December 3, 2020 – Four Twenty Seven Report. More frequent and severe extreme events driven by climate change pose a significant threat to nations around the world and understanding who and what is exposed to climate hazards is essential to pricing this risk and preparing for its impacts. This new report and underlying analytics assess sovereign exposure to floods, heat stress, hurricanes and typhoons, sea level rise, wildfires, and water stress based on the only known global dataset matching physical climate risk exposure to locations of population, GDP (Purchasing Power Parity) and agricultural areas within countries.
Globally, increasingly severe climate conditions impose growing pressure on populations and economies. The implications on economic growth, welfare, production, labor, and productivity are large, with potential material impacts on sovereign credit risk. However, assessing sovereign climate risk presents significant challenges. While most approaches to quantifying future climate risk exposure for sovereigns measure the average exposure over the entire territory of a country, this doesn’t capture whether the populated or economically productive areas are exposed to extremes. Likewise, averages of exposures to several climate hazards can mask extreme exposure to a particular hazard in a certain area of a country.
We’ve mapped the co-occurrence of hazards and exposures, explicitly factoring in the spatial heterogeneity of both climate hazards and people and economic activities across a country. This new report, Measuring What Matters – A New Approach to Assessing Sovereign Climate Risk, provides an analysis of the data. We find that all nations face meaningful risks despite their variation in size and resources. Explore sovereign climate risk in the interactive map below, based on both total and percent of a nation’s population, GDP (PPP) and agricultural areas exposed to climate hazards in 2040.
*Erratum: In Table 1 of a previous version of this report the “Agriculture Area at High Risk” column was said to be in units of 1 billion hectares. However, it is in units of 100 million hectares.
Black communities and other people of color are disproportionately exposed to the impacts of climate change and also tend to have fewer financial and healthcare resources to prepare for and respond to these impacts. Adapting to climate change without an explicit focus on racial justice can further reinforce inequalities; hence, building systemic resilience to climate change must include investment in communities that are on the frontlines of climate impacts, including Black communities.
For the Local and Regional Government Alliance on Race & Equity, “racial equity means that race can’t be used to predict success, and we have successful systems and structure that work for all.” Equity means that different groups are provided with the resources they need to address their distinct challenges, acknowledging that these will not necessarily be equal. Thus, adaptation must include equity in every step of the process, from risk assessment and decision-making to planning, implementation, monitoring and evaluation. Key elements of equitable adaptation include conducting vulnerability assessments that account for place-based vulnerabilities, integrating consideration of social and cultural value within budgeting decisions, involving frontline communities in the decision-making from the start, and investing in the resources and policies these communities need to thrive. While by no means exhaustive, this article highlights the importance of racial equity for several phases in the climate adaptation process and shares some emerging best practices.
Risk and Vulnerability Assessment
The first step in the climate adaptation process is identifying risk exposure and vulnerability. Climate risk is not based solely on exposure to climate hazards like floods and extreme heat, but also on vulnerability, driven by a community’s specific characteristics. Vulnerability is shaped by the sensitivity of a given population and its adaptive capacity. Thus, the impact of a climate hazard, such as a storm or drought, will depend upon the resources and sensitivities of exposed communities.
Adaptive capacity is multifaceted, including both tangible resources such as access to transportation, air conditioning and green spaces and intangible elements such as social capital. Effective risk and vulnerability assessments explore these characteristics of a community, to identify how risks may manifest, and serve as the foundation for determining what adaptation measures are needed. For example, members of low-income communities with low vehicle ownership and greater dependence on public transportation will be less likely to be able to evacuate during an extreme event, experience longer-term impacts if subway stations are flooded or damaged, and be more likely to face economic hardship if they cannot get to work or lose their jobs. For extreme heat, communities with more urban green spaces, widespread access to air conditioning, or access to public cooling centers such as libraries, are likely to be less vulnerable than communities in dense urban centers with little greenery and/or those without access to safe public cooling centers.
Social capital is built through regular interaction, shared values or culture, and human connections, which build trust and lead individuals to look out for one another. In some cases, high social capital has increased communities’ resilience, helping to counterbalance a lack of tangible resources. For example, during Chicago’s deadly 1995 heat wave, while Black communities were hit hardest, the Black community of Auburn Gresham stood out with lower death rates than Chicago’s most affluent neighborhoods. The distinguishing factor was the way Auburn Gresham’s infrastructure was conducive to building social capital—its sidewalks and restaurants promoted opportunities to get to know each other and interact. Assessing the social elements of adaptive capacity in climate vulnerability assessments is critical to understanding a community’s needs and ensuring that adaptation efforts build on and leverage existing social capital.
Sensitivity refers to the characteristics of individuals and communities that affect how a climate hazard may impact them. For example, Black communities often have high sensitivity to climate hazards, due to preexisting health conditions, which are driven by disproportionate exposure to environmental toxins. Likewise, agricultural communities are particularly sensitive to water stress due to the water-intensive nature of agricultural activities, with those that lack financial resources and political influence likely to experience the greatest impacts. Engaging with a community to assess its exposure to physical climate hazards, the resources it has to respond, and its residents’ particular sensitivities lays the groundwork for equitable adaptation.
