7/29/2019 Report on Economic Recovery From Disasters (Revised
Parallelism)
1/1
11
Lossaverted, 2030
CapEx
required2X Average C/B ratio
$ Billions $ BillionsPublic funding
Residential/commercial
1 Improved building codes
2 Beach nourishment 0.1
1.4 12
1
0.7
0.7
Private funding
Infrastructure/ 1
Environmental
3 Wetlands restoration
4 Levee systems1
5 Improved standards for
offshore platforms
6 Floating production
0.4
0.3
1.7
25 3.3
18 3.8
16 0.7
The governmentmay need tosupport or
incentivize someprivate capitalinvestment, e.g.,by
subsidizing
Oil and gas systems
7 Replacing semi-subs withdrill ships
8 Levees for refineries and
petrochemical plants
1.1 18
0.5 11
0.7 5
1.3
1.6
0.5
homes in low-income areasbuilt to higherbuilding codes
Electric utility 9Improving resilience of
electric utility systems1.3 15 0.9
Total 7.5 44 76 121
1 Included despite high C/B ratios due to strong co-benefits,
risk aversion2 Total capital investment, non-discounted, across 20
years
After these 9 efforts are put in place, there is still ~$14
billion in annual expected loss remaining in residualrisk. For
tail-risk (extreme events), insurance or risk transfer measures are
more cost-efficient than physicalmeasures in providing coverage.
Existing insurance penetration in the Gulf Coast can help
coverapproximately half of the $14 bn in residual loss.
There are four key risk transfer actions that can help address
residual loss:
increase penetration of existing insurance (through more
affordable premiums that are linked tophysical measures)
decreaseingthe prevalence of underinsurance (through incentives
that encourage updating ofinsured value of property)
encourageingadditional self insurance transfer top-layer risk is
transferred (e.g., through catastrophe bonds)
Implementingkeymeasureswillrequirebroadengagementacrosstheregion:Actions
are dispersed and will involve a broad set of structures,
activities and stakeholders. For example,some 230 miles of beach
nourishment activities, 1,000 square miles of wetlands restoration,
~ 540,000 milesof new, rebuilt or retrofitted distribution lines
will be required.
1This document appears inThe Video Tutorial on Parallel
Structureat ProsWrite. It was adapted
from Entergys Building a Resilient Energy Gulf Coast(downloaded
4-16-12).
