Hurricane Helene Aftermath, NZ Adaptation Report, New Parametric Insurer, and More

Today in Climate Proof:

Finance:

• Post-Helene, US Disaster Funds Run Low

• US Flood Investments Yield $3 in Benefits for Every $1 Spent

Policy:

• Climate Resilience in Focus After Hurricane Helene

• Adaptation Not Too Costly, G20 Ministers Say

• New Zealand Adaptation Report Underwhelms

Tech:

• Adaptive Insurance Debuts AI-Powered Parametric Solution

Research:

• Another round-up of papers and journal articles on all things climate adaptation

Post-Helene, US Disaster Funds Run Low

The US Federal Emergency Management Agency (FEMA) does not have enough funds to last through hurricane season, the Homeland Security Secretary has said.

“We are meeting the immediate needs with the money that we have,” Alejandro Mayorkas told reporters last Wednesday. “We are expecting another hurricane hitting — we do not have the funds, FEMA does not have the funds, to make it through the season.”

His comments come in the aftermath of Hurricane Helene, which tore through the southeastern US eleven days ago. The storm has killed upwards of 230 people and could inflict US$250bn in total losses. Right now, Florida is bracing for Hurricane Milton, a Category 5 storm which is on course to hammer the Sunshine State later this week. The Atlantic hurricane season runs from June through November, with most storms occurring in September and October.

National Hurricane Center Forecast Cone For Hurricane Milton (October 7, 2024, 10:00 CDT)

FEMA had given out US$45mn directly to survivors of Hurricane Helene as of October 4. Total federal assistance topped US$210mn as of today (October 7). More than 150,000 households had requested aid as of last week, according to a FEMA representative.

In a recent report, the agency said its Disaster Relief Fund (DRF) had US$3.4bn available as of August 31. The report estimates US$10bn in disaster relief obligations for September alone. On September 25, Congress passed a stop-gap spending bill to prevent a federal government shutdown, which included US$20bn to replenish the DRF and gave FEMA the ability to draw on the cash more quickly. 

However, some lawmakers fear the agency may still suffer a funding shortfall. On October 1, a bipartisan group of senators published a letter stating that “Congress must act to meet the unmet needs in our states and address the scope and scale of destruction experienced by our constituents” and floating the idea that lawmakers reconvene in October to pass necessary funding bills.

However, both chambers of Congress are currently in recess until after the November election, and House Speaker Mike Johnson has not indicated a desire to recall members early.

US Flood Investments Yield $3 in Benefits for Every $1 Spent

Each dollar of US federal spending on flood resilience is estimated to reduce damages by US$3 on average, according to estimates published by the Congressional Budget Office (CBO).

The nonpartisan agency calculated that US$15bn was spent on flood protection in 2022, up from US$5bn in 2019. The surge was in part due to investment authorized under President Biden’s flagship climate law, the Inflation Reduction Act. However, this spending is dwarfed by the US$46bn in annual losses from flood damage that have been incurred over the last decade on average.

Flood protection funds are largely distributed by the Army Corps of Engineers, the Federal Emergency Management Agency (FEMA), and the Department of Housing and Urban Development (HUD).

Cost-benefit analysis by the Army Corps of Engineers suggests that for each dollar of spending, two-thirds of its projects are expected to cut flood damage by US$2 to US$6 over a 50-year project lifetime. FEMA’s adaptation projects are estimated to reduce damage by around US$2 for each dollar spent.

The Distribution of Expected Costs From Flood Damage

The CBO report further estimates that the benefits of flood protections flow largely to households, which face roughly half the costs of flood damage. The federal government itself bears around 36% of flood costs, and businesses 15%. 

“Households would not only experience less damage to their homes and personal property and less need for temporary housing after floods; they would also lose less income as a result of economic disruptions and would face less risk of death and injury. In some instances, the reductions in losses resulting from adaptations may lead to higher property values, which would benefit current homeowners,” the report reads.

The CBO data may prove useful to lawmakers working on legislation to enhance US climate resilience.

Other Stuff

Biden-Harris Administration announces more than US$279mn in new housing investments (US Department of Housing and Urban Development)

Morgan Stanley Investment Management closes 1GT climate private equity fund at US$750mn (Morgan Stanley)

Activate seeks another US$500mn as climate fundraising boom continues (Venture Capital Journal)

UAE to invest US$30mn to support Ghana’s biodiversity, climate goals (Emirates News Agency)

A landmark fund for climate reparations is beginning to languish (Grist)

Saudi Arabia to help Pacific islands develop, fight climate change (Arab News Japan)

The Global Innovation Lab for Climate Finance’s 10th cohort presents over US$490mn in climate investment opportunities (Climate Policy Initiative)

Adaptation and resilience: how donors can support mainstreaming into financial decision making and scaling up of private investment in solutions (Oxford Policy Management)

Climate Resilience in Focus After Hurricane Helene

US policymakers have pledged action on climate resilience in the wake of Hurricane Helene, which is now the country’s second-deadliest storm in fifty years.

President Biden surveyed the storm’s aftermath last Wednesday and Thursday, saying before a briefing in North Carolina that people must be “brain dead” if they still deny the impacts of climate change. Vice President Harris visited affected communities in Georgia and North Carolina last week too, as did former President Trump.