A climate risk assessment centered on concerns for social equity can inform an equitable planning and budgeting process. Traditional cost benefit analysis can undervalue the needs of low-income communities or communities of color, due to its emphasis on ensuring adaptation costs do not exceed property values. While this approach is often used to determine the best locations for adaptation investment, it can perpetuate inequitable distribution of impacts and investment. For example, in Cedar Rapids, IA, a flood mitigation study found that a region on the Cedar River’s West Bank did not qualify for investments in flood barriers due to relatively low property values. However, hundreds of these homes were destroyed by flooding in 2008. Policy makers can integrate a consideration for equity and improve the longer-term return on investment by replacing the current cost benefit analysis to account for vulnerability and longer-term community impacts and savings, rather than only up-front economic impacts.
The distribution of disaster recovery funds will dictate the resources available for community rebuilding and, in many instances, Black communities do not receive the funds they need. For example, after Hurricane Harvey, Taylor Landing, TX received $1.3 million in recovery funds—about $60,000 per affected resident. Taylor Landing is a town of 228, which had a median household income of about $69,000 in 2017 and, according to the Census, had no Black residents. Meanwhile, nearby Port Arthur, a town of 54,000 residents, with a median household income of $32,000 and a population that was over a third Black, received $4.1 million from the same funding—about $84 per affected resident. This inequitable distribution of funds is due to an unrepresentative regional fund allocation system. The members of the council that distributes the funds disproportionately represent the region’s smaller, primarily white towns, rather than the region’s largest cities, including Port Arthur. Moreover, the Small Business Administration approves disaster loan applications from primarily white communities at almost twice the rate that it does for applications from majority Black communities. This discrepancy is largely because disaster loan applications are based on credit scores, which are typically lower for minority populations and are more likely to remain low if these communities lack the resources to recover. This exemplifies the need for Black communities most exposed to climate impacts to be represented in decisions about resource allocation to support climate resilience and for reconsidering financing structures.
Acknowledging that many Black communities face compounding challenges due to a historic lack of investment in their communities, investing in these communities, and reducing the loss and costs that come with repeated impacts are important steps in ending this cycle. This calls for a restructuring of federal disaster response funding processes, moving beyond rigid frameworks based on home value and including advisory committees composed of members of the frontline communities. Financial institutions also have an opportunity to increase the flow of financial capital to Black communities. Strategies can include building advisory offerings meant to foster financial literacy and savings, shifting to key performance indicators focused on client financial health rather than promoting indebtedness and creating new models to reach those typically excluded. For example, accepting proof of current employment instead of requiring credit history to allow individuals to begin building credit would help those typically unable to access capital begin to obtain financing. Building equity in budgeting and promoting equitable lending practices would play a role in breaking the cycle of disenfranchisement.
Integrating Equity into Adaptation
Maladaptation and the Need for Change
There are many different types of adaptation measures, including structural measures, land-use policies and capacity-building. The impacts and efficacy of any adaptation measure is highly context-dependent. One common point of failure is the exclusion of certain stakeholders or when planners, consultants, and policy-makers make their own judgements of what is important and may ignore important characteristics of the community. In this case, there is often high potential for maladaptation, or unintended consequences that end up perpetuating existing social inequities by increasing the exposure of those who are already on the frontline.
For example, levees and other flood barriers often worsen downstream flooding as they force the water through a narrower channel, so there is more volume to inundate surrounding areas that do not have flood protection. The cost benefit calculations discussed above drive these engineering decisions and lead to protection for more affluent communities while nearby low-income towns endure the consequences. Likewise, while increasing flood insurance premiums may help provide incentives to move from flood-prone areas, for those who cannot afford to leave it also leads to increased affordability challenges and potentially the decision to forgo flood insurance, compounding challenges when flooding does occur.
As governments begin to invest in adaptation measures, there is a risk of climate gentrification, or the pricing out of Black residents and low-income communities. For example, in Norfolk, VA, part of the sea level rise strategy is to demolish several public housing units, replacing them with mixed-income buildings and transforming the rest of this exposed area into a green space that can absorb floodwater. The city provides some assistance and vouchers for relocation, but the burden largely falls on the low-income residents. In some cases, their only options are to live farther away from the city center, paying more money for gas to commute to work and making the daily efforts of providing for their families even more challenging.
Many factors influence the efficacy of adaptation outcomes, including whether or not the adaptation is responsive to the community’s needs. For example, if a new cooling center is built, but residents lack transportation or feel uncomfortable meeting in public spaces with few amenities, the cooling center will do little good. Likewise, evacuating ahead of hurricanes saves lives and warning systems can help prompt more thorough evacuations. However, residents that are not informed about the importance of evacuations or those who do not trust public authorities are unlikely to heed evacuation warnings, particularly if evacuations are challenging due to resource and transportation constraints. The long history of racism and exclusionary government programs have weakened trust of public authorities in some communities. Creating adaptation strategies that are truly equitable and effective requires understanding the community’s needs and tailoring a climate response that can be fully embraced by the community at risk.
Policy makers must start exploring alternatives to adaptation guidelines that perpetuate inequity, such as the Army Corps of Engineers’ sole use of property value metrics when assessing which communities get flood protection, or waterfront adaptation that leads to climate gentrification. Some cities including those in the Bay Area, Atlanta and Chicago have started developing Land Trusts to ensure that affordable housing is available in the long-term, even as areas increase in value. The Land Trusts permanently own the land, but allow low-income families to enter into long-term leases and to build equity on the homes. When the time comes to move, the family sells to another qualifying low-income family and a resale formula is used to determine the amount, providing profit for the family that is selling while keeping the home affordable for other low-income families. This is one example of ways that innovative policies can foster equity alongside climate adaptation.
