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

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. 

The Next Era of Market Finance for Resilience

This post initially appeared on Meeting of the Minds

http://meetingoftheminds.org/next-era-market-finance-resilience-20167

Walking through my Midwestern neighborhood, I spy innovations that suggest we are up to the challenges that a changing climate triggers. I see storm sewers with “rain blockers” that delay rainwaters’ approach to them during and after big rains; “permeable alleys” that absorb water through pores in their concrete; and bioswales of plants and spongy soil that absorb water runoff from roofs and roads. And underground a mile or so away, deep tunnels take precipitation from heavy rains and snow melts to large distant reservoirs to prevent overflows of sewage and storm water.

It’s a cornucopia of innovation with the city as a lab. And it’s paid for with an equally creative mix of funds, from consent decree-induced storm water rate increases; legal settlements after utility failures; federal and agency grants and incentives; and philanthropic partnerships with nonprofit community organizations.

What will it cost?

As we enter an era of demands on cities sparked by climate change–induced shocks and stresses, ingenuity by cities is in high demand. Various estimates of adaptation/resiliency[1] funding needs exist. For instance, the United Nations Development Program projects that adaptation costs could range from $140 billion to $300 billion by 2030 – and between $280 billion and $500 billion by 2050 (source). In the U.S., the Union of Concerned Scientists, a source for cost estimates to remedy such risks, estimates that sea-level rises of 13-to-20 inches by 2100 would threaten privately insured coastal property valued at $4.7 trillion (source).

In addition, the Risky Business initiative notes that increases in temperature, heat waves and humidity will drive up demand for energy and require the equivalent of 200 new power plants nationwide that could cost up to $12 billion a year by 2100 (source). Plus, we already know how costly it can be to respond to climate change. Hurricane Sandy in 2012 cost New York $32 billion in damage and loss.[2] Earlier, thunderstorms, tornadoes and flooding in the summer of 2008 caused more than $18 billion in damage and 55 deaths nationwide, primarily in the Midwest.

Communities need funds to shore up their critical infrastructure assets, such as transportation infrastructure, wastewater treatment, telecommunications networks and electricity and gas supply. Funds are required for projects where resilience is a primary function to enhance a particular geography (e.g., a new sea wall) and to boost traditional mainstream projects’ resiliency attributes (e.g., elevating an existing bridge). Both primary function and resilience projects can bring big paybacks. Global reinsurer Zurich calculates that for every dollar spent on targeted flood-risk reduction measures, five dollars can be saved by avoiding and reducing losses.

Where will cities find the funding stream to support inventive resilience-related projects that strengthen the capacity of governments, communities, institutions and businesses to survive, adapt, and grow in the face of increased climate-driven shocks and stresses? Based both on my role in the Global Adaptation and Resilience Investment work group and on dozens of conversations with resiliency fund leaders, resilience initiatives, hazard mitigation experts and regional collaborations (primarily in support of the Regional Plan Association’s Regional Resilience project for the Fourth Regional Plan entitled “Establishing a Regional Resilience Trust Fund”), here are three elements to a fresh era of market finance.

Collateral Benefits

In many communities, those most at risk from climate impacts are poor or disenfranchised residents. Their greater risk can reflect such factors as lower insurance penetration, fewer savings, language-barriers, fewer funds to dedicate to maintenance, more unemployment, less access to information and more assets in lower-lying areas. When planners focus on improving infrastructure and social structures in more vulnerable communities, projects reap collateral benefits, known as “resilience dividends.” In these situations, a future disruption doesn’t become a disaster and shorter-term economic and social benefits are realized. The key lies in setting priorities for proposals that decrease economic vulnerability along with climate vulnerability.

For practitioners, three practical ways build these collateral benefits into projects:

• Include government officials, project developers and citizens in project planning to create engagement and literal and figurative buy-in.
• Promote breaking traditional departmental silos to identify funding that can be used collaboratively.
• Emphasize system benefits over project benefits to promote projects that have positive impacts across both the targeted and surrounding communities.

Benefit Cost Analysis

Many city leaders already have a long-term mindset. They plan for their city’s wellbeing 20, 30 and 50 years into the future. But they need to develop it in their financiers by modeling long-term benefits and costs through assessments that go beyond a normal benefit cost analysis and include elements of equity, land use, safety and stability. Typically, basic project BCAs evaluate direct financial benefits (e.g., project revenues or decreased operational costs) and direct byproducts (e.g., labor days, taxes from business transaction revenue, etc.) Resilience-oriented BCAs also calculate impacts that are avoided in the future as well as current benefits, such as outdoor community amenities, job creation for project maintenance, changes in property values, changes in public health, value of land-based amenities and positive and negative impacts on lower income or minority populations.

Several models for long-term benefit cost analysis are emerging:

• The International Financial Stability Board’s Task Force on Climate Related Financial Disclosures is finalizing a yearlong process to, among other things, create measures of climate risk.
• Standard and Poor’s system for “Evaluating the Environmental Impact of Projects Aimed at Adapting to Climate Change.”
• The National Disaster Resilience Competition, Department of Housing and Urban Development. (While this BCA is considered a good practice because it focuses on finance loss and return in terms of both future risks and future benefits and is a U.S. government source, its discount rate is likely too short for most projects because it doesn’t reflect the useful project life of 50-100 years).

Lessons from developing-country adaptation finance:

The largest sources of approved funding for adaptation projects globally are currently the Pilot Program for Climate Resilience (PPCR) of the World Bank’s Climate Investment Funds (CIF), the Least Developed Countries Fund (LDCF) administered by the Global Environmental Facility (GEF), the Special Climate Change Fund (SCCF) and the Adaptation Fund (AF). New funds are being established, including the $353 million Adaptation for Smallholder Agriculture Program (ASAP) under the International Fund for Agricultural Development (IFAD). The largest adaptation fund is expected to be the Green Climate Fund (GCF) at $1 billion/year by 2020, which will split its funding equally between mitigation and adaptation projects, with initial allocations starting in 2016.