Helene’s fury has refocused attention on climate-proofing communities in the path of hurricanes. The latest storm dumped 42 trillion gallons of water on the affected states, with some parts of North Carolina seeing more than 2.5 feet of rain in three days.

Federal officials made clear the need for climate resilience measures and adaptation in the wake of Helene. “Our immediate focus is to make sure people get that help that they need. But we’re also working to make sure that we’re smarter for the long term so that our infrastructure is more resilient,” said Transportation Secretary Pete Buttigieg. He added that the Biden Administration is looking to improve hurricane evacuation routes and the deploy more climate-resilient materials to deal with future extreme weather shocks.

In an article, The Center for American Progress (CAP), the left-leaning think tank, said Congress and federal agencies must mobilize funding to “rebuild communities to withstand future extreme weather events and climate disasters”, along with finance for infrastructure projects.

“Congress should encourage smart decision-making by requiring states and localities to specify in disaster aid grant applications how they plan to rebuild in ways that reduce future climate disaster risks, for example, by protecting wetlands to reduce storm runoff and updating building codes to avoid building on steep slopes and ensure that structures are elevated to reduce flood risks. Congress could direct agencies to reward states taking strong resilience actions with higher grant amounts,” CAP wrote.

Adaptation Not Too Costly, G20 Ministers Say

Officials from the world’s top economies pledged to “shift the present narrative of adaptation being unaffordable” and support efforts to climate-proof the world.

G20 environment ministers met in Rio de Janeiro, Brazil on October 3 and 4. In a declaration following the event, they promised to keep climate adaptation high on the G20 agenda and push back against the idea that adaptation is too expensive, recognizing that the “costs of inaction are far greater than the costs of mitigation and adaptation.”

Moreover, the ministers said they would explore ways to increase adaptation financing, especially from public sources. This may include development of “a dedicated framework or a platform for private investment for adaptation.” The declaration also included language on ways to accelerate adaptation actions and to strengthen the resilience of “all societies, economies and ecosystems with special attention to the most vulnerable segments of the population.”

The environment ministers’ meeting comes ahead of November’s G20 Heads of Government Summit, where the various work streams directed by the Brazilian presidency of the group will conclude.

New Zealand Adaptation Report Underwhelms

Lawmakers in New Zealand wrapped up the country’s inaugural climate adaptation inquiry last week with a report that some of its own members criticized for being “vague”.

Published October 1, the report — written by the New Zealand Parliament’s Finance and Expenditure Committee — presents recommendations for the government’s upcoming climate adaptation framework, together with ideas on who should pay for resilience measures.

However, even the report’s own authors aren’t enamored of the final product. In the preamble, lawmakers admit that some members feel the recommendations “remain vague, [appear] open to very different interpretations, and seem at times contradictory.”

It also says the same members worry that the report is “not answering some of the most challenging questions” around New Zealand’s climate-readiness. They appear to blame, in part, the short time period allotted by the government for the inquiry, which opened for submissions on May 23.

On the government’s proposed adaptation framework, the report recommends that it improve the flow of information on climate risks and responses, address market failures hampering resilience efforts, balance central government and local government approaches, and ensure banks and insurers are incentivized to reduce climate risks where they can. Moreover, it calls for better alignment on adaptation across policy areas, such as resource management and emergency response systems.

The government has 60 working days to respond to the report.

Other Stuff

Federal Reserve Bank of New York report finds that nearly 1 million houses and multifamily buildings in New York, New Jersey, and Connecticut are at high flood risk (NY Fed)

Rockefeller Foundation joins G20 Global Alliance Against Hunger and Poverty to advance climate-resilient school meals (The Rockefeller Foundation)

Adaptive Insurance Debuts AI-Powered Parametric Solution

Parametric insurance has emerged as a popular climate resilience tool, enabling claimants to access cash quickly in the wake of extreme weather events without too much messy paperwork. 

Last week, Adaptive Insurance became the latest startup to enter the space with a product — GridProtect — offering fast relief from the impacts of power outages.

“We designed GridProtect to fill a critical void in the market,” says Michael Gulla, CEO and Co-Founder of Adaptive Insurance. “With our AI-powered platform, businesses can now insulate themselves from the financial shock of power outages the moment they occur — less waiting, less uncertainty.”

GridProtect offers parametric insurance for short-duration power outages, paying out agreed-upon amounts to customers “often within just days”, according to Adaptive Insurance’s website.

Adaptive Insurance is a graduate of Montauk Climate, an incubator focused on climate tech. The company joins other startups including Ric and Arbol in offering parametric insurance solutions against extreme weather impacts.

Other Stuff

AI for climate resilience: How Nordic brands can use AI to help with information, optimisation, and prediction (Think with Google)

Update to US precipitation frequency standards now accounts for climate trends (NOAA)

Arya.ag and Gates Foundation champion climate-resilient agriculture at Rith Summit 2.0 (Business News This Week)

Swiss robotic aerial industrial inspections startup takes flight after $12M Series A funding (Tech Funding News)

City of Boston unveils 30 green roofs on bus shelters (City of Boston)

RESEARCH

State of Global Water Resources 2023 (World Meteorological Organization)

Urban Pulse: Identifying resilience solutions at the intersection of climate, health and equity (Resilient Cities Network)

Measuring economic losses caused by climate change (Centre for Economic Policy Research)

Look up and ahead: how climate scenarios affect European sovereign risk (SSRN)

Thanks for reading!

Louie Woodall
Editor