top of page
  • Writer's pictureJennifer Depew

The big picture of climate change is bigger than businesses may consider.

Updated: Dec 24, 2018

More businesses and other groups are beginning to consider the potential losses and insurance needs or disaster recovery plans that may occur due to climate change, however many may be considering the direct impact to their own business and customers and not consider the bigger picture of suppliers, power and water, transportation, and the extended network of modern life. The topic is introduced in a short article: Companies Vastly Underestimate the Costs of Climate Change, by Adele Peters, Dec. 12, 2018, (Fast Company).

The problem with society over-depending on insurance to cover costs of climate change is that too many individuals and businesses are likely to be affected at the same time and insurance companies may go bankrupt. Insurance is a pool of many small payments that provides larger payments to a few claims at a time - it is a way to spread risk across society to help the few who have disasters of whatever sort. When the balance tips towards many large claims being in need at the same time, then the many small payments won't be enough to meet the need of all the large claims.

Insurance is important but if an entire region is facing the same risk then the region needs to work on reducing risk physically, not just depend on insurance to cover the cost of rebuilding, whether coastal flooding or erosion, wildfire or earthquake, or severe snowstorms leading to rapid melting and floods in unexpected places or bursting of dams too much harm, too many lives might be at risk and rebuilding in the same way could just leave the survivors at risk of a repeat in the future.

The International Association of Insurance Supervisors (IAIS) and the Sustainable Insurance Forum (SIF, a group convened by U.N. Environment) recently released a report reviewing the risks of climate change that the insurance industry needs to consider - if the insurance companies are concerned, then likely it concerns all of us. Insurance is based on small payments by many covering the large payments to a few - prices to individuals and businesses have to be increased when the outgoing payments grow larger. That has been apparent with health insurance costs. A link to the IAIS & SIF report is included in a brief article about it: Report Outlines Climate Change Risk by Insurance Sector, by Don Jergler, Aug. 23, 2018, (

Images and a discussion of an enormous flood prevention project in Japan built to protect Tokyo, includes the concern that defensive construction plans may give a false sense of security leading to over-development of areas that will become more and more at risk to severe flooding. Public education regarding individual strategies to follow in emergencies is also discussed - signs and practice drills for what to do, where to go quickly to reach higher ground in case of flooding. See: Tokyo is Preparing for Floods 'Beyond Anything We've Seen,' by Hiroko Tibuchi, Oct. 6, 2017, (NewYorkTimes).

Other parts of the world are building parks in flood plain zones to give flood waters a place to go and protect areas slightly farther away from the ocean coastline with barrier dikes around the floodplain. When the areas aren't flooded they may act as a community park with bike paths and other playground or sports activities. Building houses on stilts or as a floating house, that isn't quite a boat or a standard house, are other strategies.

Entire countries are facing a future underwater. Farming the ocean, recycling the plastic, aerating and repopulating the low oxygen zones, might all be tasks that a water based community might do in an new business economy. Some industrial and fish processing tasks are now being performed on the large fishing boats or tankers. Water based communities might grow mussels and seaweed in areas with upwelling tubes or windmills and provide maintenance for those projects. Hydroponic gardens could help provide other fresh food within the water based community instead of having to be reliant on shipments from land based communities. What we build today for tomorrow doesn't have to look like yesterday's world.

Additional References regarding strategies used to reduce risk of urban flooding:

  • A nonprofit organization has been successfully working to identify obsolete dams and safely remove them from rivers throughout America. Which opens the flowing river to wildlife like otters and also helps protect communities from the risk of flooding if the dam fails, as is likely when maintenance and repair is no longer occurring. (

  • The Netherland's Room for the River project that protects urban areas from flooding by directing flood waters into lowlying wetlands or floodplains that are used as parks when they are not flooded: (

  1. How Green Roofs Can Protect City Streets from Flooding, Aug. 21, 2017,

  2. William Moss, Reducing Urban Flooding, The National Gardening Association,

Sites with a variety of examples of sustainable projects for wise use of water:

  • For anyone interested in more information about what communities or farmers can do about wastewater treatment a site offers examples and strategies that have been successful: SSWM, Tools for Sustainable Sanitation and Water Management. (

  • Many example case studies from around the world are available which describe ways that communities have worked together to plan processes that maximize food and energy production while preserving water by planning the best use of resources for the region. See: Implementation and Case Studies, Nexus - The Water, Energy, and Food Security Platform, (

“We must begin thinking like a river if we are to leave a legacy of beauty and life for future generations.” David Brower .

Disclaimer: This information is provided for educational purposes within guidelines of fair use.

10 views0 comments

Recent Posts

See All


bottom of page