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Hurricane Sandy and Critical Economic Infrastructure

Hurricane Sandy made landfall in Atlantic City at 8pm on Monday, with maximum sustained hurricane-force winds of 80 mph, and the lowest central pressure to hit the region since a 1938 storm that caused damages of $37 billion (normalized USD2005). The combination of storm surge and high tide yielded a surge of 13.7 feet at the Battery New York. Wall Street remained shut down for two days. Transportation was brought to a standstill, with road closures, flooded subways, and closed airports. More than 8 million people lost power and there have been 51 deaths in the US. President Obama declared parts of New York, New Jersey and Connecticut to be major disaster areas, with emergency declarations in 8 other states and the District of Columbia.

Hurricane Sandy presents a teachable moment for policymakers, infrastructure operators, planners and the public. In the coming months we will have better perspective on how well we were prepared and where we need to improve in the future. Three key issues affected by severe storms impact the US economy and the health and safety of our communities: business continuity, access to transportation, and access to electricity.

Taxis in Queens, New York.Source: Keystone USA-ZUMA/Rex Features, from The Telegraph Business Continuity and Economic Impacts

Extreme weather events can damage infrastructure and cause business interruption losses that carry a heavy price tag. Professor Peter Morici of the University of Maryland estimated economic damages from Sandy of $35-45 billion. IHS Global Insight estimates losses of $20 billion in property damages and $10 – $30 billion more in lost business. Business interruption from Katrina was estimated at $42 billion.

Companies undertake business continuity activities to ensure that critical business functions remain available to customers, suppliers and other entities in their network. Business continuity efforts do not wait for disaster to occur – they are performed daily to ensure that service is maintained.

Business interruption losses are expected to increase as the frequency and severity of extreme weather events increase, presenting a challenge to companies across economic sectors. Some companies are starting to question whether they have sufficient insurance coverage for business interruptions, and insurance companies are examining how to properly price such policies.

Climate resilience is the ability to prepare for, recover from, or more successfully adapt to adverse weather events and climate change impacts. Resilient businesses and communities are better able to sustain business continuity due to integrated short- and long-term hazard mitigation, disaster recovery and adaptation planning. According to the Multihazard Mitigation Council, every dollar spent on hazard mitigation saves society an average of $4.

Transportation System Vulnerabilities and Resilience

Disruptions to multi-modal transportation networks impact corporate supply chains, employee access to jobs and public access to health care, education, and shopping. Both operational and infrastructure measures can reduce impacts and minimize losses.

For example, Sandy caused unprecedented damages to the MTA NYC transit system, but these may have been worse without preemptive measures to protect equipment and facilities. As documented in a recent CCAP/EESI report, Climate Adaptation and Transportation, in 2007 a major storm shut down much of the MTA transit system. Following that storm the MTA catalogued deficiencies and identified priorities. Based on these findings, the MTA has started retrofitting infrastructure such as raising subway entrances and ventilation grates, increasing pumping capacity, and modifying the design of new infrastructure (the 2nd Avenue subway will be built to 100-year flood plain standards). The City’s Green Infrastructure Plan and comprehensive adaptation planning efforts also help manage storm water and increase long-term resilience. Additionally, plans now exist for preemptive service shutdown to block off at-risk tunnels and store trains on tracks that were not expected to flood. These improvements were successful in protecting against Irene in 2011; unfortunately Sandy will provide many new lessons in how the NYC transit system can enhance climate resilience.

An emergency dam erected across train tracks in Harlem, New York. Source: MTA New York City Transit, EPA/MTA/LEONARD WIGGINS, from The Telegraph

CCAP works to identify ways to enhance transportation resilience system. Our blog series, ‘What Does Climate Resilience Look Like?’ shows that planners can implement large scale infrastructure projects to protect against flooding and sea level rise in order to reduce impacts to road, rail, subways, and air travel. Similarly, changes in land use can alter transportation siting to avoid high-risk areas. The US Department of Transportation provides technical assistance to transportation planners prepare for climate change impacts. Additional capacity building is needed to help planners integrate climate resilience into asset management and planning processes. Detailed policy recommendations are given in the CCAP/EESI report.

Electricity Delivery and Extreme Weather

The resilience of the electric power grid can be enhanced through a series of technological and operational improvements. Smart grid technologies such as advanced fault-detection systems can pinpoint grid problems, allowing faster and more efficient deployment of repair crews. Smart systems can facilitate rerouting of power around problem spots, reducing outages for consumers.

With smart metering, utilities can learn which customers do and don’t have power more effectively than from customer reporting and service crew reports. When an extreme weather event prevents adequate power from reaching a given area, demand response can reduce the loads on surviving infrastructure, reducing potential instabilities that could cause power cuts to consumers beyond the damaged portions of the grid.

A number of utilities have already begun to deploy smart grid technologies to address disaster mitigation. Since Hurricanes Katrina and Rita, Entergy Louisiana has deployed smart grid technologies to better reroute power when feeder lines are damaged – also important because the utility is heavily reliant upon nuclear power plants that are normally shut down in advance of potentially damaging weather events. S&C Electric Company in Chattanooga, Tennessee’s has implemented a system to automatically reroute power around faults to keep power flowing to as many customers as possible. By minimizing power losses and improving response times, such preparedness can limit business disruptions and support continuity for a broad array of customers.

Think Locally, Act Locally

It’s not just about the polar ice caps anymore. The “inconvenient storm” leads to the blackouts, road closures, and sewer overflows. Sandy’s devastation served as a reminder for policymakers that hazard mitigation and long-term infrastructure improvements should be appropriately planned for and funded. Billions of dollars can be saved, and lives and get back to “normal” more quickly by planning ahead.

To be truly ahead of the storm, hazard mitigation and capacity building need to receive the necessary resources to properly equip and protect our communities. When coordinated with broader resilience and prosperity goals, sustainable infrastructure investments are not expensive band-aids, but rather the building blocks of a vibrant future.


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