A coalition of insurers, public officials, risk experts, builders, and conservation groups unveiled a blueprint of policy changes and what it calls "common-sense actions" that could reduce economic losses from future storms and rising sea levels by as much as half along U.S. coastlines. The coalition urged the Obama Administration, Congress, local leaders, and the private sector to implement these actions through regulation, investment, education, and other means.

"Our coasts are threatened, there are reasonable steps to counter those threats, and we as a nation are not yet taking them," states the Resilient Coasts Blueprint. "Evidence shows we can reduce our risks and our costs by 50 percent or more." The report identifies critical steps such as fine-tuning climate risk models to predict rising seas and powerful storms; preserving vital, storm-buffering wetland areas; and strengthening building codes to reduce hurricane losses.

Directed by The Heinz Center and Ceres, the blueprint was endorsed by a diverse group, including The Travelers Institute, The Nature Conservancy, National Oceanic and Atmospheric Administration, the Wharton School, and the mayor of Charleston, S.C.

"The people of Charleston, South Carolina, are already combating rising seas," said Charleston Mayor Joe Riley, noting that 1 foot of sea level rise would inundate some of the state’s shoreline areas up to a half-mile inland. "Charleston is one of our nation’s treasures, and without serious action today to confront these risks it—and many other American cities—faces an uncertain future. The pressures on our coast will continue unabated, making regional planning essential to shape growth and to protect our social, economic, and natural well being."

A 2008 assessment by the Wharton School’s Risk Center shows fast-rising economic losses worldwide from hurricanes and other natural catastrophes, with many of the biggest impacts along coastal areas. Losses have increased from just more than $50 billion in the 1950s to nearly $800 billion in the 1990s, with about $620.6 billion so far in the current decade. Last year’s losses exceeded $200 billion, including $40 billion in losses from Hurricanes Gustav and Ike in the United States alone.

"Investors are increasingly exposed to economic losses fueled by coastal development that ignores the intensifying hazards from rising sea levels and stronger coastal storms," said Mindy S. Lubber, president of Ceres, a coalition of investors and environmental groups working on sustainability challenges such as climate change. "Reducing risks along the coasts will protect vulnerable populations and the long-term value of investments at the same time."

Noting that the Gulf and Atlantic Coasts have nearly $9 trillion of insured coastal property, coalition members called on investors to take stock of their coastal exposure, especially in real estate and infrastructure, and for banks to include climate risks in lending- and investment-related due diligence.

"The Travelers Institute’s support of the Resilient Coasts Initiative reflects its deep belief that loss mitigation, strong and well-enforced building codes, and sensible land use planning are critical to reducing risk to life and property as well as to making private insurance more plentiful in coastal areas," said Joan Woodward, Travelers executive vice president of public policy. "Because of the critical nature of its work, the Resilient Coasts Initiative is the first project to receive the support of the newly created Travelers Institute, which was established to participate in public policy dialogue on matters of interest to the insurance marketplace and contribute to solutions on a wide range of issues that face our customers and the communities we serve."

The Resilient Coasts Blueprint’s specific recommendations include the following:

  • enable planning for climate impacts by providing the necessary science and decision-making tools;
  • require risk-based land use planning;
  • design adaptable infrastructure and building code standards to meet future risk;
  • strengthen ecosystems as part of a risk mitigation strategy;
  • develop flexible adaptation plans;
  • maintain a viable private property and casualty insurance market; and
  • integrate climate change impacts into due diligence for investment and lending.

An increasing number of studies underscore the value of reducing coastal vulnerabilities. A Wharton study concludes that homeowners in Florida could reduce losses from a severe hurricane by 61 percent, resulting in $51 billion in savings, simply by building to strong construction codes. South Carolina, New York, and Texas would see savings of 44 percent, 39 percent, and 34 percent, respectively, according to the same study.

Similarly, the National Institute of Building Sciences shows that every dollar spent on mitigation saves society about four dollars on recovery costs. Despite this evidence, nearly all U.S. coastal cities and towns lack adequate land use requirements and building code standards to realize these savings.

The blueprint cites the example of 500 commercial clients of the insurer FM Global, which experienced about 85 percent less damage from Hurricane Katrina as similarly situated properties. The reduced losses were directly the result of building retrofits and other hurricane loss prevention and preparedness measures taken by the insurer’s 500 policyholders. The investment return was striking—a $2.5 million investment in loss prevention resulted in $500 million in avoided losses.

The blueprint comes as debate is intensifying in Congress over climate adaptation. The recently announced draft Waxman/Markey climate and energy bill would require states and federal agencies to develop climate adaptation plans, create dedicated funds for ecosystem adaptation efforts, and establish a National Climate Service to create climate data and adaptation support tools for local governments.

"It is high time to address the impacts of severe weather and rising seas on the lives and livelihoods of coastal citizens," said the Heinz Center’s Callahan. "This blueprint provides thoughtful, multi-sector guidance as Congress defines a national strategy for a more resilient future."