All posts tagged 'storm surge'

Call for Comments on the Third National Climate Assessment

February 2, 2013 00:46
by J. Wylie Donald

The draft “National Assessment of Supply Chain and Other Developing Risks” was issued just last month. It outlined increasing threats to infrastructure, food and water supplies, air quality, national security, public health and public safety, and ecosystems. It also discussed measures to reduce those risks and to address them. In short, the Assessment should be required reading for everyone involved in planning a company's response to the things that could destroy the company. Only it won't be because of one small detail. That title, the "National Assessment of Supply Chain etc.," is a fabrication.  The real title is the draft Third National Climate Assessment Report (Assessment).  (It's 147 MB so here's the Executive Summary too.)  Thus, for many companies, the report will be shunted to the EH&S office and the C-Suite will remain oblivious. This is unfortunate.

"National climate assessments act as status reports about climate change science and impacts."  Their legal basis is the Global Change Research Act of 1990 (codified at 15 USC §§ 2921-61), which mandates periodic reports to the President and Congress evaluating the findings of the U.S. Global Change Research Program (USGCRP).  Under the USGCRP the effects of global change (not just climate change) on all facets of the nation (including agriculture, energy, water resources, human health and ecoystems) are analyzed.  Trends are reviewed and projected for up to 100 years.  “The NCA aims to incorporate advances in the understanding of climate science into larger social, ecological, and policy systems, and with this provide integrated analyses of impacts and vulnerability.”  The last National Climate Change Assessment was in 2000.

What is particularly rewarding in the Assessment is that it gets right down to the nitty-gritty.  We have picked only one topic to focus on, Transportation, but one could take a deep dive in over a dozen.  Ports are obviously at risk from sea level rise, but some might think that is manageable because sea level is only changing gradually, even if the worst predictions are accepted.  If it were only that simple.  "When sea level rise is coupled with intense storms, the resulting storm surges will be greater, extend farther inland, and cause more extensive damage."  Draft at 200.  Even without sea level rise, the increase in extreme weather and flooding will result in increased sedimentation.  "Channels that are not well maintained and have less sedimentation storage volume will thus be more vulnerable to significant, abrupt losses in navigation service levels."  Id

Climate change predictions also include increasing temperatures, but so what?  The Assessment offers the following:  "expansion joints on bridges and highways are stressed and asphalt pavements deteriorate more rapidly at higher temperatures.  Rail track stresses and track buckling will increase.  Lift-off limits at hot-weather and high-altitude airports will reduce aircraft operations."  Draft at 197.  Each of these conclusions is referenced to research.  Airports too are not out of harm's way.  Thirteen of the nation's largest airports have at least one runway within 12 feet of current sea level.  Draft at 201.  Readers will remember that the storm surge from Sandy was 14 feet in New York.  Draft at 203.  They may not remember that the storm surge from Katrina was 15 feet along the entire Mississippi coast, and much higher in some places (like an "astonishing 27.8 feet at Pass Christian, Mississippi").  Our business is not freight forwarding or overnight delivery but we bet that those running such businesses pay close attention to the reliability of their transportation routes.  If supply chains matter, one needs to be looking at roads, rails, ports and airports, and we mean locally, as well as abroad.

The Assessment is a trove of information and provides citations to the vulnerability studies of numerous cities and states, including Boston and New York City, California, Iowa, Massachusetts, Michigan, Washington, and Wisconsin, which have already begun assessing their transportation vulnerabilities.  Draft at 209.  Although there is a lot of information out there, the Assessment also sounds a note of caution in preparing:  "Impacts of climate on transportation system operations, including safety and congestion, both on road systems and in aviation, have been little studied to date."  Draft at 213.  "[E]xisting models used for snow and ice removal procedures are no longer reliable, requiring better monitoring and new models, as well as better roadway condition detection systems."  Draft at 211.  This uncertainty, however, should not be a reason to do nothing.  As the Assessment states, preparation helps a lot:  " the vulnerability analyses prepared by the metropolitan New York authorities [prior to Sandy] provided a framework for efforts to control the damage and restore service more rapidly."  Draft at 204.

Another approach taken by the Assessment is to comment on the impacts from climate change that can be expected in various areas of the country such as more hot days, or more heavy precipitation (or more drought depending on location). For businesses that don't include weather considerations in their planning, the Assessment won't change anything:  heavy rains have come since the dawn of time and humans have responded. But for those that do any sort of weather preparation and planning, the Assessment points out what extreme weather means, and thus suggests what steps might be worth taking.

For example, torrential rains from Hurricane Irene in Vermont damaged over 500 miles of state-owned roadways and 200 bridges. Draft at 554.  Some communities were isolated for days. Id. Why should people in the Northeast take notice?  Because "between 1958 and 2010, the Northeast saw a 74% increase in the amount of precipitation falling in very heavy events." Draft at 551. In other words, the fate of Vermont is increasingly likely to be the fate of others.