Engagement and Representation
Community engagement should be integrated into all steps of the adaptation process. This engagement can be broken down into three forms: outreach, consultation and deliberation. Outreach is the one-way, information sharing that comes from informing the community about climate risks or adaptation efforts, and consultation involves soliciting community feedback on draft plans and decisions. While this is important, it is essential that community engagement doesn’t just occur in the middle or end of the process, but rather is a central component from the beginning. Having community members present during the decision-making process will help identify what the community really needs. Equitable representation of community members, in terms of demographics and socioeconomic status is essential.
Another important outcome of intentional community engagement is transparent, two-way trust-building. Understanding the language, scientific literacy and culture of a community helps to build trust, and ultimately, to reduce vulnerability as a result of more successful and inclusive adaptation efforts.
Building Upon Existing Capacity
As discussed above, social capital is an important component of resilience and shared culture is one element of social capital. It is often the case that strong bonds exist in communities of color based on shared culture. While many Black communities and other communities of color lack financial capital and, thus, often do not have financial resources to build resilience, their social capital provides a solid foundation from which to build equitable, cohesive adaptation plans. Funneling resources through existing networks such as local religious groups and community cultural centers helps bolster this social capital while also allowing the organizations most informed regarding a community’s needs and trusted by its population to lead adaptation.
One example of adaptation rooted in community engagement and trust building is Baltimore’s Make a Plan, Build a Kit, Help Each Other program centered around residents sharing their stories and discussing the impacts of climate change, while working with local experts to develop preparedness plans. It is important to meet communities where they are, framing adaptation efforts around ensuring that communities have the social resources needed to prepare for climate hazards and acknowledging the wealth of insight and experience the community has to provide.
Equitable climate adaptation involves identifying areas that are on the frontlines of climate change and what they need to prepare for climate impacts. It also involves considering the implications of policy and ensuring that a disproportionate burden is not placed on frontline communities. Investing in equitable adaptation is one essential tool for addressing the disproportionate impacts of climate change on Black communities and other people of color. For too long, planning decisions have excluded communities of color, with long-term negative impacts. While more recent adaption efforts have sought to end this vicious cycle by creating a more inclusive environment for planning, communities of color still lack the political clout and funding to move projects forward. Opportunities to build partnerships with (or within) these communities, identify new funding and development models that directly address decades of exclusion, and reduce repeated loss by helping those most exposed confront climate change, must be embraced and advanced.
The relationship between race and climate change is too often ignored. The recent protests for racial justice and police reform call attention to the fact that racism is still deeply embedded in our institutions and public policies. In the United States, people of color are disproportionately affected by polluting industries and climate change. A long legacy of racist housing policy and weak environmental protections contribute to this disproportionate exposure, coupled with systemic issues related to public health, education and wealth.
As part of our commitment to help raise awareness of the nexus between racial equity and climate change, this article will provide a brief overview of environmental injustice issues in the U.S., as well as highlight the disproportionate impacts of climate change on Black communities and people of color.
Disclaimer: We are aware that the history of environmental justice in the U.S. is deep and complex, and this short piece cannot do justice to the complex web of issues and suffering imposed on minorities. We hope this blog post provides an entry point for identifying organizations and researchers with greater expertise and a long history of commitment to environmental justice.
Housing Discrimination and Environmental Injustice
The disenfranchisement of Black communities and other people of color in the United States includes discrimination in terms of access to education, public transportation, recreation, employment, healthcare and housing. Environmental racism is just one manifestation of this oppression and is particularly evident in housing and development.
Black communities and other people of color have been relegated to neighborhoods that have greater exposure to environmental pollution and toxicity than primarily white neighborhoods. Housing and lending policies have historically limited options for Black communities and people of color and concentrated these communities in locations with higher exposure to environmental hazards. In the 1930s, federal housing policy actively and intentionally contributed to segregation, subsidizing development for middle to low-income white households and prohibiting people of color from purchasing those homes. Relegated to live only in certain areas, entire minority communities were then “redlined,” labeling home buyers’ mortgages as too risky to insure. “Threat of infiltration of negro[s]” and “Infiltration of: Negroes” were often listed as reasons for giving a community a low grade, and for deeming the community as “hazardous.”
In America, where homeownership is the single most important source of equity- and wealth-building, Black households have historically been shut out of higher-value neighborhoods and have been systematically prevented from benefiting from the upward mobility and financial resources that accompany homeownership. Factors like redlining, disenfranchisement and the operation of toxic facilities in Black neighborhoods means that homes in majority Black neighborhoods are valued at half the price of homes with non-Black residents. Lack of opportunity to build equity through home ownership is a key reason that African American wealth equals just 5% of white wealth in the U.S.
Furthermore, as of 2019 over 30 million Americans live in areas where water infrastructure has violated safety standards. For example, in rural and primarily Black Lowndes County, Alabama, only around 20% of the population has a sewer system—the others have pipes deploying raw sewage into their yards. Navajo Nation residents rely on water contaminated by uranium mining, and infections and cancer are rampant in these communities. Lack of access to safe water leads some residents to drive for hours to obtain safe water, which in turn hampers education and work efforts, further perpetuating inequities. There is a nationwide trend in lack of enforcement and regulation around safety standards for drinking water, and often low-income, Black, Indigenous and other people of color who lack political clout endure the most severe impacts. In 2017 the American Society of Civil Engineers rated the U.S. drinking-water infrastructure as a D, estimating a need for $1 trillion investment in the next 25 years to prevent further erosion of pipes.