There are existing market-finance groups. For instance, the P8 Group consists of 12 of the world’s leading pension funds collectively managing $3 trillion. P8’s aim is to create viable investment vehicles to simultaneously combat climate change and promote sustainable growth in developing countries. New entrants to the developing world adaptation finance marketplace include the Rockefeller Foundation/Asian Development Bank Urban Climate Change Resilience Partnership.

Just as development finance options do in emerging economies, in the US, in collaborations with market investors, cities can structure deals where they take the first loss position, with the mid debt taken up by a patient capital (such as pensions) and the senior debt by institutional investors.

Potential Sources of Finance

Both collaboration and long term BCAs should not only entice the finance community, they should make it more politically feasible to ensure that existing budgets and funds – such as general obligation bonds and rate-payer revenue – can be used for resilience projects. While cities often are wary of increasing their general obligation bonds, credit raters are rational actors and more of them are mindful of resilience. Simply consider Standard &Poor’s recent reports on the impact of climate risk on sovereigns and corporations. In any case, these features should make financing with any mechanism easier.

Here are some other funding mechanisms to consider[3]:

• Community Reinvestment Act (CRA) investments: Banks have shifted away from meeting their CRA goals with their general market share in low-value mortgages in the post-housing bust. The statute is flexible enough to allow investments for resilience that improve communities.
• EPA Supplemental Environmental Projects (SEP): Organizations (more than 600 across the country) such as utilities that are fined for violating various environmental statutes should finance resiliency solutions process across the states and territories.
• EPA Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF): for local and regional infrastructure agencies. 
• FEMA Hazard Mitigation Grant Program (HMGP): Funds for projects that mitigate future hazards after a president declares a disaster area can receive such monies.
• FEMA Disaster Deductible Program (DDP): A funding model under consideration by FEMA to promote risk-informed decision-making to build resilience and reduce the costs of future events. (N.B. open for public review until April, 2017)
• Green Banks: With tools such as green bonds and property assessed clean energy (PACE) programs, Green Banks are well placed to pivot to adaptation if their legislated authority enables the change.
• Green Bonds: Already funding resilience, Climate Bond Initiative (CBI) and others are working to introduce adaptation/resiliency components of all Green Bonds, and Standard & Poor’s has established a green bond rating system that includes resilience elements. 
• HUD Section 108 Loan Guarantees: HUD’S existing borrowing authority.
• HUD Community Development Block Grants (CDBG): Relatively flexible funding for community improvement that has a recent history of focus on resilience.
• Patient Capital: Investors with longer-term perspectives, such as pension funds, where the expectation of market return enjoys a longer timeframe.
• Philanthropy including existing funders Kresge Foundation and Rockefeller Foundation, and Climate Resilience Fund (CRF).
• Property Assessed Clean Energy (PACE): With reforms, it could become a Property Assessed Resiliency (PAR) program where debt and assets transferred with the property.
• Public-Private Partnerships (PPPs): PPP projects require long-term commitment and appropriate allocation of risk and, thus, are a fit for some adaptation projects.
• Social Impact Bonds: Investors with longer-term market returns who make payments when targeted social outcomes are achieved.
• Special Climate Change Fund (SCCF): Designed to finance and execute activities, programs and measures that relate to climate change in generally higher income countries.
• Taxes and Fees: Local governments can establish special resilience districts that assess taxes or fees. The California Earthquake Authority (CEA) is one model.

Conclusion

In today’s political climate, how can we pull this off? It is key to brand your resilience projects with a positive message (and offering solutions to a catastrophe). Your resilience projects promote safety, security and stability, and you can illuminate how they improve well-being of people, communities and property. Resilient infrastructure serves as a foundation less likely to crumble, flood, catch fire, be inundated, buckle or otherwise fail from the extremes of climate change. Herein lies a future that markets will depend on.

[1] In the most basic definitions, “adaptation” is when an entity evolves to address changing conditions, while “resiliency” is the ability to bounce back and become stronger in response to changes.

[2] Union of Concerned Scientists, Climate Change in the US, the Prohibitive Costs of Inaction The Star-Ledger New Jersey On-Line: “Cuomo: Sandy Cost NY, NYC $32b in Damage and Loss”

[3] Special Thanks to Nick Shufro with JulZach Resilience for collaborating to compile these resources.

Make Change through Hope not Fear

Sometimes, you chance upon a speaker whose message is so relevant, rich and rewarding that you feel the need to pass it on. So, let me tell you about Rebecca Henderson. She is the John and Natty McArthur University professor at Harvard with a joint appointment at its business school in the General Management and Strategy areas.  Rebecca explores how organizations respond to large-scale technological shifts, most recently in regard to the environment and energy. 

I met her in early April at a workshop at Harvard’s Zofnass Program for Sustainable Infrastructure, where I presented the business case for sustainable infrastructure. For her part, Rebecca gave participants a lightning-fast overview of her research about why change in corporations is hard.

Here are the highlights of how leaders generally respond to suggestions that their organizations become more sustainable. She cited four main responses – and they illuminate why organizational change is difficult.    

1.    Denial. It’s a leader’s first line of defense. Consider then-Microsoft CEO Steve Ballmer’s comment when first spying the Apple iPhone: “There’s no chance that the iPhone is going to get any significant market share. No chance.” 

2.    Interested, but dismissive. “I’m going to make any money.”

3.    Not equipped to take your advice. “I don’t have the resources to make the change now.”

4.    Overloaded. “The business is too busy to take up change now.”

Still, Rebecca thinks that change as grand as a sustainability transition can happen. Here’s how she explains it:

1.    Deal with denial. Change through hope, not fear. Rather than approaching an organization with the contention it “will go bankrupt if you don’t do this,” which invokes a disagreeable “threat rigidity,” make your case from the standpoint of hope. The key is to get people away from their official view of the future, which they may see as a linear extrapolation from where they’ve been. 