And this is a fundamental feature of climate change.   "Climate change is statistical weather, and manifests itself as a change in the frequency of events that would still occur (but with lower frequency) in the absence of climate change."  Draft at 218. The risk of untoward events is increasing. No one will be able to point to a flood or a hurricane or a heat wave and say this is climate change-related. But that is not necessary, or even relevant. As the risk increases, prudence requires that one spend more time and expense thinking about and countering the risk.  The Assessment is a good place to start.  And a good first step to start one's thinking would be to submit comments on the report.  The deadline is April 12.

Climate Change | Climate Change Effects | Rising Sea Levels | Weather

Delaware Advisory Committee Suggests Mandatory Disclosure of Rising Sea Levels in Real Estate Contracts

January 14, 2013 17:09
by J. Wylie Donald

If the State dropped a notice in the mail advising you that 10% of your property was going to be condemned without compensation, you would immediately hire a lawyer, seek out the press and raise holy **** about the trampling of individual rights, justice and the Constitution. That is the situation in which Delaware contemplates finding itself, but the Constitution is no salve.  Rising sea levels of between 0.5 and 1.5 meters are predicted to inundate between 8% and 11% of the state's land area by 2100.

Delaware, however, is not one to tear its clothes and beat its chest in lamentation; instead, it is acting. Last July, the Delaware Sea Level Rise Advisory Committee published Preparing for Tomorrow's High Tide:  Sea Level Rise Vulnerability Assessment for the State of Delaware. Besides providing background about sea level rise and the methodology of vulnerability determinations, it looked at 79 resources in the state and assessed the impact of rising sea levels. Sixteen of those resources were assessed as being of high concern statewide.

To quote the Executive Summary:

"Within those potentially inundated areas lie transportation and port infrastructure, historic fishing villages, resort towns, agricultural fields, wastewater treatment facilities and vast stretches of wetlands and wildlife habitat of hemispheric importance."

"[E]very Delawarean is likely to be affected by sea level rise through increased costs of maintaining public infrastructure, decreased tax base, loss of recreational opportunities and wildlife habitat, or loss of community character."

From roads to wetlands to tourism, Delaware now has a basis to marshal its resources, and its polity, and move forward into the next phase:  adaptation planning.

The United Nations Framework Convention on Climate Change defines "adaptation" thus: "Adaptation refers to adjustments in ecological, social, or economic systems in response to actual or expected climatic stimuli and their effects or impacts. It refers to changes in processes, practices, and structures to moderate potential damages or to benefit from opportunities associated with climate change."  Delaware's focus is to "identify ways that government, businesses and citizens can adapt their policies and business practices to reduce the impact of seal level rise on our state's citizens, economy, and natural resources."

The committee has wasted little time in taking action on the vulnerabilities identified in July. As reported in Delaware Online, last Thursday the committee offered up for public comment this question:  "whether property owners selling inside boundaries where seas are predicted to rise will have to disclose that vulnerability to potential buyers."  Hearings will begin in February.  Currently, disclosure of a property's location in a flood zone is required, but flood zones are based on the historical record. Requiring a disclosure about a prediction for the future is new.

One can quickly see a few of the implications. First, all things being equal, some will be dissuaded from purchasing, demand will drop and prices will fall. How much and when is anybody's guess.  Second, the drawing of the sea-level-rise boundary may be intensely litigated. Indeed, we have already seen one ocean front property rights case, Stop the Beach Renourishment v. Fla. Dep't of Envtl. Protection, 130 S. Ct. 2592 (2010), make its way all the way to the Supreme Court. Third, realtors, real estate lawyers and other professionals involved in shore transactions will be pleased by this development as the liability for non-disclosure will be much harder to pin on them.  An injured property owner likely will find it difficult to assert an adviser's failure to disclose the risk was the proximate cause of his or her injury.  See J. Wylie Donald, Getting Ahead of Storm Surge, Especially in the Era of Climate Change.  

Fourth, and perhaps most significantly, this small step will set the stage down the road when questions of compensation arise for individuals and entities harmed by rising sea levels. Buyers with such a disclosure in their contracts will be hard-pressed to claim ignorance. That in turn is likely to figure into the public discussion of fairness and the right to compensation.

Of course, the committee's raising the point for discussion does not mean anything is going to change.  But, with the dialogue initiated, we expect that this issue will no longer be quietly ignored.  In any event, we look forward to further discussion in February.

Climate Change | Climate Change Effects | Regulation | Rising Sea Levels

Storm Surge in Your Lobby: You Should Have Been Thinking About Hurricane Isaac Months Ago

August 28, 2012 10:43
by J. Wylie Donald

12 feet.  Water that deep comfortably inundates the front office's front door and floats the boss's desk.  And that is the predicted maximum storm surge for coastal Louisiana and Mississippi as Hurricane Isaac bears down.   So there are likely to be a few problems in that part of the country by the time the sun goes down this afternoon.  What can be done?  At this late hour, very little unfortunately, other than heading for the hills; here the adage “an ounce of prevention is worth a pound of cure” says it all.

Other than sand bags and plywood sheeting what preventive steps have some taken?  We’d like to focus on some things lawyers and businesspeople can address ahead of time:  modeling, insurance and contracting.

