- A wildfire in Colorado highlights the value of pre-emptive measures, showing that properties prepared by Wildfire Partners faced significantly less damage.
- Effective risk management practices, such as using fire-resistant materials and maintaining clear yards, can dramatically increase property safety and value.
- International examples from Vietnam and the Philippines demonstrate high benefit-cost ratios for local adaptation measures, underscoring global economic advantages of disaster prevention.
On 8 July 2016, a poorly extinguished campfire ignited a wildfire near Nederland, Colorado.
No one died, but two thousand people evacuated and eight houses completely burned, leaving mainly ashes. Eight other houses in the torched forest survived almost unscathed.
They were certified by Wildfire Partners, a local organisation supporting homeowners in enacting pre-wildfire risk reduction.
Key actions for retrofitting, climate adaptation, and managing properties to avoid burning in a wildfire might be estimated in the tens of thousands of dollars. Properties affected are generally in the million-dollar range.
In Colorado’s mountain forests, a major conflagration (a fire that burns over a large area) over the lifetime of a house is a near certainty. Even if the immediate measures cost 10% of a house’s current value and annual maintenance requires 1% of a house’s value, investing in direct damage prevention easily pays back over decades.
This calculation does not even account for the costs of alternative accommodation during rebuilding, the augmented costs of replacing possessions as new-for-old, any increases in insurance premiums and excesses, the owners’ stress-related health costs, and their lost work productivity while dealing with their personal disaster.
Acting to save money
Many of the required measures are straightforward and relatively low-cost, easily implemented by the homeowner or local contractors.
A fit person can store woodpiles away from the house on non-combustible surfaces such as tiles while keeping the yards clear of burnable vegetation.
More professional skills and higher expenditures might be needed to select materials for decks, porches, and fences that will not easily ignite while closing gaps in walls and roofs to prevent embers from drifting in.
Significant knowledge and investment enable the use of fire-resistant materials and construction techniques for roofs, windows, and doors.
The key is that homeowners can act, getting to know their property better and doing much better for their assets and for themselves.
Taking action can reduce risk, increase safety, and increase the asset’s value. However, it is important to understand that even taking action does not ensure that a disaster will be avoided.
Insurance remains essential, as does evacuation planning, with the physical readiness and psychological acceptance to get out at a moment’s notice, knowing that, when you come back, it might mean rebuilding everything from scratch.
Risk and asset managers need not focus on only individual actions.
Community and governing changes also save money by avoiding disasters.
Coastal afforestation in Vietnam dampened waves reducing storm damage and offered fish habitat for livelihoods.
A 2011 calculation considering a 7.23% discount rate from 1994-2025 predicted a benefit-cost ratio of 19 to 69 across communities.
In the Philippines, highly localised measures ranging from tree planting to constructing a footbridge across a river produced benefit-cost ratios of 14 to 30 over 4-to-12 years when considering river flooding and mudflows.
Both countries experience frequent tropical cyclones and landslides too.
Data for climate adaptation and retrofitting
Not all initiatives are immediately calculable. Many are, or verifiable estimates could be made, as long as the data, skills, and expertise are available.
How physical risks change as the climate does can be measured, leading to approximations of asset losses under different scenarios.
With the expertise to obtain, process, and analyse the needed data, the cost of retrofitting and climate adaptation can be determined, indicating how losses could be reduced.
Actions to consider include an iterative and continuing process of:
- Evaluate assets and assess the impacts of specific hazards such as drought, extreme heat, flooding, storms, subsidence, and wildfires.
- Analyze available data and services such as Climate X's to understand unknowns and uncertainties, estimate the costs and benefits of risk reduction, and compare these to the costs of inaction.
- Implement strategies to mitigate risks, including proactive investments in property safety, revising asset portfolios, and advocating for supportive legislative and policy changes.
Climate X climate solutions enable you to assess your portfolio physical risk exposure with Spectra, and calculate CapEx requirements for adaptation with Adapt.
- Analyze past physical risks and trends at asset locations, alongside past climate trends and variabilities.
- Project future climate trends and their impact on physical risks under various climate change mitigation scenarios.
- Assess current and projected costs of climate adaptation and retrofitting, considering local hazards such as coastal flooding, drought, extreme heat, landslides, storms, and wildfires.
The evidence shows that preventing disasters saves lives, livelihoods, health, and quality of life. It also saves money, for property owners and for asset managers.
Reducing physical risks and using data for climate adaptation and retrofitting is not a cost. It's an investment.
