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).