After decades of discriminatory housing policies and inequitable development, Black communities are still disproportionately exposed to pollution and environmental toxins, leading to detrimental health impacts which are often compounded by lack of access to suitable healthcare. This disproportionate exposure has been well-documented since the 1980s when a nationwide study by The United Church of Christ Commission on Racial Justice found that race was the strongest determinant of the location of commercial hazardous waste sites. Nationally, “African Americans are 75 percent more likely than Caucasians to live in fence-line communities—those next to commercial facilities whose noise, odor, traffic or emissions directly affect the population.”
Disproportionate Exposure to Climate Impacts and Climate Justice
While climate justice has multiple dimensions, at its core it refers to the understanding that those who are least responsible for climate change suffer its gravest consequences. Globally this manifests in developing countries experiencing the worst impacts of climate change, while their industrialized counterparts bear the responsibility for the carbon emissions responsible for worldwide climate impacts. From an intergenerational perspective, today’s younger generations are inheriting the consequences of older generations’ actions related to climate change, with Greta Thunberg a vocal advocate for generational justice.
Climate justice also manifests through racial inequity, in particular in the U.S., where the impacts of climate change will not be distributed evenly. While Black communities and other people of color bear the greatest health costs of industrial activity and of physical climate hazards, they also bear less responsibility for the greenhouse gas emissions causing the climate crisis. While individuals within these communities can be highly resilient, confronting social and economic disparities daily, these communities also often lack the resources to adequately prepare for and respond to the health impacts of pollution and physical impacts of climate change.
Flooding in the United States disproportionately affects Black residents, as Black neighborhoods are often in low-lying floodplains, with impermeable surfaces and a lack of effective flood protection infrastructure. In many cases, nearby chemical sites, refineries and other industrial infrastructure are also located in flood zones, multiplying the risks of exposure to toxic chemicals during storms. While many middle-income white households face difficult decisions about whether to permanently leave their home in the floodplain, not everyone has the economic freedom to make such decisions. In many cases, Black residents and other people of color do not have access to the transportation or the savings to evacuate at a moment’s notice, let alone permanently relocate.
The overexposure of Black neighborhoods to flood risk, alongside the lack of resilience investment in these communities, also leads to disproportionate vulnerability to the impacts of storms. During Hurricane Katrina, Black individuals were among those that were least likely to evacuate, with access to transportation being a key factor. The city’s four largest public housing buildings, primarily occupied by Black residents, were permanently closed after incurring storm damage. Four of the seven zip codes enduring the costliest flood damage due to Hurricane Katrina were at least 75% Black and the community most damaged by Hurricane Harvey was 49% nonwhite. This is a common trend across the nation.
These statistics, stem partially from a history of inequitable funding. In 1965 Hurricane Betsy hit New Orleans, causing the most damage in New Orleans East and the Lower Ninth Ward, which are primarily Black neighborhoods. This catalyzed investment in levees to protect New Orleans from flood waters, but these investments went primarily to predominantly White neighborhoods which were not as damaged and already had some flood protection infrastructure. This distribution of funds foreshadowed the unequal distribution of impacts when Katrina hit decades later.
Sea level rise
Global sea levels have risen by about eight inches over the past century, with the rate of rise increasing recently. In responding to sea level rise, jurisdictions tend to take one of two approaches: invest in adaptation measures to keep the water out, or abandon an area to the rising seas. Studies show that low-income minority neighborhoods are more likely to be abandoned while higher-income predominately white neighborhoods tend more often to be protected. One reason for this is decision-making that relies only on financial indicators. Resilience investments driven by cost benefit analysis focusing only on the property values, rather than looking at social and cultural characteristics of a community, further contribute to the inequitable impact of climate change.
Relatedly, as the risks of sea level rise become more evident there is an increased risk of “blue-lining” – a term used by Tulane Professor Jesse Keenan, to express its connection to redlining. Many Black and low-income populations that did not receive investment in sound sewage and drainage systems due to redlining experience the worst impacts of flooding today. As banks and investors learn about exposure to floods and sea level rise, they are increasingly hesitant to offer funding to these neighborhoods. Yet without investment, communities are unable to improve their infrastructure and build resilience, further reinforcing the cycle of racial injustice.
Research in Miami-Dade County, Florida found a positive relationship between price appreciation and elevation in most study cities. This shift can potentially lead to ‘climate gentrification’—another term coined by Prof. Keenan, as minority populations migrate towards more exposed areas. For example, in Miami’s higher elevation, traditionally minority neighborhoods such as Liberty City and Little Haiti, rising property values are making homes unaffordable for residents, reflecting the new preference for high elevation. This combination of being priced out of higher elevation neighborhoods and property values decreasing in more exposed coastal areas may further contribute to the cycle of disproportionate exposure to sea level rise among Black populations and other minority residents.