Modeling – Besides wreaking record havoc, Hurricane Andrew in 1992 was the coming of age for catastrophe modelers. As reported by Business Insurance last week, when AIR Worldwide reported an estimated $13 billion in damage to its clients following the storm's passage, reaction ranged from “skepticism to outrage.”   Now modeling is big business and well accepted.  Indeed, modeling was approved by the Maryland Court of Appeals as an appropriate way to make business decisions in January of this year.  See People's Insurance Counsel Division v. Allstate Insurance Co., 36 A.3d 464 (Md. 2012). There is no reason to believe that Maryland’s lead would not be followed elsewhere.

Today the public can get the benefit of some of the modelers’ insight in email alerts from companies’ such as AIR, or simply downloading them from the internet.  Those following Hurricane Isaac were able to learn that its ultimate effect was unsettled: 

Isaac reaching hurricane status tonight leaves 24 hours of time for additional development prior to landfall; within that window, Isaac could reach Category 2 intensity. How much stronger Isaac will become will depend in part on the storm's track—that is, how much time it will spend over the warm waters of the Gulf of Mexico.  Further adding to the uncertainty around Isaac’s forecast intensity is the fact that the storm will be moving over some of the warmest waters it has encountered to date, so a period of rapid intensification that leads to even stronger winds cannot be ruled out.

Subscribers to services offered by modeling firms can assess their exposures long before a hurricane makes landfall and take steps to diversify or minimize risks, can optimize their response to a looming hurricane by shifting production or scheduling a shutdown, and can make time-critical decisions as the catastrophe unfolds with the best data available concerning not only the storm’s effect on one’s own facility, but on the infrastructure and other plants on which one’s facility depends. Including such modeling in business planning leads to improvement of the bottom line.

Insurance – It is well-documented that insurers don’t particularly care for flood risk, including storm surge.  Following Hurricane Katrina dozens of cases sought insurance coverage for storm surge. The courts were not sympathetic; most found flood exclusions and anti-concurrent causation clauses valid and applicable. For example, where homeowners did not purchase flood insurance through the National Flood Insurance Program after being told by their carrier “Your policy does not cover flood loss. You can get protection through the National Flood Insurance Program,” the Fifth Circuit affirmed the trial court’s ruling and stated, among other things, “The omission of the specific term "storm surge" does not create ambiguity in the policy regarding coverage available in a hurricane and does not entitle the Leonards to recovery for their flood-induced damages.”  Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 438 (5th Cir. 2007).  Commercial insureds fared no better.  E.g., Northrop Grumman Corp. v. Factory Mut. Ins. Co., 538 F.3d 1090, modified, 563 F.3d 777 (9th Cir. 2008).

All of which is not to say that flood coverage is not available, but one has to actively seek it out, and pay for it.  This has important implications for supply chain coverage because if one's policy does not cover flood, and one's key supplier (scheduled under the contingent business interruption coverage) is shut down (as happened to many last year with Thailand's epic flooding), then there will be no coverage.  In other words, flood risk must be assessed at all relevant locations, not simply the insured's locations. 

Contracting away risk – Considering storm surge, one researcher has written:  "In many places, only inches separate the once-a-decade flood from the once-a-century one; and separate the water level communities have prepared for, from the one no one has seen.  Critically, a small change can make a big difference, like the last inch of water that overflows a tub."  Ben Strauss et al., Surging Seas 4 (Mar. 14, 2012).  We saw just above that insurance may not be available for a storm surge.  Is there any other path to recovery? 

Some that have purchased properties that have subsequently suffered flood damage have pursued their transaction professionals for the loss based on the theory that there should have been some disclosure.  They have had some success.  See, e.g., Perri v. Prestigious Homes, Inc., Docket No. A-0403-10T1 (N.J. Super. Ct. App. Div. Jan. 13, 2012) (suing broker for flood damage); Stonacek v. City of Lincoln, 782 N.W.2d 900 (Neb. 2010) (suing realtor, developer, engineer and city for ensuing water damage from flood); Loya v. Howard Hanna Smythe Cramer Co., 2009 Ohio 448 (Ohio Ct. App. 2009) (suing realtor for ensuing water damage from flood); Potter v. First Real Estate Co., 844 So. 2d 540 (Ala. 2002) (suing realtor based on flooding); Clay v. Walden Joint Venture, 611 So. 2d 254 (Ala. 1992) (referring to suit against realtor for flood damage).  It is relatively easy, however, to inoculate oneself against that kind of suit:  make the disclosure in the contract.  Realtors and sellers in Norfolk, Virginia apparently already do that. For a more detailed discussion see J. Wylie Donald, Getting Ahead of Storm Surge, Especially in an Era of Climate Change.

Sand bags and plywood sheeting are irreplaceable as a hurricane roars in.  Maybe one should start including other preventive steps as equally necessary in order to avoid the proverbial several pounds of cure.

Flood Insurance | Insurance | Rising Sea Levels | Weather


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