Mitigating the risk of property loss and business interruption through extreme weather;
The warming of the planet has the potential to create extreme weather events that can significantly impact businesses, jobs and economies on a regional or global scale, according to a new FM Global white paper on climate change.
The paper brings together the thinking of FM Global researchers and four of the world’s leading atmospheric experts. The team evaluates the current state of knowledge on climate change and looks at steps business leaders can take to mitigate the risk of property loss and business interruption.
The white paper is titled Coping with Extremes: The Impact of Climate Change on Extreme Precipitation and Flooding in the United States and How Businesses Can Prepare Now. It represents the work of FM Global researchers and renowned climate experts Dr. Kevin Trenberth, distinguished senior scientist at the National Center for Atmospheric Research; Kerry Emanuel, professor of atmospheric sciences at the Massachusetts Institute of Technology; Minghua Zhang, dean of the School of Marine Atmospheric Sciences at Stony Brook University; and Dennis Lettenmaier, distinguished professor at the University of California, Los Angeles.
Using the best available observational data and science, the paper concludes that climate change will make certain regions of the United States prone to more intense precipitation events and a potentially increased risk of flooding. But other areas are likely to experience less precipitation, prolonged droughts and a potentially greater risk of wildfires. These anticipated changes are not uniformly distributed geographically, the paper states, so business and property owners need to prepare for locally intense precipitation or drought conditions depending on their location.
The science behind the temperature
While extreme precipitation and flooding events are as old as recorded history, the science of understanding the weather patterns that cause them has dramatically evolved through enhanced computing power and improved observational platforms. In the white paper, Prof. Emanuel, Dr. Trenberth and Prof. Zhang explain the science behind the changing precipitation patterns American businesses will be exposed to in the century ahead.
A well-understood physical mechanism, the Clausius-Clapeyron relation, indicates that warmer air temperature will result in increased water vapor loading in the air, Dr. Trenberth explains. This additional water vapor supplements cloud formation, potentially leading to more intense precipitation.
“When the climate becomes warmer in areas that already have high precipitation, the air, as it rises, will produce more precipitation because it contains more moisture,” adds Prof. Zhang.
Prof. Emanuel reinforces this concept through analysis of water cycles over oceans. He evaluates the radiative-convective equilibrium, and demonstrates that as sea surface temperature increases in a warming climate, surface air humidity will increase exponentially and faster than radiative cooling increases. The result is a decrease of convective mass fluxes and an increase in rainfall intensity. This means that rain will be more intense but less frequent, and that, in general, wet places should become wetter while dry places should become drier, he says.
“Basic physics tells us that as the climate warms, the water cycle becomes more volatile,” Prof. Emanuel says. “Absent large changes in atmospheric circulations (e.g., wind velocity and patterns), this volatility means that places that are usually very dry, like southern California, will likely get drier. And places where it rains a lot, like the Pacific Northwest and the Southeast United States, will probably experience more rain.”
But that’s on average, Prof. Emanuel cautions. “It doesn’t mean that historically dry places won’t also experience heavy precipitation or rainy places won’t have weeks of sunshine,” he says. “What is conclusive is that based on strong theoretical expectations backed up by climate models, most places will experience more volatile weather, which is chaotic to begin with. We feel climate change not so much through subtle changes in the mean, but through changes in the extremes.”
At the other end of the weather spectrum, similar phenomena affect prospects for less precipitation in certain regions. “In areas that are well inland and typically drier, higher temperatures and increased solar insulation (i.e., less shade from clouds) create more surface evaporation, exacerbating the already dry conditions,” explains Prof. Zhang.
Timing is everything
The white paper explains that overall precipitation may not change as a result of climate change but fewer, more intense storms have the potential to overwhelm rivers and catch basins, adding to the threat of floods.
“The observed amount of total precipitation has shown little change since 1950, but with the increased water vapor in the air, the precipitation events become less frequent with stronger intensity,” says Dr. Trenberth. “There will be different consequences depending on how the same amount of precipitation is distributed in space over the same time period.”
For example, a specific region of the country that has historically seen 10 inches (25.4 cm) of rain each May might see the same volume that month for decades to come. But that amount of May rainfall might occur in two days as opposed to four, increasing the risk of flooding.
Warming temperatures also have the potential to increase the total amount of rainfall.
“If by the end of this century, the temperature has increased by two or three degrees Celsius based on global averages, it is possible for precipitation to change by 8 percent. Changes on a local basis could be much higher,” Prof. Zhang says.
If certain regions of the United States experience more intense precipitation events, one may expect an increase in the risk of flooding. But so far, that has not been the case.
“There is not a lot of evidence in the last 50 years or so for trends in extreme floods,” states Prof. Lettenmaier, whose expertise includes hydrologic modeling and prediction and hydrology-climate interactions. He says that is because flooding is a complex interaction of precipitation extremes and other factors such as soil parameters, ground cover, basin geometry, antecedent conditions and water management systems.
The infrequency of such flooding events is among the challenges in the affected regions, in that some business owners may lack a natural urgency to plan for extreme precipitation or flooding. In earlier FM Global research, 96 percent of financial executives surveyed said their companies had operations that were exposed to natural catastrophes like hurricanes, flood and earthquakes; yet fewer than 20 percent said their organizations were “very concerned” about such disasters hurting the bottom line.
“Anthropologists cite generational memory threshold as a key to a given culture’s adaptation to extreme weather events,” Prof. Emanuel adds. “In a place where memory extends back 100 years, people might expect a single event of extreme rainfall and heavy winds since such an event occurred 75 years ago. It’s when the event is a 1-in-150-year massive hurricane that everything falls apart. Nobody builds for such events, and the result is colossal damage.”
Companies with built or planned structures in affected regions can prepare for extreme weather events in the future by taking action now, the paper concludes.
“Risk managers should take into account these possibilities, making sure they review the resilience of their buildings or new locations to withstand the impact of an extremely high rainfall event and area flooding,” Prof. Zhang says.
Now is the time for businesses to examine their buildings’ ability to withstand flooding, as well as evaluate their processes to manage surface water, roof drainage and water supply. Similarly, companies should be mindful as to where they build new plants, factories and other structures, closely evaluating the potential impact of extreme precipitation and flooding.
Businesses should also consider currentand prospective supply chain partners withrespect to their ability to withstand business interruption caused by severe flooding. The white paper recommends that, rather than just focus on the 100-year flood zone, businesses are wise to protect to the 500-year flood period levels. This would mean they have less than a 0.2 percent (1/500) chance of flooding every year. Often this doesn’t mean a huge change for the business, the paper says. A slight relocation or modification can move a location from a 100- to 500- year flood protection level. When viewed over the lifetime of a building or mortgage, the risk is significantly reduced.
“As an engineering-driven property insurer, we collaborated with leading experts in atmospheric science to understand in great detail the effect of climate change on precipitation,” says Louis Gritzo, Ph.D., vice president, manager of research at FM Global. “We very much hope that business leaders will use this white paper to continually enhance their resilience by preparing their property for whatever precipitation extremes they are likely to experience.”
The white paper cautions that while the underlying science behind the conclusions is sound, the findings are not a detailed scientific prediction of the future. “While the atmospheric scientists have confidence in their research, uncertainties will always exist regarding the impact of climate change on precipitation events locally and regionally. Nevertheless, there is reason to take precautions and increase preparedness,” the paper says.
You can find the full white paper here
This article first appeared in Reason magazine Issue 2, 2016, which you can read here