According to the World Resources Institute’s data, 20% of the U.S. currently experiences “high” or “extremely high” water stress, and this number is expected to increase significantly by midcentury. Population growth will further threaten drinking water supplies, and the impacts will be uneven. In 2014 the water table in Fairmead, an unincorporated town in California’s Central Valley with majority Black and Latino residents, dried up and the citizens had to rely on donations and emergency relief for drinking water. Many of Fairmead’s residents are farmers, relying on water for their livelihoods as well as for human consumption, and water for irrigation comes from private wells that are only a few hundred feet deep. While these farmers cannot afford to drill deeper wells, nearby corporate farms can afford to drill wells up to 1,000 feet deep and are thus less affected by the dwindling water table. Climate change will exacerbate existing inequities around water access, particularly for Black and Indigenous communities.
Extreme heat kills more residents annually in the U.S. than any other climate hazard. Temperatures can vary by as much as 20ºF between neighborhoods due to the urban heat island effect. The hottest neighborhoods tend to be disproportionately covered in concrete and home to low-income and Black residents. Research shows that these urban development trends are connected to the history of racist housing policies. Residents in low-income and Black communities are also less likely than middle-income and white populations to have well-insulated homes, access to consistent air-conditioning or cool, safe public gathering spaces. Meanwhile, the asthma, heart disease and other chronic illnesses precipitated by exposure to air pollution, increases the health risks of extreme heat.
Due to a history of segregation and systematic economic oppression Black communities are consistently relegated to areas most exposed to flooding and extreme heat, while at the same time lacking resilience investment and access to educational, health and transportation resources to effectively prepare for and respond to disasters. Investing in equitable climate change adaptation is one facet of pursuing climate justice. Equitable adaptation requires involving community members in every step of decision-making and reviewing adaptation options based on the exposure and vulnerability of the community in question, as well as the potential for downstream impacts on others. We discuss this subject in our blog on equity as a cornerstone of adaptation.
We at Four Twenty Seven are saddened and angered by the recent killings of Rayshard Brooks, George Floyd, Breonna Taylor, Ahmaud Arbery along with so many others, and by the systemic injustice and continued brutality Black individuals experience every day. We stand in solidarity with the Black community against all forms of racial injustice and we state unequivocally that Black Lives Matter.
During this time of national reckoning, we are reflecting on our responsibility to use our platform to speak out against injustice and elevate the voices of Black people, other People of Color, and those who have dedicated themselves to racial justice.
While the issues we are facing today are not new, they have reached a boiling point, due to centuries of injustice, mistreatment and violence against Black individuals. This is a systemic problem, deeply rooted in our society, that calls for systemic change. We are committed to being a part of the change.
Together with Moody’s, our parent company, we believe “we all have a responsibility to do better and to build a more just society that serves everyone equally.”
As a company whose mission is to catalyze climate adaptation and resilience, we are committed to supporting equity and racial justice in our daily work. Black communities and communities of color are disproportionately affected by climate change and environmental degradation. They are on the frontlines of the impacts of pollution, extreme heat, storms, and disease. They have less means to mitigate detrimental climate and environmental effects, and often lack insurance and other means to recover when disaster strikes. Any investment in systemic resilience must be an investment in equitable adaptation.
As part of our commitment to change and owing to our expertise on environmental and climate-related issues, we commit to taking the following steps:
As an organization and an employer, we also commit to fostering dialogue on racial justice among our team members and will strive to enhance the diversity of our team.
James Baldwin’s words ring true today more than ever: “Not everything that is faced can be changed, but nothing can be changed until it is faced.” We stand in solidarity with the Black community and are committed to doing our part to change the system and fight racism and injustice in our country.
April 22, 2020 – Four Twenty Seven Analysis. The devastating human health and economic impacts of the COVID-19 pandemic are exacerbated by climate hazards, which threaten communities around the world. This analysis explores exposure to floods, heat stress, hurricanes and wildfires in U.S. municipalities alongside the impacts of COVID-19 on the same regions. It discusses the compounding challenges for economies, infrastructure and human health and the importance of preparing for these overlapping disasters.
Introduction: Climate Preparedness Takes on New Meaning
Last week in the Southern U.S., residents and policy-makers weighed the risks of high winds and flooding alongside the risks of spreading COVID-19, as many evacuated to storm shelters, and 750,000 people lost power across ten states from Texas to West Virginia. Meanwhile that same week 50,000 people in Connecticut lose power because of a storm, with restoration efforts complicated by COVID-19 precautions. The threat of climate-driven extreme weather events takes on new meaning when standard responses such as evacuating to shelters conflict with guidelines for preventing the spread of the disease. The pandemic’s impacts have been compared to Hurricane Katrina hitting all 50 states. FEMA, which is leading the nation’s response, typically only battles disasters in a few states at once.
To ensure the safety of residents, many are typically urged to evacuate ahead of hurricanes and wildfires. However, crowded evacuation centers are prime conditions for diseases to spread. Authorities in several states are actively exploring the best responses to this challenge, considering options for increasing the capacity of evacuation centers, taking temperatures before admitting evacuees and booking blocks of hotel rooms as a last resort.
Hazards such as heat waves and wildfires pose human health risks that will contribute to already overwhelmed healthcare systems. Further, many communities rely on cooling centers and visit public spaces such as shopping malls to seek relief during summer months. Measures to reduce the spread of COVID-19 include the closure of facilities such as libraries and malls that typically serve as cooling centers. During a time when residents are encouraged to stay in or near their own homes, a heat wave would pose new danger. However, measures to improve preparedness, such as ensuring that hospitals have back-up power generators, improving availability of virtual healthcare and seeking alternative sources of personal protective equipment, will help communities prepare for the impacts of climate hazards as well as the pandemic.