Conduct a real-time scenario analysis with key decision-makers, asking them, “What are the major uncertainties that keep us up at night.” Create a two-by-two matrix of possible scenarios (renewables expensive/renewables cheap; regulators move/regulators don’t move, etc.) Ask participants how they want to place their bets. Put probabilities around the matrix. They are likely to see that the official future they worry about has less than a 50-50 chance.

This helps them think systematically about the official world. While the matrix and probabilities don’t say the official future is wrong, it does suggest you probably cannot see the future if you are stuck thinking it will be like the past.

2.    Make Money: Trigger innovative thinking. Find someone in the organization who has something to win if you convince them to lead the sustainability drive.  If you find an organizational home and someone you can make a real success, it could help trigger innovative thinking and action. There’s still a lot of low-hanging fruit in the sustainability world because people have not been looking for it.

 If we can optimize systems in different ways, we can see the system differently to identify new properties. We are likely to find there is money to be made. The secret corporate weapon is this: the most powerful ways to do new things is to really want to do them. And normally what you really want is more money.  So, the key is to align and keep a ruthless focus on the bottom line as a reason why sustainability is important.

3.    Equip to lead by de-shaming. Most people are ashamed to talk about sustainability in public because so many decisions are made at the margins. The key is to use the incredibly powerful moments of talking about change over a beer. This will drive change. Indeed, every investment is loaded with judgement, so unofficial conversations can have a lot of impact.  

Rebecca believes that the demand for sustainability is so great that people who lead it “are going to make a lot of money and make a huge difference.” About the present time in the U.S., she posits that:

·      The private sector is good at supporting government change since innovation brings costs down and demonstrations help make change acceptable.

·      Businesses that act collectively (e.g., raising wages) through transparent collusion can bring about change beneficial to society.

·      Business is one of the most trusted institutions.

·      As soon as industry starts to cooperate and collaborate, they are reminded that a little government is really useful.  At that moment, she believes, “We will rediscover the power of well-run government.”

Equity, Climate and Corporations

Equity and the Private Sector

I’m working on a review of the U.S. adaptation field for a client – and a persistent theme keeps surfacing with the potential to change my work significantly. It’s the broken interface between equity and adaptation.  The project is raising my awareness about an issue my corporate clients seem to give little more than lip service to: the inequality of climate risk. 

Yet, I wonder if, perhaps, I just wasn’t hearing them properly. 

Of course, the development community speaks of the disproportionate risk from climate change confronting the world’s poorest people. I have written before about their plight. And the World Bank’s Turn Down the Heat: Confronting the New Normal report, persuasively surmises that climate change will erode progress made on reducing poverty. It is sobering that over the past 30 years, one dollar of every three spent on development has been lost as a result of climate risk,. according to USAID and the Rockefeller Foundation.

Academics have come to similar conclusions. A joint Stanford-Berkley study reveals that in a climate-changed world. global incomes could be 23 percent lower by 2100.

We know that the long-term impact of lower incomes relates to shrinking global markets and, thus, has an impact on economies and the corporate sector worldwide.

But do corporations care about inequity?  It’s a critical question since one of the key findings of this year’s World Economic Forum Global Risks Report, based on a global risk perception survey of over 1000 ‘educated elite,” is that inequality and “polarization” now rank among the top three as interconnected underlying trends influencing global risks.

I missed this finding while focusing on another pervasive trend – the importance of environmental risk – that the report demonstrates more clearly than ever. The report assesses 30 separate global risks divided into five categories: economic (blue), environmental (green), geopolitical, societal and technological. The pattern I detect is that economic risk impacts dominated earlier this century before environment risk impacts took its place more recently.

WEF’s Risk trends interconnections map illuminates that rising inequality has become the most important driver of global risks. “And the most important pairing of interconnected risks was that of unemployment and social instability,” It noted.

I put the question about corporations’ degree of care about inequality to a plenary of private sector leaders at ResCon recently and got a wide variety of responses. They ranged from “a rising tide lifts all boats” and “since the election, I’ve called a few meetings to discuss how we are helping or hurting social inequity” to “inequity is the largest challenge that cities face.”

WEF concludes that we need to “boost growth but also reform market capitalism to help to mend the increasingly pronounced fractures that can be seen in many societies.” 

Reforming market capitalism is a bold statement – more apropos of a grassroots group – but, personally, I certainly am glad to have WEF on the case and eager to continue to pursue equity actions with my clients.

Yes, the weather has been weird. Yes, there's something we can do about it.

This post originally appeared on Crain's Chicago Business on 20 March 2017: http://www.chicagobusiness.com/article/20170320/OPINION/170329989/weird-midwestern-weather-and-local-responsibility

In the midst of what was a historic snow drought—a dry spell that quickly ended last week—business and climate leaders gathered to drill down on the impacts felt in the Midwest from a changing climate.

At the National Climate Assessment session earlier this month, climate scientists reiterated predictions that indicate the Midwest could, by the end of the century, experience 45 to 85 days over 95 degrees Fahrenheit—a change that would increase heat-related deaths per year tenfold. Another prediction suggested that, by 2040, Midwesterners could see 20 percent more precipitation events in spring and experience 10 percent fewer in summer.

At the three-day Climate Leadership Conference, also in Chicago in early March, participants reaffirmed the need for a clear link between private-sector leadership and climate action. While there is no shortage of money for climate investment, there is a need for better visibility for private investment opportunities and better risk disclosures.

What we heard from both groups was a call for private and public leaders to continue to talk about—and invest in—local solutions.

