Helping Cities Stand in the Face of Disaster
Weekly Article
April 30, 2015
After a disaster strikes a city, the public costs can be enormous. When Superstorm Sandy tore through the Northeastern United States in 2012, it did an estimated $50 billion in damages, a number more than doubled by hurricane Katrina a few years before. We frequently bandy such numbers about in the wake of natural disasters and other catastrophes, but we rarely talk about who foots these enormous bills—and how such daunting figures can be kept in check.
These questions were at the heart of a recent panel discussion on the design and practice of resilient cities held during New America’s annual conference. In the context of urban settings, resilience involves planning for, responding to, and recovering from risks, as Pamela Puchalski, a non-resident fellow with the Metropolitan Policy Program of the Brookings Institution, explained. Thus, resilience is all about helping cities prepare for the worst and respond appropriately when it arrives. Moreover, resilience is, as panel moderator Sharon Burke of New America put it, “a strategy,” a way of actively approaching problems instead of simply passively responding to them when they occur.
Surprisingly, insurance companies may play an important part in helping cities become more resilient. Inevitably, someone picks up the cost of catastrophes, but those expenses can be difficult to track, in part because we have traditionally failed to put a price on them before they begin piling up. Nikhil da Victoria Lobo of Swiss Re Financial Services Corporation proposed that to combat this dilemma we need to work more directly on providing insurance for the public sector.
As Puchalski noted, many governments are effectively broke, making it difficult for them to pay for the costs of recovery. Accordingly, problems can sometimes accumulate, leaving cities increasingly ill-prepared for each new event that befalls it. Public sector insurance, Lobo suggested, can help offset these otherwise crippling expenses, allowing cities to respond without further draining their already depleted coffers.
Perhaps more important, however, is the role that insurance companies can play before a catastrophe occurs in the first place. Because it is in their interest to reduce their own costs when they have to pay out on a policy, it is also in their interest to help cities better prepare for the eventualities against which they are insured. The “first focus” of a public sector insurance company, Lobo said, is to ask its policyholders, “What can you do before the disaster strikes to minimize its impact?” When insurance companies work to help answer these questions, he suggested, everyone benefits. In the process, they can also help to reduce ongoing costs. Indeed, better preparedness doesn’t just save lives, he explained; it also lowers premiums. What’s more, by working with cities, companies can help make otherwise mystifying costs—like those behind the dizzying estimates attached to Katrina and Sandy—more transparent to the public.
Naturally, insurance companies are not the only organizations working to help cities prepare themselves. Maxwell Young spoke to the ways that 100 Resilient Cities—a project of the Rockefeller Foundation for which Young serves as director of global communications—strives to help their urban partners prepare for a wide range of dilemmas. No two cities are exactly alike in the dangers they face or in the steps they must take to respond to those dangers. While climate change presents ever developing threats to many metropolitan areas, it is but one concern among many. Young pointed to Bangalore, a city that used to have thousands of lakes, many of which have been paved over in the name of development. Today, Bangalore cycles through regular periods of flooding and drought because these once flexible basins are no longer available.
To account for these varied threats, 100 Resilient Cities distinguishes between acute shocks and chronic stresses. The former encompasses a wide range of sudden catastrophic events, from earthquakes and floods to epidemics and terrorist attacks. Here, resilience might, for example, entail reconsidering building codes, and implementing them more accurately. Chronic stresses, by contrast, include problems such as ineffective transit systems, chronic food shortages, unemployment, and other similar factors, the long term costs of which can be higher than the price of responding to them. Resilience against chronic stresses might involve repairing damaged roads, and otherwise addressing underlying concerns, efforts that can also contribute to long term disaster preparedness.
Because there is no single solution to the problem of preparedness, and because each solution has multiple facets, 100 Resilient Cities advocates the hiring of chief resilience officers, public servants who help to coordinate the varied efforts of their cities. Young noted that the cities his organization works with have been “very receptive to our suggestions.” Nevertheless, he added, these are the cities who applied for help, meaning that they were already aspiring toward resilience. In countless cities, climate change and pressing crises continue to be largely unthought risks. These problems will, he suggested, loom silently until we begin to make a more universal commitment to resilience.
Speaking along similar lines, Lobo observed that he doesn’t think the public sector insurance industry is really shaping the way people respond to disasters yet. Though they’re trying to close the gap, at present market “penetration is so low” that it’s difficult to suggest that they’re making a difference on a truly widespread scale.
Such limitations to the scope of resilience efforts might seem grim. Indeed, after the devastating earthquake that struck Nepal on Saturday, April 25, many have suggested that infrastructural problems contributed almost as much to the disaster as geological ones. While the calamity could never have been fully averted, it might have been ameliorated by a more thoroughgoing commitment to resilience, a commitment that few urban centers have made. Closing off the panel, Burke noted that resilience was still “a very uplifting topic.” The very fact that such issues are being discussed, she suggested, means that someone is trying to solve the problem.
This article originally appeared in New America’s Medium publication, Context.