Council’s LEED resilience credits.

The puzzler: With these assets available, is it time to move to city ordinances to make resilient design required as standard?

I don’t intend to wait another two years for NAF 2019 to find answers to these questions. Through work with my clients, I have opportunities to work with practitioners and academics to create and encourage solutions.