The economic consequences of the pandemic also exacerbate the challenges presented by climate hazards for cities and residents. For those individuals who have lost their jobs due to COVID-19-related closures, decreased income may make it difficult to acquire needed emergency supplies or pay to relocate to a safe haven. Local governments already reaching deep into their coffers and straining existing resources, may have trouble allocating emergency personnel and resources to evacuate residents and to rebuild after a disaster.
This analysis explores the regions of the U.S. that are particularly exposed to the climate hazards of floods, heat stress, hurricanes and wildfires and how this exposure may exacerbate existing challenges due to COVID-19.
Extreme Rainfall and Flooding
Devastating flooding last year disrupted lives, threatened livelihoods and contributed to 19 million acres of cropland going unplanted. Seventy percent of those acres were in the Midwest, which was sodden for months. Communities are bracing for new floods this year which are expected to be severe, though not as devastating as last year’s floods. Counties in the Midwest are among the most exposed to increasing extreme precipitation due to climate change in the next several decades (Figure 1), where these floods are likely to become a regular occurrence.
This year, inundation would exacerbate the existing challenges of containing COVID-19, while COVID-19 containment precautions would, in turn, make flood response more challenging. Midwestern states such as Michigan, Illinois and Indiana are among states with the highest number of COVID-19 cases relative to their populations. While less densely populated communities have fewer cases to date, many Midwestern counties such as Cook County in Illinois and Franklin and Hamilton Counties, in Ohio already have a significant number of COVID-19 cases. Likewise, smaller towns typically have fewer financial resources and fewer staff dedicated to emergency relief.
The economies of many Midwestern communities depend upon agricultural and manufacturing industries, which require manual labor and the physical presence of the employees. Some manufacturing facilities reopened to produce personal protective equipment, and farms and grocery stores are both considered essential. However, these industries are at heightened risk of disruption from employees falling ill, as seen at several meatpacking facilities across the country. Floods can exacerbate these challenges, inundating roadways, manufacturing facilities, farms, and even grocery stores, preventing healthy staff from getting to and from their place of employment and disrupting the movement of goods. These impacts can also threaten food security if they disrupt food supply chains.
NOAA predicts above-average temperatures for much of the country through July, with no regions expecting below-average temperatures. Exposure to extreme heat is concentrated in Missouri and western Illinois, fanning out across the Midwest and South and including several areas that have had high numbers of COVID-19 cases to date (Figure 2). For example, the metropolitan areas surrounding Chicago and Detroit have both been hard hit by COVID-19 and face moderate exposure to heat stress. The Southeast corner of Florida faces high numbers of COVID-19 impacts as well as high heat stress and a looming hurricane season.
It is currently unclear how warmer temperatures will affect the spread of the virus. However, heat waves hinder worker productivity and can lead to safety concerns for outdoor workers, such as farmers. In addition to their human health impacts, heat waves also lead to higher peak energy demand as use of air conditioning surges. If governments and businesses alike continue to require or encourage their employees to work from home, reliance on air conditioning and power will likely be higher this year than in typical summer months. Resulting power outages can disrupt business continuity, particularly with operations dispersed across employees’ homes.
Climate change is contributing to more frequent intense hurricanes and more severe storms are expected this season compared to the average season. States along the Gulf Coast and Atlantic Ocean are highly exposed to hurricanes (Figure 3), and several of these states, such as Louisiana and Florida, also have among the highest numbers of COVID-19 cases to date.
Local governments that depend upon sales tax are likely to feel the most immediate fiscal impacts from COVID-19, while those that rely more on property tax may feel longer term impacts influenced by foreclosures. In Florida, sales tax was responsible for 77% of the state’s general revenue in the 2018-2019 fiscal year, which suggests that it will face the fiscal impacts of COVID-19 over the next several months, corresponding with the hurricane season, when funds may be most needed. Other states, such as Louisiana, have extended their tax filing date indefinitely, which will delay tax income. Regions that depend on tourism, such as the Florida Keys, will be going into hurricane season with fewer fiscal resources than usual this year. A lack of fiscal resources will challenge preparedness efforts and emergency response to hurricanes.
As climate change contributes to more severe droughts and extreme heat events, wildfire season in the western U.S. has worsened over the past several years. California, Washington and Colorado are among those states most exposed to wildfires, and they are also among those states with the highest numbers of COVID-19 cases to date.
While the spring is usually spent preparing for wildfire season, these preparations have been hindered this year. Annual efforts to remove brush have been postponed, while hiring has been delayed and annual trainings have been canceled. Fire agencies are going into this year’s season understaffed, with many firefighters already sick or quarantined. They are also wary of the dangerous conditions of base camps, where firefighters sleep in close quarters on the front lines.
The economic impacts of COVID-19 on employment and incomes will exacerbate the losses caused by wildfires and will likely lead to higher numbers of residents facing tough questions around whether or not to leave an area if they lose their homes. The resulting emigration or delayed rebuilding will in turn reduce local government revenues.
Residents in fire-prone areas increasingly wear N95 masks to protect themselves from wildfire smoke. However, these masks are in short supply and authorities have directed that masks should be saved for medical personnel. If shortages persist into this year’s wildfire season, communities could face greater long-term respiratory health impacts due to wildfire smoke.
