flood risk

Palisade VP Gives Tips on Planning for Climate Change in IT Business Edge Magazine

Planning for Climate Change in IT Business Edge MagazineIT Business Edge, on online business publication recently published a piece by Palisade Vice President Randy Heffernan titled “Using Monte Carlo Simulations for Disaster Preparedness,” a slideshow featuring key tips on how to apply this statistical method to planning for extreme weather events.

As the article states, “the U.S. National Research Council recently suggested the necessity of a “national vision” that will take precautionary, rather than reactionary, approaches to flooding, particularly in the Atlantic and Gulf coasts, where water has reached flood levels an average of 20 days per year since 2001.”

As an expert in quantitative risk analysis, Heffernan had some tips for handling the key problems businesses face around climate change risk planning, including:

Fundamentally, all these tips are anchored by the application of Monte Carlo simulation, which, the article explains, “performs risk analysis by building models of possible results by substituting a range of values — a probability distribution — for any factor that has inherent uncertainty. It then calculates results over and over using a different set of random values from the probability functions.”

Want to make sure your business is better prepared for extreme weather? Check out the full article here, and check out @RISK, the Monte Carlo simulation software that makes planning for climate change events possible.

Palisade Vice President Randy Heffernan Discusses Risk of Climate Change in Risk Management Monitor

Randy Heffernan, Palisade’s Vice President, wrote a recently featured piece in the Risk Management Monitor discussing the looming risks of climate change. The piece, titled ‘Analyzing the Real Costs of Climate Change’ details how businesses and organizations are in for serious changes in the coming decades thanks to increasingly unpredictable weather patterns.

Heffernan references a report published earlier this year, “Risky Business: The Economic Risks of Climate Change in the United States,” which was co-chaired by business experts Michael R. Bloomberg, Henry Paulson and Tom Steyer and which quantifies and publicizes the economic risks posed by a changing climate.

“Are companies prepared for skyrocketing energy costs to combat extreme heat? Can farmers handle average crop losses of up to 73%? Should businesses invest in oceanfront property that is virtually guaranteed to flood?,” Heffernan asks in his piece.

Some organizations are preparing themselves. The Australian Federal Government hired  AECOM, a professional technical and management support company, to run Monte Carlo simulation-based evaluations on flooding risk in populated areas, such as the Narabeen lagoon, near Sydney. “Because climate change is expected to increase flooding in the Narrabeen catchment over the coming century, decision-makers needed a clearer understanding of the different possible adaptation measures,” Heffernan says.

He goes on to say, “While many companies may be resistant to change, the [Risky Business] report makes an undeniable case; we cannot afford to ignore the momentous climate risks that threaten our near- and long-term future.”

U.S. Flood Risk Management Needs New Approach

halcrowIt’s time to change how we deal with flood risks, say top scientists with the U.S. National Research Council. According to a recent report, the experts are urging for a “national vision” that will take precautionary, rather than reactionary, approaches to flooding, particularly in the Atlantic and Gulf coasts, where water has reached flood levels an average of 20 days per year since 2001.

Indeed, thanks to increases in population and property along coastal regions, along with climate-change-driven threats like storm surges, sea-level rises, and more intense hurricanes, storm-related losses are more likely than ever.

Currently, the majority of money spent on mitigating coastal risk is spent on recovery after a flood disaster, rather than precautionary measures to mitigate damage. Adding to the problem is the fact that coastal risk reduction responsibility is shared piecemeal by federal, state and local agencies without any central leadership strategies.

Incentives also cause property developers to continue to build in flood-prone areas, while the resulting tax revenue encourages local governments to support these (typically high-end) developments. But when the flood damage occurs, it’s the federal government and tax payers left holding the bill.

Instead of cleaning up destroyed properties and coastal areas, municipalities and governments could instead build infrastructures (seawalls, etc.) and encourage natural storm protection (dune building, etc.) to reduce flooding or wave damage, or enact policies that require people and property to stay out of flood zones.

Whatever U.S. state and federal leaders decide to do, flood risk planning would benefit from some element of quantitative risk analysis to help pinpoint the right balance between cost and mitigation efforts.