Even as the Trump administration proposes to cut the U.S. Environmental Protection Agency's budget by 30 percent, there are other viable options for the federal government to take action. President Trump confirmed his interest in a National Infrastructure Bank in his address before Congress. This could serve as one clearly visible avenue for the private sector to engage in infrastructure investment. In that regard, the administration should consider three objectives:

1. Accelerate funds for resilient infrastructure projects by the National Infrastructure Bank, focusing especially on infrastructure modernization and rehabilitation that increases the safety and security of existing infrastructure while creating jobs.

2. Increase private-sector engagement in infrastructure redevelopment by considering a corporate tax code change that would provide a community infrastructure revitalization credit to promote public infrastructure upgrades and develop or redevelop real estate served by the infrastructure.

3. Consider carefully the National Flood Improvement Program, which is $23 billion in debt and must be reauthorized by Sept. 30. To ensure a fiscally solvent program of flood insurance for homeowners and businesses and to help community actions to reduce flood losses, the program could increase transparency and provide better risk information; address rates and ensure affordability; and encourage individuals and communities to mitigate flood risks.

Local solutions are still called for in this uncertain time from Washington. So let us re-examine our risks from a changing climate across the complex intersections of the built, natural and social systems of our society: supply chains, job centers, residential and commercial buildings, real estate developments, utilities, sewer and stormwater pipes, transportation networks, flood-prone and disinvested communities, public green spaces and vacant brownfields.

If planning and investment decisions in these areas are being made, for example, under the assumption that flood risks in the future will be identical to flood risk in the past, that is simply flawed logic.

Take part in this conversation. Ask yourself and your colleagues: What are the climate risks in my portfolio today and tomorrow? How does the private sector engage in mitigation and adaptation actions? How else can Chicago proactively address climate changes? Local actors need to find ways to ask tough questions and make the right investments.

Sarah Cardona is an associate at the Metropolitan Planning Council. Previously, she worked for the World Bank in Washington, D.C., in climate-resilient, low-emissions development. Joyce Coffee is president of Climate Resilience Consulting and the former managing director of the Global Adaptation Initiative at the University of Notre Dame.

As Feds Devalue Science, It’s Time To Take It to the City

This post initially appeared in Triple Pundit: http://www.triplepundit.com/2017/03/science-and-the-city/

A pivotal conversation in Chicago galvanized my career in adaptation.  A group of scientists from Washington, D.C., were visiting as part of a roadshow preceding the rewrite of the National Climate Assessment. After an hour of posturing and talking at us, they asked if there were questions.

I couldn’t help myself.  I gave them a verbal licking for assuming that we practitioners knew nothing of science – or anything really.  It shushed the room and opened the door to many excellent speaking engagements, where I often was the token practitioner on a panel of scientists.

During one such panel session, after a climate scientist wowed a room of Doctors Without Borders physicians by describing changes expected from extreme heat, vector-borne disease and extreme weather events, the first question to the scientist was: “What should we do about these risks?” The scientist responded, “I don’t know.  I make science.  You guys are the ones with the solutions.”

What?

Perhaps in this era when science seems so devalued at the federal level, we possess an exceptional opportunity to bring science to cities.  Indeed, many cities wish they had the bandwidth to increase the evaluation of evidence to shore up their decisions.

Not all scientists are averse to digging into local issues and suggesting solutions.  When I led implementation of the Chicago Climate Action Plan, I benefited from two incredible science rock stars who prepared the city’s climate risk assessment: Katherine Hayhoe and Don Wuebbles. And, of course, the New York City Panel on Climate Change is a respected and relatively well-known local scientific engagement.

So, if you’re frustrated that U.S. Environmental Protection Agency regulations might be rolled back, recognize that local government can be a way to control private-sector environmental harms. If you’re worried that federal data and tools have been removed from the public domain, take your data and tools to a city’s public domain. If you’re unsure how you can make an impact on the world without the federal government’s support, consider all that cities have done and have the power to do.

While scientists and their supporters rearrange their packed schedules to participate in the March for Science later this spring “to support and safeguard the scientific community,” I encourage you to look up your mayor’s office and make an appointment for a chat. And I do mean your mayor. It doesn’t have to be Chicago Mayor Rahm Emmanuel or any big-city chief executive. What about the mayor of your mom’s town?  You could return as the prodigal son or daughter.

When you secure a meeting, prepare a three-sentence overview of what you do. Not a book or even a short bio. After brief introductions, start the meeting with such questions as:

• What sort of science do you need?
• What department heads are using science in their work right now?
• How can a scientist be helpful to your work?
• What innovation are you most proud of?
• What most needs work?

Then listen. If in this first conversation you talk 15 percent of the time and listen the other 85 percent, you have succeeded.

And please don’t follow up with half a dozen peer-reviewed articles that raise complex questions and end with complex questions in tiny print. That just reminds your city friends of the gulf between your research and their practice.

Instead, suggest ways to reframe their questions, offer ideas for solutions from the literature, put them in touch with knowledgeable scientific colleagues, and create your own “support and safeguards for the scientific community” — in your actual community.

Now, proceed, scientists, to make some science in the city. You might find it invigorating.

Image credit: Pexels

Joyce Coffee, LEED AP, is president of Climate Resilience Consulting, https://www.climateresilienceconsulting.com/, working with leaders to create strategies that protect and enhance markets and livelihoods through adaptation to climate change. She also collaborates with scientists at Arizona State University on the Urban Resilience to Extremes Strategic Research Network. Previously, she worked with the University of Notre Dame Environmental Change Initiatives’ “Science Serving Society” as managing director of the Global Adaptation Initiative.  Earlier in her career, she led implementation of the Chicago Climate Action Plan @joycecoffee.