As COVID-19 continues to spread and its timeline remains unknown, each region of the country faces exposure to climate hazards which will complicate containment efforts. However, in a time when local jurisdictions and individuals are paying increased attention to disaster preparedness there is an opportunity to strategically prepare for climate hazards and invest in resilience that supports responses to any disaster. Hurricanes, wildfires, floods and heat waves are inevitable in our changing world, and the more proactive resilience-building that occurs, the better positioned communities will be to minimize the loss of lives and livelihoods.
March 26, 2020 – Four Twenty Seven Analysis. We leverage our global database of manufacturing sites to identify industrial plants that may be able to contribute to the production of personal protective equipment and medical equipment to address the global public health crisis. The data is available free of charge to state and national governments seeking to engage with manufacturers in their jurisdictions.
As COVID-19 continues to spread, states and countries experience shortages of essential first response equipment such as masks, hand sanitizer, ventilators and hospital beds. A few manufacturers in the perfume, automobiles and electronics sectors have responded by repurposing their facilities to produce equipment that will help deal with the public health crisis.
These companies demonstrate the potential for more widespread public-private partnerships during this global crisis. To support these efforts and encourage public-private partnerships, we leveraged our global database of corporate facilities to identify the companies that have facilities that may be repurposed to contribute to this effort.
Based on news coverage of companies that have announced efforts to repurpose their manufacturing facilities to support COVID-19 response efforts, we identified facilities within SIC industries that may be able to contribute. The table below provides the list of sectors included in our analysis. Note that many factors influence whether or not a specific facility can be repurposed, so this data is intended as an entry point for a dialogue and engagement with industry.
Starting with a database of about a million corporate facilities owned by large, publicly-traded companies, we identified 11,322 facilities globally in sectors of interest. 2,755 of these are in the United States. Below we provide examples of industries in the four states with the largest number of facilities based on this analysis, which are also among the states with the most diagnosed COVID-19 cases to date.
As of March 26, New York has the most diagnosed cases of COVID-19 in the United States. We found 149 manufacturing facilities in the state with the potential to be repurposed to support response efforts. Household and personal products make up 48 of these facilities and include 20 manufacturing facilities owned by Estée Lauder and 10 owned by L’Oréal. On Monday Estée Lauder announced that it would reopen one if its facilities in New York to produce hand sanitizer. Meanwhile, cosmetic company LVMH transformed three of its French perfume factories into hand sanitizer producers, supplying health authorities and hospitals in France. L’Oréal Group has also joined other cosmetics companies in Europe to use its manufacturing facilities to produce hydroalcoholic gel and hand sanitizer. This suggests that cosmetic companies in the United States may also be able to repurpose their facilities.
There are 57 manufacturing facilities owned by pharmaceuticals, biotechnology & life sciences companies in New York State, including 16 owned by Pfizer. In addition to having the necessary machinery and supplies, companies also need to address regulatory constraints around manufacturing different types of medical equipment. However, there are opportunities for businesses and governments to work together to identify appropriate exceptions to allow companies to support the urgent public health demands. For example, pharmaceutical company Roche recently got emergency approval to distribute high-speed coronavirus tests.
New Jersey and California have the second and third largest number of residents diagnosed with the virus and they each have 228 manufacturing facilities with the potential to be repurposed for COVID-19 response efforts based on their industries. Similar to New York, there are 160 facilities owned by pharmaceuticals, biotechnology & life sciences companies in New Jersey, with Pfizer, Merck and Johnson and Johnson representing the largest number. Likewise, there are 27 facilities owned by household and personal products companies, 10 of which belong to L’Oréal. New Jersey also has 21 chemical manufacturing facilities, which could potentially use their equipment to produce hand sanitizer or test kits depending on their equipment and resources.
California facilities that may be able to contribute include 29 owned by automobile and component companies. Those with more than one applicable facility include Autoliv Inc, Aptiv PLC, Ford, Tesla, Toyota and Honda. General Motors and Tesla have already begun producing ventilators, while Ford has said that it’s considering the possibility. The FDA has waived some approval regulations typically required of new ventilator manufacturers, which helps open the door for companies to step up. We also identified 18 facilities owned by textile and apparel manufacturers in California, such Adidas, Nike and VF Corporation that could potentially use their equipment to produce masks.
While medical-grade masks are made from specialized fabric that many fabric companies don’t usually have access to, there is already a collaborative effort between yarn spinner Parkdale Mills, Inc and textile companies such as Fruit of the Loom and Hanes brand to create a manufacturing supply chain for masks. This indicates the potential for other clothing companies to contribute to the efforts by producing masks or hospital gowns. There are also 137 manufacturing facilities owned by healthcare companies in California, which can potentially transition their production to materials directly relevant to the COVID-19 crisis. For example, Allergan and Pfizer both have 13 facilities across the state. Roche, discussed above, also has nine facilities in the state.
Michigan, the state with the fourth most COVID-19 cases as of March 26, has the largest number of manufacturing facilities owned by companies that may be able to produce response equipment. Out of 262 applicable facilities, the state has 181 owned by automobile and component companies, with 27 owned by Aptiv PLC, 26 owned by General Motors, and 24 owned by Magna International Equipment. The transformation of several other car manufacturing facilities into ventilator production centers shows the potential for these facilities to be repurposed.
As states and countries strive to identify the most efficient responses to an unprecedented global public health crisis, there is an opportunity to leverage existing capabilities. Understanding which companies may have tools that can help support response efforts can help inform conversations around addressing this crisis.
