On the heels of the 2009 hurricane season, a coalition of insurers, public officials, risk experts, builders, and conservation groups have released a blueprint of policy changes and common sense actions likely to reduce hurricane-related economic losses along U.S. coastlines by as much as half. The coalition urges the Obama administration, local leaders, and the private sector to implement the actions, outlined in the report, "Resilient Costs: A Blueprint for Action," through regulation, investment, and education.

“Every time a major hurricane hits—Ike is the most recent; Katrina is the most memorable—we go through this teeth gnashing and say, ‘How could this be?’ All of a sudden we feel like we are in a third-world country. Aren’t we smart enough to make it so it’s not so bad?” asks Christophe Tulou, director of the Resilient Coast Initiative at the Washington, D.C.-based nonprofit The H. John Heinz III Center for Science, Economics, and the Environment, which co-authored the report. “We need to better protect ourselves by mitigating our risks. This isn’t rocket science.”

The blueprint’s recommendations include:

  • Designing adaptable infrastructure and building code standards to meet future risk;
  • Integrating climate change impacts into due diligence for investment and lending;
  • Requiring risk-based land use planning;
  • Maintaining a viable private property and casualty insurance market;
  • Developing flexible adaptation plans;
  • Strengthening ecosystems as part of a risk mitigation strategy;
  • Enabling planning for climate impacts by providing the necessary science and decision-making tools.

A growing number of studies underscore the value of reducing coastal vulnerabilities. For instance, a study by the Wharton School of the University of Pennsylvania says that homeowners in Florida could reduce losses from a severe hurricane by 61 percent—resulting in $51 billion in savings—by building to strong construction codes. Likewise, South Carolina, New York, and Texas would see savings of 44 percent, 39 percent, and 34 percent, respectively. Yet, nearly all U.S. costal cities and towns lack adequate land use requirements and building code standards to realize these savings.
“Resilient Coasts” details a cast of characters who can all contribute to reducing financial loss. At the top of the list: insurance companies. The report states that it’s critical to maintain a private property and casualty insurance market by allowing private insurance companies to set risk-based premiums that thereby communicate the cost of the risk to consumers. Additionally, the insurance industry must give appropriate consideration and weight to the demonstrable reduction in risk provided by improving building standards and other risk mitigation efforts.

Developers also are a big part of the solution. “One of the basic lessons we came up with in our report is that where it’s really hazardous, don’t build there. And if you are going to build near coasts where the wind is really strong, make sure the roof stays on,” Tulou says.

Of course, staying away from valuable coastal property is a tough sell for the real estate sector. But there is scientific evidence to give developers pause. “What we are finding from climate scientists is that where that water and land come together, in some places, that is going to be a half-mile inland from where it is now within the lifetime of that condo or apartment building,” Tolou says. “That’s particularly true along the Gulf Coast and the East Coast where land is sinking at the same time sea levels are rising.”