Adaptation Veteran Joyce Coffee Shares Strategic Insights

Check out this Climate Change Business Journal Interview that is part of their 2016 Executive Review and includes thoughts on the frontier for corporate adaptation and inspiration for adaptation progress. 

Moonshot Musings

We at Climate Resilience Consulting asked our network for their climate resilience moonshot – their ambitious idea and grand vision for achieving a resilient future as the Apollo program did in landing the first astronaut on the moon. The responses were inspiring for our future. I share several here to fuel your imagination and forge your impactful idea.   

From a research scientist based in North America with expertise in adaptation measurement:

Change the method for assessing investment time frames to correspond to the lifetime of the project’s impact. Integrated coastal zone management, water management, flood management and forest management project impacts may be even longer than the end of this century. Many of these projects impact markets. Yet most investment decisions are annual at best.

From a member of the UNFCCC Adaptation Committee based in Europe:

When we think of adaptation, we often focus on big events and focus on a time horizon of a decade or two. For instance, most National Adaptation Plans have a time horizon of 2030. We should look even further into the future for the many relevant slow onset climate change events – including sea level rise, loss of snow cover, loss of permafrost, loss of glaciers, desertification and ocean acidification – that have significant impacts in the long term and need to be addressed now to keep the challenges manageable.

From a City sustainability director in North America:

Use a gas tax for a federal, state or city revolving fund for resilience.  This would be a way to generate revenue, creating a pool of capital to fund “unbankable” resilience.

From a community leader bridging between people in vulnerable communities and local government in North America: 

Create a Property Assessed Clean Energy (PACE) mechanism, Property Assessed Resilience (PAR).  Like PACE, PAR financing would stay with the building upon sale and could be shared with tenants. State and local governments could sponsor PAR financing to create jobs, promote economic development, and protect the environment through projects related to flood, heat and fire mitigation.

From a water conservation leader in North America: 

Create a Work Projects Administration-type jobs program, similar to the Depression-era program that kickstarted jobs, to address the millions of acres that need to be re-treed in the American West.  Along with increasing water security and decreasing fire risk, jobs would include dead tree removal, biomass technology creation and new tree planning.

What is your moonshot?

New Year’s Solution: Putting adaptation out of business

 My business started with an intention I set 10 years ago to gain enough knowledge, experience, moxie and network to establish a climate adaptation firm. It reminds me of the power of the self-help genre that tells us to write down our goals, create vision boards, and send our big ideas out into the universe.

So in the month of New Year’s resolutions, here’s the next big goal I’m setting for myself: In the next 10 years, put the adaptation business out of business.

My vision is this: every housing, health, water, food, transportation, energy, communications and economic development decision we make anticipates a climate-changed future.

Adaptation needs to be a part of the routine!  And, like the green building movement it needs to be not only acceptable, but expected, that every professional that makes decisions that impact our future (that’s all of us) thinks adaptation first. 

Right now, Adaptation is a movement, it’s a special attribute. It’s embraced by a minority. 

But in 10 years, we’ll define success as adaptation being intrinsic, not unique.

And with that, all of our new year’s resolutions will be easier to achieve:

We’ll be healthier

We’ll drink more and cleaner water

We’ll have more outdoor areas to exercise

We’ll put our families first

We’ll take more calculated risks

We’ll have a better quality of life…

And we’ll have a lot more reasons so smile more!

Happy New Year!

Chicago: Taking Tips from the Screwworm

This blog originally appeared on Triple Pundit.  See here. 

Given the typical irreverence of Chicago Mayor Rahm Emanuel, I’m pondering something I think he might like to know: He could be the Screwworm Mayor.

Some of you may know that the lowly screwworm threatened Southwestern cattle in the 20th century, decimating Texas ranchers’ livestock with the wasting disease it triggered.  The tenacity of those hard-scrabble ranchers in the Southwest Cattleman’s Association eradicated this invasive pest by introducing of millions of screwworm flies sterilized by radioactivity. (You with me, Rahm.) The Association contends that this was the most beneficial 20th-century program to livestock producers than any other.*

As science and policy swirls around the introduction of sterile male mosquitoes to help eliminate the global scourge of malaria in some regions, Chicago has its local version.  Here’s our story: In 1986, the mosquito Aedes albopictus – also known as the Asian tiger mosquito – arrived by way of standing water in used tires (which had come full circle from stripped rubber rings in the U.S., then via ship to Asia to be retread and home again) and bamboo.

The mosquito survived in Chicago, despite being well outside its native range, because of the urban heat island effect that increases the temperature of urban areas with lots of black, heat-trapping surfaces. (Think: tar paper roofs and asphalt roads and parking lots.)  In the meantime, while shipping rules for tires and bambooprevented the introduction of more of these pests, every year (10 generations in a mosquito’s life) some live on in Chicagoland, contributing to our mosquito population. As the climate changes, the range for this mosquito will move north.

What if Chicago established a Midwest Mosquito Infertility Association, introducing sterile males specifically for this invasive pest, thus halting that progression?

While mosquito fertility is a topic of much debate, the unique situation of Tigris mosquitos in Chicago gives us a chance to control this experiment and address two of the biggest issues in that debate: One, the population affected isn’t over an entire continent or state (making it harder to eradicate, given the scale of effort), and two, the population is not native to the area (thereby, the web of life does not depend on its existence to keep itself in balance).

Let’s give those tiger mosquitos a wrangle!

*Update:  Those sterile males may need to be called back into service.  The Washington Post reported this fall:  Screwworm outbreak in Florida deer marks first U.S. invasion of the parasite in 30 years.

What the U.S. Can Learn from the U.K. About Climate Risk

As the United States welcomes a new presidential administration, and the District of Columbia becomes what I refer to as the “Red Fed,” I find myself examining U.S. regulations and policies seeking business-friendly opportunities for revamped regulation.