Four Twenty Seven is making the underlying data available free of charge to state governments, please send requests to Natalie Ambrosio, Director of Communications (email@example.com) if of interest.
This analysis was written with support from Lindsay Ross.
March 18, 2020 – 427 ANALYSIS. The spread of the coronavirus (COVID-19) has created a global public health emergency and catalyzed an economic recession. The crisis also has important implications for climate action and resilience-building. This analysis highlights several of these interacting factors.
The unprecedented global public health crisis from COVID-19 has led to a deteriorating global economic outlook, but also presents a range of implications for climate change. While COVID-19’s immediate impacts include emissions reductions, the longer-term impacts on climate action and resilience-building are more complex. Likewise, COVID-19 may provide insight into how prepared communities are for the increasing frequency of disasters and how financial institutions can prepare for sudden disruptions. This article will explore several of these impacts, outlining topics to watch as we strive to understand the long-term implications and ensure the safety of communities and businesses.
COVID-19 and Emissions
The rapid spread of COVID-19 has led some of the world’s largest economies to grind to a halt as social distancing measures prohibit non-essential business. The resulting emissions reductions provide a small silver lining to this unprecedented global crisis. In mid-February China’s emissions were 25% lower than a few weeks prior and Italy’s nitrogen dioxide emissions have dropped significantly. However, these may be short-term victories for the planet.
There is much more uncertainty on long term effects. On the one hand, this period of disruption will likely be followed by economic stimulus efforts, providing credits to industries with large emissions, such as steel, cement, and airlines, driving a rapid rebound in emissions. On the other hand, experts note that there is potential for the outbreak to shift travel patterns for the long-term, leading to more telecommuting as companies get acclimated to remote work. There is potential for permanently behavior changes that would have long term impact on oil demand and emissions. Whether or not governments focus on promoting a rebound in traditional energy or use this as an opportunity to catalyze a systemic shift to reduce emissions could be a key determinant in the impact on long-term greenhouse gas emissions.
Setbacks to Climate Action
It is evident that in the short-term ambitious climate policies are not a priority, as the attention of citizens and legislators turns to safeguarding communities and economies from the multifaceted impacts of COVID-19. Numerous climate-related events have been canceled, and in-person negotiations planned ahead of COP-26 have been delayed through at least April. The U.K. changed its generous environmental budget allocations and Spain stopped all legislative activity, with implications for climate action. While the European Union has announced a continued commitment to its Green Deal, meant to make the European Union climate neutral by 2050, the news has gotten limited attention due to the circumstances.
As increasingly severe travel and gathering restrictions begin to have rippling impacts, ongoing climate research is disrupted, including arctic research expeditions and several NASA projects. These studies include research on the ocean-atmosphere heat exchange, seasonal hydrology in the Mississippi River, and thunderstorms across the U.S. While NASA does not expect the delays to be detrimental to the projects, delays may range from several months to over a year. This may challenge efforts to ensure that the most current science underpins resilience-building efforts and climate progress.
Lessons Learned in Preparedness
A global pandemic is a well-rehearsed scenario in risk management, and institutions that had prepared and thought through implications of such an occurrence are faring better than those with less preemptive planning. For example, last October banks in Hong Kong underwent a stress test that simulated a pandemic, cyberattack and telecom breakdown happening concurrently. Now facing an actual pandemic, some banks are grateful for additional preparedness measures they had implemented due to the stress test. The COVID-19 crisis may in turn lead banks, other businesses and governments to identify opportunities for additional preparedness measures for future risk.
As communities around the world face various levels of restrictions and concern for large gatherings grow, supply chains are threatened and manufacturing grinds to a halt, vulnerability to climate impacts increases. If a devastating storm or wildfire forced residents from their homes into crowded evacuation centers, the typical damage, loss and public health costs would compound upon the danger and challenges already being faced due to COVID-19. Likewise, the costs of recovery from a climate disaster would be dire on top of the increasing economic uncertainty.
Similarly, as companies face the impacts of the pandemic, including adapting to remote work if possible, an extreme weather event would complicate their efforts. While office buildings and key facilities may be prepared with generators in case of power outages and water proofing for floods, business’ operations are now particularly dependent on public power and communication infrastructure, as well as the resilience of each employee’s home. In addition to the disruption if employees are ill, many businesses are more vulnerable to disruptions from climate hazards during this time, which in turn increases macroeconomic vulnerability. Of course, the pandemic itself has many multifaceted economic and business impacts.
Conclusion: Underscoring the Need for Resilience
COVID-19 has understandably pushed climate action to the back burner as the public health crisis unfolds and fears of a long-term economic recession are pressing. However, the ways policy-makers, business and individuals respond to today’s public health emergency and the resulting successes and failures may provide lessons for responding to other multifaceted disasters, applicable to extreme weather events and natural disasters. Likewise, the COVID-19 crisis may reinforce the value of preparedness for businesses and communities and help highlight opportunities to invest in adaptation and resilience.
As you may already be aware, Four Twenty Seven was acquired by Moody’s Corporation in 2019 and officially became a part of Moody’s ESG Solutions Group in 2020.
Over the coming weeks, we will begin to retire the Four Twenty Seven brand name and replace it with Moody’s ESG Solutions. Our commitment to producing science-driven insights and analytics on climate risk remain the same and you can continue following our latest research at https://esg.moodys.io/climate-solutions.
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