Investors are rethinking infrastructure as the climate changes

Key Concepts:

• Climate change impacts on US infrastructure
• Infrastructure resilience and adaptation
• American Society of Civil Engineers (ASCE) infrastructure report card
• Climate risk modeling (First Street Foundation)
• Investment and financial decisions related to climate risk
• Government agencies (NOAA, FEMA, NIST) and their role in climate science
• Impact of political decisions on climate science funding and personnel

Infrastructure Vulnerability to Climate Change:

• Extreme Weather Events: The video highlights how extreme weather events, such as historic rainfall at Fort Lauderdale International Airport and extreme heat in New York City, are exposing the vulnerability of US infrastructure. The Fort Lauderdale example demonstrates how runways can be rendered unusable, while the New York City example shows how heat can cause structural issues in bridges.
• ASCE Report: The American Society of Civil Engineers (ASCE) has found that climate-related challenges are widespread, even in regions previously resistant to such events. The ASCE's overall grade for the nation's infrastructure is a C, indicating significant deficiencies.
• Executive Director Tom Smith's Perspective: Tom Smith, Executive Director of ASCE, emphasizes that infrastructure was often not designed for the increasing frequency and intensity of extreme weather events. He stresses the need to design for a range of potential impacts (ice, snow, drought, heat, hurricanes, tornadoes) and to anticipate future climate conditions. "We have to anticipate you know not just where the puck is now but where we think it's going."

Sectors at Risk:

• Worst Grades: Sectors with the worst infrastructure grades include airports, power, and telecommunications.
• First Street Foundation Analysis: First Street, a climate risk firm, overlaid its risk modeling on these sectors and found that 19% of all power, 17% of telecommunications, and 12% of airports have a major risk from flood, wind, or fire. These numbers are projected to increase.

Adapting to a Changing Climate:

• Outdated Design: Sarah Kapnik, former chief scientist at NOAA (National Oceanic and Atmospheric Administration) and now at JP Morgan, points out that much of the existing infrastructure was built decades ago for a climate that no longer exists. "It was built decades ago um and so it was built for a climate that no longer exists."
• Investment and Financial Implications: JP Morgan's clients are increasingly concerned about the climate impacts on their investments and infrastructure. They are seeking guidance on how to adapt their infrastructure, construction practices, insurance strategies, and access to capital markets.
• Science-Based Resilience: Both Kapnik and Smith emphasize the importance of science in making infrastructure climate-resilient. "Climate and science is something that we take very very seriously working with the science connecting it with the engineering to protect the public health safety and welfare."

Impact of Political Decisions:

• Cuts to Climate Science: The Trump administration made deep cuts to climate science, including firing hundreds of employees at NOAA, FEMA (Federal Emergency Management Agency), and NIST (National Institute of Standards and Technology).
• Data Availability: These agencies are key in advancing climate science. The cuts are creating uncertainty about the availability of crucial data sets that inform market and financial decisions. "There's going to be this adjustment period as people figure out where they're going to get the information that they need because many market decisions or financial decisions are based on certain data sets that people thought uh would always be there."

Synthesis/Conclusion:

The US infrastructure is increasingly vulnerable to climate change, with sectors like power, telecommunications, and airports facing significant risks. Adapting to this new reality requires incorporating climate science into infrastructure design, investment decisions, and risk management strategies. However, political decisions that undermine climate science funding and personnel pose a threat to informed decision-making and effective adaptation efforts. The video underscores the urgent need for a science-based approach to building climate-resilient infrastructure.