I have studied the European Union’s Water Framework Directive that requires compliance by EU ascension states, and it promises exciting prospects for helping Eastern Europe’s emerging economies prioritize water efficiency as their development quickens. I also perused France’s new law under Article 173 of its “energy transition for green growth” regulation, which requires investors to report on how climate change considerations are incorporated into their portfolios.

Both hold promise as excellent examples for the U.S. In particular, I will be watching the application of Article 173 with interest.

In the meantime, the most intriguing regulation to me is the United Kingdom’s Adaptation Reporting Power (ARP). It sprang from country’s Climate Change Act of 2008, and the subsequent National Adaptation Program in 2013 reinforced it.

The ARP enables the U.K. government to require organizations (known as “reporting authorities”) that provide public services to prepare climate change adaptation reports detailing how they assess and act on the risks and opportunities from climate change. Therefore, it provides an opportunity to gather evidence on climate risk, organizational capacity and activities to build resilience.

Interestingly, early evaluations of the law note: “The ARP was a catalyst for many organizations to begin formally considering their climate change risks and adaptation responses, including at the Board and Management levels” (see the Government Report for the Adaptation Reporting Power).

Having been involved with creating laws when I worked for the city of Chicago and helped promulgate air, stormwater and invasive species ordinances, I remain a super fan of performance-based regulation versus prescriptive law.  I believe it is the lack of a prescription that galvanizes conversations at senior levels. If the law had mandated what industry must do, a smart functionary within the company would have complied.  Without that parenting, the functionary creates a variety of crazy ideas across company verticals discussed in the C-suite. How exciting!

In the case of ARP, the U.K. government has categorized its adaptation activity into seven “themes.” Among them: agriculture, forestry, water, energy and transportation infrastructure, for which industry leaders are asked to report.

In a first tranche or ARP rollout, reporting was mandatory for the identified corporations.  It now is voluntary.  While the report’s form is dictated by statutory guidance (and, smartly, includes sections related to the company’s assessed risk and opportunities from climate change and a related action plan in an Adaptation Report), the specifics of what and how industry must respond is left to the market.  This inspires healthy competition to derive solutions that mitigate more risk and seize more opportunity.

Early results of ARP, detailed in the government report Adapting to Climate Change: Ensuring Progress in Key Sectors 2013 Strategy for exercising the Adaptation Reporting Power, suggest it is helping to developing capacity to understand climate risk issues in key infrastructure sectors. Notably, it also helped the U.K. government identify specific areas of research opportunity to share with the scientific community.

The government will review the law every five years, primarily to ensure that the voluntary reporting protocol is producing results and a shift to mandatory reporting is not required.

As the U.S. transitions to a new era of federal governance, the U.K. ARP should top our list for the infrastructure and agricultural agendas.

This post originally appeared on Triple Pundit.

How Health, Climate Change, and Social Justice Intersect in Chicago

By Joyce Coffee and Elena Grossman

Before Lin-Manuel Miranda’s fame exploded with “Hamilton,” he composed and won a Tony for “In the Heights,” in which the song “Black Out” is performed to end Act 1. The song is about the power going out during a heat wave in an immigrant community in Queens, New York, and the chaos that ensues.

In it, the lyrics “we are powerless” are sung by the community to mean more than just being without electricity. It also sums up how many people feel about their ability to withstand the stress and strain of extreme weather.

Last month, hundreds of leaders from around the world wrapped up the annual conference of the parties about climate change, COP22, held in Marrakesh, Morocco.  They pledged to press ahead with implementation of the Paris Agreement to decrease greenhouse gas emissions and adapt to climate change.  But you need not travel far to see what the impacts of a future change in climate could mean.

In fact, Chicago offers a great case to illuminate the inequity of weather impacts on low-income neighborhoods and communities of color -– an injustice that will only intensify as the climate shifts to more heat and more floods in the region.

The ultimate illustration is a tragedy that Chicago is known for around the world: more than 700 deaths from the 1995 heat wave.  The majority of those who lost their lives were African American, and nearly all lived in communities considered below the poverty line.

But climate change isn’t just about hotter days, heat-related illnesses and deaths.  As temperatures rise, they trigger and exacerbate other health issues, such as asthma. Again, available data show the clear disparities of asthma rates among children in poorer Chicago neighborhoods.

The other impending climate impact is more precipitation — which, here in Chicago, always poses the threat of flooding.  Mold growth in flooded homes can trigger asthma attacks and allergies, and dealing with a flooded home can cause psychological, emotional and financial stress.

“Water in Basement, WIB” is the lingo for a flooded basement from storm and sewer water backups during extreme precipitation events. WIB complaints are overall higher in poorer Chicago regions. A more updated map of approved claims from private insurance, the National Flood Insurance Program, FEMA, and the Small Business Administration (SBA) Disaster Relief highlights the same neighborhoods being heavily affected by urban flooding.

Direct causation can’t be concluded here because WIB complaints are reported to the city, and many homeowners are reluctant to report flooded basements because they fear it will reduce their property value.

Leaders who gathered in Marrakesh spent two weeks talking about how impoverished communities around the world face a disproportionately higher risk to the physical and health impacts of climate change.  This includes the disadvantaged communities in Chicago. The same communities of color and communities with high rates of poverty who face climate impacts today are many of the same with high heat-related deaths in 1995, asthma prevalence, number of asthma-related emergency department visits, and number of flooded basements and flood-related insurance claims.

This underscores the need to demand and allocate more resources to communities that face mounting risks of the extreme heat, worsening air quality, and flooding that climate change will bring.  We need to work together to ensure an equitable reduction of climate change vulnerability in Chicago.

Co-authored by Joyce Coffee, President, Climate Resilience Consulting and Elena Grossman, MPH, BRACE-Illinois Project Manager, University of Illinois at Chicago, School of Public Health.

