Whether you or your colleagues “believe” in man-made Climate Change or not, everybody has to acknowledge we are experiencing more extreme weather events and changes in climate, impacting the operations, sales, infrastructure, and personnel of all entities: businesses, governments, non-profits, etc. These effects are severe and can knock a facility off-kilter for many months, if not be an existential issue.
Is this a real concern? It sure is. In 2020, the US experienced 22 separate billion-dollar disasters caused by severe weather or climate, resulting in 262 fatalities and $95 billion in financial losses. The severe winter storm in Texas in 2021 alone caused 210 fatalities and $129 billion in product losses. The trend is worsening. It can affect almost any entity. History shows how these intense events have become more common in recent years. Thus, it is important to consider these effects on operations and plan.
How can one assess risks due to extreme conditions to make business-wise decisions?
First, we need to define the risks. Simply put in terms of direct effects, these come in two categories. One is short-term from extreme weather developing quickly and locally: hurricanes, tornadoes, intense rain, winds. The other is longer-term, infrastructure-related, and climate-related: droughts, perpetual flooding. Which of these is your facility most vulnerable to? How might these affect your operations? Safety of personnel? Ability to grow crops? Ability to transport in raw materials and out product?
What you can do is develop a Climate Risk Vulnerability Assessment (CRVA), a study of your facilities and operations to identify, quantify, and provide solutions to lower the risk of a climate-related hazard from affecting operations.
The first step in developing a CRVA is to assess the potential for risk. What are the hazards your facilities and operations are vulnerable to? Are any in areas with historic hurricane or floods before? Meteorologists, geologists, and hydrologists can estimate risk by determining, for example, 100-year flood risks, storm surges, hurricanes. Historic meteorological data exists to perform an initial analysis. Together with this, the CRVA would need to estimate the potential effect of, say, a 100-year flood on operations. What operations, equipment, or portion of the facility might become non-operational?
The next step in the CRVA is to assess a facility’s infrastructure to determine if it is still adequately protected from identified potential natural disasters. Mechanical and civil engineers can help in such an assessment. For example, is water management systems still appropriate for more severe rainfall or was the new, large rainfalls not planned for back then? Is key equipment located in areas that may be at risk due to an extreme event (a key generator, boilers, or operational equipment)?
The next step is to conduct a consequence analysis. If a flooding of X inches of rain in Y hours occurs, which buildings, equipment, and operations are likely to be vulnerable and how, quantitatively, could affect production, business, and lives?
The final part of a CRVA is to develop a list of steps that would minimize potential damage to a vulnerable area based on the consequence analysis. These might include larger water management systems to take water away from a building or moving key equipment to higher floors, monitors and/or better communication so staff is aware of sudden changes, etc. Planning is great, but an action plan is also needed to prioritize options and actually implement them to reduce long-term catastrophic risk.
This is all very logical and most engineers certainly understand the notion of risk and to invest ahead of time to reduce risk. However, many entities are run by people who either ignore risk or insist on a direct financial benefits analysis. What is the payback? How much will a project gain for the entity? For reducing climate risk, it is possible that there will never be an extreme incident at the location in question; the investment has no direct return. Although with the frequency of such catastrophic incidents growing, it is impossible to ever say there is no risk of loss; extreme loss avoidance planning is as important as immediate return. People who control purse strings and think short-term need to be educated on the importance and value of risk reduction for a firm’s long-term viability.
CCES has the experts to help your entity evaluate climate and severe weather risk and work with you to develop and implement smart strategies to reduce such risk for a reasonable cost. Contact us today at karell@CCESworld.com or at 914-584-6720.