24 Oct 2024

Successive Major Hurricanes Strike the US Southeast, Highlighting the Urgent Need to Enhance Climate Resilience

By Toby Cheng, Manager, Sustainable Finance Analysis, Climate Finance Asia

The sink of North Carolina’s “climate haven” is a sobering reminder of the escalating climate risks. Hurricanes Helene and Milton have consecutively devastated the US Southeast, exposing vulnerabilities in infrastructure and communities. The storms underscores pressing needs to strengthen societal and institutional climate resilience, in which the financial sector and strategies play a role.

Hurricane Helene, undergoing rapid intensification on Sep 25. (Image credit: CSU/CIRA & NOAA)

The Rising Threat of Hurricanes

Tropical cyclones are fuelled by warm ocean waters. Global ocean heat content has been growing since the 1990s, driven by climate change. The Sixth Assessment Report (AR6) of Intergovernmental Panel on Climate Change (IPCC) summarised that the numbers of more intense and rapidly intensifying tropical cyclones are increasing, a trend projected to continue as global warming persists.

The Illusion and Fall of a “Climate Haven”

In recent years, Asheville in the western North Carolina, has been touted as one of the few “climate havens” for relocation in US, places seemingly shielded from the worst impacts of climate change. Nestled between the Blue Ridge Mountains, Asheville enjoys mild winters and ample water resources that evenly distributed in its four distinct seasons. It is far away from coastal threats of sea-level rise and storm surges, while protected from wildfires, droughts, and tornadoes. Adjacent to the famous Great Smoky Mountains National Park, it also boasts beautiful natural scenery.

However, the place is not a climate haven, and it has never been.

Asheville’s mountainous terrain is susceptible to flooding, a risk that it has been suffering from historically. The stark reality is that disasters have propelled gentrified rebuilt in low-income communities, a flawed development model in the US. In the wide Appalachian, flooding risks are largely underestimated or ignored, with inadequate infrastructure and unprepared communities. Most new residents of Asheville have never experienced severe floods and do not consider their homes are at risk.

Then, Helene came.

The Onslaught of Hurricane Helene

Helene rapidly intensified over the exceptionally warm Gulf of Mexico. Despite making landfall more than 600 km away in Florida, it brought a staggering amount of water vapour deep inland and caused widespread flooding and power outages affecting millions in Georgia and the Carolinas.

Night time satellite images of US Southeast before (left, Aug 29) and after (right, Sep 28) Hurricane Helene. Large patch of darkened area showed the scale of power outage along the path of Helene. Atlanta, GA, is shown as the largest white patch in both images. (Image credit: CSU/CIRA & NOAA/NESDIS)

Compounded by the orographic effect, large highlands in the western North Carolina observed “once-in-a-millennium” torrential rains, with river levels surpassing records of the infamous 1916 flood. Meteorologist estimated there were over 150 billion cubic metres of rainfall in the Southeastern United States in just one week—enough to fill the Three Gorges Dam Reservoir nearly four times, or to flood the entire state of North Carolina under one meter of water!

The devastation was profound: floodwaters reaching depths of two to three stories, entire towns were submerged or even washed away. Over 230 lives were lost in the mainland US—the second worst natural disaster in half a century, only after Hurricane Katrina. Less than 1% of houses in the affected areas had flood insurance, stripping off everything from those whose homes were destroyed.

Flooding of the Asheville metropolitan area. (Images by NCDOTcommunications, CC BY 2.0a)

Ironically, a group of climate professionals were physically impacted by the disaster. The US National Centers for Environmental Information (NCEI) of NOAA is headquartered at Asheville, with its global climate data archive services still partially disrupted. A preliminary attribution analysis from Berkeley Lab found that anthropogenic climate change increased Helene’s rainfall by 50%, and made the probability of such extreme precipitation 20 times more likely.

As many severe disasters occurred across US in 2024, the Federal Emergency Management Agency (FEMA) used nearly half of its annual disaster budget within the first eight days of the new fiscal year in October. With the presidential election approaching and North Carolina being a key swing state, post-disaster rumours spread widely, accusing the federal government of ineffective relief, misappropriation of funds, and even manipulating weather to direct hurricanes to red states. These fake information circulated on social media unprecedentedly, threatening the safety of relief personnel, leading President Biden to repeatedly and publicly condemn the rumour spreaders.

Trouble Comes in Twos

Just two weeks after Helene, Hurricane Milton formed in the still hot Gulf, and explosively intensified into a Category 5 hurricane at a record-breaking rate. Targeting Tampa Bay, Florida from the west, the rarely predicted track threatened to unleash catastrophic storm surges in the metropolitan area of over 3 million people, which is the third populous one in the Southeastern United States after Atlanta and Miami.

The World Bank ranked Tampa Bay amongst the top ten most vulnerable coastal areas globally in terms of potential losses. Its low elevation, shallow continental shelf, long and curved shape, narrow bay mouth, and dense development are all hazard factors for storm surges, exacerbated by sea-level rise due to global warming—merely lacking a perfect storm. Over the past century, Tampa Bay has repeatedly avoided the worst-case scenarios. Local legend has it that ancestral spirits of Native Americans are still protecting Tampa. However, this trust in luck also worsen the unpreparedness in the area.

Hurricane Milton regained Category 5 strength, targeting Tampa Bay, Florida on Oct 8. (Image credit: CSU/CIRA & NOAA)

The US National Hurricane Center (NHC) once forecasted that Milton could cause storm surges over four meters high in Tampa Bay, potentially translating into a recording USD 175 billion economic loss. This would shock the reinsurance industry and trigger significant payouts under catastrophe bonds. Tampa was fortunate to dodge a bullet again, as Milton’s track was less northward than predicted, and it weakened before landfall. Still, the storm caused dozens of deaths and left 3 million households and businesses without power.

Yet, calamities from hurricanes extend far beyond we thought.

The Unseen Toll of Hurricanes

A recent study published in the journal Nature reveals that areas affected by tropical cyclones showed elevated mortality rates lasting up to 15 years, due to various factors such as economic hardship, psychological stress, and disruptions to healthcare services. The official statistics of direct causalities are far lower than the estimated 7,000 to 11,000 indirect excess deaths per storm. This means that 3% to 5% of deaths along the US East Coast can be linked to hurricanes.

Urgency of Climate Resilience and its Investment

These two hurricanes and numerous studies highlight the urgent need to strengthen climate resilience at societal, institutional, and community levels. The global climate crisis spares no place, and individuals cannot stand alone. The old norms, based on a bygone climate, are no longer adequate. Governments should reinforce prevention and response at the policy level: strengthening infrastructure requirements, updating insurance frameworks, and improving disaster safety nets. The climate literacy of the public must also be enhanced. Enterprises need to examine their transition strategies and risks, investing in sustainable businesses and assets.

While ESG investments have grown significantly in recent years, little was allocated to climate adaptation and resilience. Most of the investment in resilience comes from the public sector, but private capital can also contribute. The Climate Bonds Initiative released a first edition of the Climate Bonds Resilience Taxonomy and its Methodology in September, aiming to channel more capital towards resilience support.

Additionally, the establishment of the Loss and Damage Fund at COP28 last year represents a critical step in post-disaster recovery. In the COP29 next month, dubbed as the “finance COP”, we expect to see further financing and mechanism of the fund. CFA invite readers to stay tuned to developments in climate finance, keep an eye on our insight sharing, and actively participate in actions and investments that enhance climate resilience.

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