This article originally appeared on Triple Pundit

Vanguard Adaptation Leader: U.S. Department of Defense

The community of adaptation leaders should, indeed must, bolster its essential link with the national security apparatus.  Three reports suggest why:

1.     The Department of Defense has created a Roadmap (2014) with an objective to collaborate with stakeholders, including the adaptation community. Specifically, it says it seeks to promote deliberate collaboration with stakeholders across the Department and with other Federal, State, local, tribal and international agencies and oorganizations in addressing climate change considerations.

The report maintains that climate change “is a long-term trend, but with wise planning and risk mitigation now, we can reduce adverse impacts downrange.”  The authors’ use of the term “downrange” is important. While it’s not necessarily the future, it’s a target that may be farther away and, therefore, requires careful preparation to nail. 

The report concludes: “By taking a proactive, flexible approach to assessment, analysis, and adaptation, the Defense Department will keep pace with a changing climate, minimize its impacts on our missions, and continue to protect our national security.”

2.     In 2015, the DOD released another report on the national implications of climate change that notes the need to adapt military facilities – many located along the coasts and/or in arid environments – and to develop adaptation strategies to diffuse risks in developing countries.

3.     The White House in September released a Statement and a National Security document about integrating climate change into national security. But, in a missed opportunity, the documents do not mention adaptation.

As panel submission deadlines loom for the biannual National Adaptation Forum, I hope its steering committee has invited the DOD to speak at the May 2017 forum.  The Defense Department is at the frontline in its adaptation leadership. We should try to leapfrog one another, helping to inform adaptation strategies for communities of stakeholders and to enhance research to action.

Stranded Assets: Preventing the Next Era of Climate Change

I first heard the term “stranded assets” at a Bloomberg event in New York City during Climate Week 2014.  For me, the term conjured up images of homeowners and their dogs waiting atop roofs to be rescued during Hurricane Katrina.  Yet that didn’t seem right for the context of the discussion, and a quick Google search set me straight: They were talking about coal-fired power plants that would be worth nada on Wall Street should a carbon tax change the market.  (That was almost two years before Peabody Coal went bankrupt.)

Two years later at Climate Week NYC 2016’s Sustainable Investment Forum, stranded assets still seems to mean the same thing to investors – coal – and they mull it increasingly. The industry understands the term as holdings that need to be written down before the end of their expected life span. 

But BlackRock is an early leader in unveiling it's future meaning. Read more here at my oped published in Triple Pundit:

http://www.triplepundit.com/2016/10/stranded-assets-preventing-next-era-climate-change/

Financing Projects that Address the Physical Risks from Climate Change

I asked the Intentional Endowment Forum, run by a former boss of mine Dr. Tony Cortese, if they were aware of adaptation finance, that is, finance that addresses the physical risks of climate change.

I thought the response from Dr. Maximilian Horster a Partner at south pole group focused on the financial industry was particularly succinct, recapping what those of us in the adaptation finance investigation space are discovering. 

He writes:

“Currently, the investor focus is indeed mostly on transition risk: legislation, regulation, behavioral change, carbon pricing etc and the subsequent effects of asset stranding potential, energy transition and the like. Keep in mind that also here, we only see the beginning of actual stress tests among a – still small – group of investors and for only a few asset classes. Although the uptake is increasing rapidly, we are far from having established consistent standards, benchmarks or best practices.

For physical risks, we are even further away from an investor understanding. Often, data availability on physical climate risk is cited as the big hurdle but that is only half the story: Data on the likelihood of climate related extreme weather events (flooding, droughts etc) exist for most geographies and is used by insurance companies to price liabilities. However, it is not yet utilized for asset management, not even by that very same insurance firms that produce this data.  

What is missing is a mapping of these physical risks to the actual assets (such as production facilities), but also supply chain locations and end markets. We are developing this right now, but interestingly, investor interest is much less than one would think. Main reason is that - according to climate science - the full swing of physical risks are still 15-20 years away and therefore beyond most investors’ investment horizon (“tragedy of the horizons”).

Because of this, we see very few investments into climate change adaptation by mainstream investors. The exceptions are of course the multi-lateral funds under the UNFCCC and other outfits that have a strong focus on climate change adaptation, mainly for rural population and agriculture in developing countries since some time:http://www.climatefundsupdate.org/themes/adaptation.”

Laurels for Credit Rating Agencies:Levers of Change in the Climate Adaptation Market

The voices and actions of the financial industry are critical to change capital market policy and practice change. That’s why I’m thrilled credit rating agencies are seizing their role as levers of change in the adaptation market. Consider these three examples of their newfound interest:

1. Standard & Poor’s explicitly weighs adaptation in its new Proposed Green Bond evaluation tool.

2. S&P proposes an Environmental Social and Governance risk exposure assessment.

3. In its proposed ESG assessment tool, S&P acknowledges the differences in the time horizon of risk. 

Read my oped published in Triple Pundit for more insights: http://www.triplepundit.com/2016/10/laurels-credit-raters-levers-change-climate-adaptation-market/

Finding Cash in the Couch Cushions for Climate Adaptation

I’m immersed in a fascinating variety of projects for the Rockefeller Foundation and Regional Plan Association and all include a similar question about how to finance urban resilience. That got me wondering: What well-known financing solutions could help us to finance more adaptation today?

Here are seven:

1. Climate Reinvestment Act: In the post-housing bust period, Community Reinvestment Act funds have shifted to financing schools and the like from funding low-income housing. This has been a shift for banks that used to achieve their CRA goals within their general market share in low-value mortgages. So, what if banks to meet the credit needs of the communities where they operate used CRA investments for resilience that improved communities, such as green infrastructure to absorb stormwater and prevent flooding? Or how about LaSalle Bank, which a decade ago paid for tree planting along the Chicago marathon route counter urban heat island and runner’s heat stress.

