RECAP: Long-Term Recovery Briefing, 9/28/18

Once again, the Institute’s expert council focused on long-term recovery, resilience, and community transformation convened to discuss the ongoing realities of recent disasters.

Spotlight #1: The Problem of Calculating Disaster Costs

One of the issues that has plagued disaster response and recovery over the past decade is the problem of calculating the costs of disasters. The National Centers for Environmental Information provides this overview of how disaster costs are currently calculated.

Based on these numbers, three of the five most costly disaster happened last year, and combined with the wildfires, cost over $300 billion.

Hurricane Katrina (August 25-30, 2005)

Category 3 hurricane initially impacts the U.S. as a Category 1 near Miami, FL, then as a strong Category 3 along the eastern LA-western MS coastlines, resulting in severe storm surge damage (maximum surge probably exceeded 30 feet) along the LA-MS-AL coasts, wind damage, and the failure of parts of the levee system in New Orleans. Inland effects included high winds and some flooding in the states of AL, MS, FL, TN, KY, IN, OH, and GA.

CPI Adjusted Cost (in billions): $165.0CI

Deaths: 1833

Hurricane Harvey (August 25-31, 2017)

Category 4 hurricane made landfall near Rockport, Texas causing widespread damage. Harvey's devastation was most pronounced due to the large region of extreme rainfall producing historic flooding across Houston and surrounding areas. More than 30 inches of rainfall fell on 6.9 million people, while 1.25 million experienced over 45 inches and 11,000 had over 50 inches, based on 7-day rainfall totals ending August 31. This historic U.S. rainfall caused massive flooding that displaced over 30,000 people and damaged or destroyed over 200,000 homes and businesses.

CPI Adjusted Cost (in billions): $127.5CI

Deaths: 89

Hurricane Maria (September 19-21, 2017)

Category 4 hurricane made landfall in southeast Puerto Rico after striking the U.S. Virgin Island of St. Croix. Maria's high winds caused widespread devastation to Puerto Rico's transportation, agriculture, communication and energy infrastructure. Extreme rainfall up to 37 inches caused widespread flooding and mudslides across the island. The interruption to commerce and standard living conditions will be sustained for a long period, as much of Puerto Rico's infrastructure is rebuilt. Maria tied Hurricane Wilma (2005) for the most rapid intensification, strengthening from tropical depression to a category 5 storm in 54 hours. Maria's landfall at Category 4 strength gives the U.S. a record three Category 4+ landfalls this year (Maria, Harvey, and Irma). A reanalysis on the number of deaths due to Maria is being conducted and will be updated in the coming months.

CPI Adjusted Cost (in billions): $91.8CI

Deaths: 65

Hurricane Sandy (October 30-31, 2010)

Extensive damage across several northeastern states (MD, DE, NJ, NY, CT, MA, RI) due to high wind and coastal storm surge, particularly NY and NJ. Damage from wind, rain and heavy snow also extended more broadly to other states (NC, VA, WV, OH, PA, NH), as Sandy merged with a developing Nor'easter. Sandy's impact on major population centers caused widespread interruption to critical water / electrical services and also caused 159 deaths (72 direct, 87 indirect). Sandy also caused the New York Stock Exchange to close for two consecutive business days, which last happened in 1888 due to a major winter storm.

CPI Adjusted Cost (in billions): $72.2CI

Deaths: 159

Hurricane Irma (September 6-12, 2017)

Category 4 hurricane made landfall at Cudjoe Key, Florida after devastating the U.S. Virgin Islands - St John and St Thomas - as a category 5 storm. The Florida Keys were heavily impacted, as 25% of buildings were destroyed while 65% were significantly damaged. Severe wind and storm surge damage also occurred along the coasts of Florida and South Carolina. Jacksonville, FL and Charleston, SC received near-historic levels of storm surge causing significant coastal flooding. Irma maintained a maximum sustained wind of 185 mph for 37 hours, the longest in the satellite era. Irma also was a category 5 storm for longer than all other Atlantic hurricanes except Ivan in 2004.

CPI Adjusted Cost (in billions): $51CI

Deaths: 97

Unfortunately, there are multiple challenges with this methodology. Puerto Rican economist Heidi Calero, for example, calculated that the costs of Irma and Maria to Puerto Rico exceeded $165 billion. Similarly, other economists have calculated widely ranging cost estimates.

There are multiple reasons for this:

  • How to capture the “hidden” replacement costs that individuals fund through their savings and rainy day funds?

  • How to capture the opportunity costs of deploying capital for repair, rebuild, and resilience investments that could have been deployed for new projects?

  • How to capture ongoing disaster impacts on branding, public perceptions, customer behavior, travel and tourism, and supply chains?

  • How to capture informal economic activities and impacts?

These issues dramatically affect emergency supplemental funding, planning, budgeting, and resource allocation.

One solution that emerged from the discussion is to perhaps develop two numbers – (1) a repair and replacement cost estimate, and (2) a resilience and recovery cost estimate.

Feedback about this idea is welcome.

Spotlight #2: Agricultural Challenges in Puerto Rico

93% of Puerto Rico’s food is imported. Ana Rodriguez, the CEO of an agribusiness incubator called Agroinnova, is working to change this by helping entrepreneurs in the Caguas area of the island to develop their skills and capabilities in this sector.

Grocery chains, hotels, restaurants, other business sectors and export markets would welcome the growth of this sector on the island, but many challenges exist including:

  • The need for agronomists

  • Business mentors

  • Technical expertise

  • Specialized equipment

  • Reliable and affordable energy

Agroinnova is open to developing cooperative relationships with mainland companies and academic institutions and hosting skilled volunteers and pro bono experts.

For more information, email Ana Rodriguez.