2. General Obligation Bonds:  Cities are reluctant to assume more debt, worried especially about damaging their credit ratings. Yet, deferred maintenance, presumably triggered partly by insufficient bonds to pay for infrastructure improvements, means that much of the country’s infrastructure earns a dismal grade of D+ from the Society of Civil Engineers. Credit raters, though, are rational actors and more of them are mindful of resilience – vis-a-vis Standard &Poor’s recent reports on the impact of climate risk on sovereigns and corporations – and it’s a great time to borrow with interest rates low and investors seeking to diversify from stocks in a bull market. 

3. Green Banks: In the last decade, a healthy proliferation of Green Banks – public or quasi-public financing institutions that provide low-cost, long-term financing support to clean, low-carbon projects – has erupted worldwide. In the United States, their charters drawn up by state legislatures, all speak to energy efficiency and renewable energy sources. This made sense 10 years ago when investors needed to grasp climate resilience. But today, adaptation is where the discussion of efficient clean energy was back then – a murky area with few examples and fewer investors.

4 & 5: With tools such as green bonds and property assessed clean energy (PACE) programs, Green Banks are well placed to pivot to adaptation. It opens opportunities for green bonds that fund resilience and property-assessed resilience loans that travel with a property’s mortgage.

6. Infrastructure Bank: Hillary Clinton’s infrastructure plan proposes an infrastructure bank and promises that federal infrastructure investments would be resilient to both current and future climate risks.  Ensuring that federal funds for infrastructure go only to climate-resilient projects is a smart idea. Any taxpayer dollars for our roads, rail and water infrastructure should not be misspent on old-fashioned pre-climate change designs. Resilient infrastructure is a foundation that will not crumble, flood, catch fire, buckle or otherwise fail us due to the extremes of climate change.

7. Tourist Fees:  After 9/11, the U.S. instituted a $10 airline security fee for each round-trip ticket. In cities with very big resilience bills and big visitor populations such as New York, Miami, and Los Angeles, a resilience fee could help pay for a much more pleasant stay. 

What are your ideas for financing resilience?  Let us know! 

Financing Adaptation: The White House and The Global Adaptation & Resilience Work Group Exchange Ideas

At a White House roundtable on resilience investment with the Global Adaptation and Resilience work group and the Council on Environmental Quality last month, experts from government and the financial sector debated what the financial products are that will help people plan for the long term.

An optimistic bunch, there was general consensus that incentives are lining up – climate adaptation is smart business.

But do finance and policy advisors have the information they need to make decisions in the long-term interests of their shareholders and the public?

Three key questions emerged from the conversation, along with several sub issues: 

First, are there maps of climate risk to analyze, adaptation tools that resolve climate risk, and a known set of adaptation projects to use as best practice and to seed the resilience investment pipeline? Several insurance leaders noted that there are existing vectors of risk that the industry uses that are helpful for pricing climate risk. 

At the same time, part of making the environment for investment stable is having a clear awareness of the measure of progress the investment will cause. An initial step is to “weatherize data” showing what the impact of weather is on parts of the economy.  With these short term impacts explained, then it is important to build measurement models to extrapolate into the future.  The customization of predictive risk data is the next frontier in adaptation investments. 

These tools will be most useful when delivered along with narratives about best practice.  Several finance-industry adaptation project examples were shared, including a Nature Conservancy project that is allowing the Government of the Seychelles to swap some of its debt for climate adaptation projects and a Swiss Re project offering small holder crop insurance against drought and floods in Ethiopia.

Second, should the investment industry be focused just on increasing resilient investments – that is investments focused on adaptation projects – or should they also care about increasing the resilience of projects, that is the multi-trillion dollars of investments funded globally?  The focus of these investment leaders was generally on the latter.

Especially since insurance experts use a back-of-the-envelope calculation that basic productivity for a business needs to be restored within 2 weeks (as long as a typical business can stay afloat with no revenue) and full productivity in three months (which is tied to a timeline of when insurance pays for unrecoverable losses), it seems the resilience of all projects is imperative for the markets.  Understanding the local context of the physical changes caused by climate change for market sectors is complex, and private sector leaders are focused not just on the physical risks from climate changes, but also the social risks to their workforce and markets. These human factors are often related not just to the company, but also the communities within which they do business.  Thus, resilience is today’s problem of the commons. Of course, another major insurance issue is that only about 30% of extreme risk loss is insured around the world. 

Third, what is the roles for the US Government in increasing the finance industry’s engagement with resilience?  While it was acknowledged that resilience is generally a shareholder issue, (vs. national security which is a government issue), and the private sector owns and operate a significant majority of infrastructure in the world, it was agreed there is a significant role for government. For instance, participants recommended that climate science risk be baked into codes and standards to motivate the private sector, since the general rule of thumb is that one dollar spent in risk mitigation saves four dollars in the future on recovery.

But the major issue is that the US government is the insurer of last resort, based on the Stafford Act, allowing developers to operate with the knowledge that if you invest now without paying any premium for future risk mitigation, the federal government (in the form of FEMA, the Federal Emergency Management Agency) will ultimately pay for damages incurred that are beyond the capacity of the private insurance market. Repealing the Stafford Act would transform the industry’s viewpoint on climate risk. 

Another recommendation for the government was to promulgate and enforce disclosure requirements for both acute and chronic types of risks.  Tax incentives or rebates could help ensure compliance with a Securities and Exchange Commission asset level climate risk disclosure.  Ultimately, the group agreed that the private sector takes on risks that it wants to take on, designing, building and repairing – all crucial to resilience.  But the private sector is not going to choose to invest in  what they cannot control - regulatory change. 

This is a crucial role for the US Government. Finance leaders will always innovate to get the most out of the market, and policy leaders can help make sure these decisions are in the long-term interests of the public with regulatory innovation.