A recent Senate hearing highlighted some of the progress U.S. communities are making, and the major challenges they face, in better coping with costly extreme weather events — including those, such as heat waves and coastal flooding, whose risks are heightened by climate change.

Sen. Tom Carper, chairman of the Homeland Security and Governmental Affairs Committee, noted that the “frequency and intensity of these extreme weather events are costing our country a lot – not just in lives impacted – but in economic costs, as well.” Nearly 130 weather-related events in 2013 caused more than $20 billion in losses in the United States.

Extreme weather is costly, not only to federal, state, and local governments, but also to businesses and individuals.

Much of the Senate testimony echoed key findings in our report, “Weathering the Storm, Building Business Resilience to Climate Change.”  Three key points made at the hearing were:

• Acting to build climate resilience can save money. University of New Hampshire professor Paul Kirshen testified that his research shows an across-the-board economic benefit in building climate resilience now versus later. As an example, Delaware Secretary of the Environment and Energy Collin O’Mara said that beaches replenished with sand help protect his state’s multi-billion-dollar tourism industry at a cost less than 1 percent of the value of the assets being protected.
  Similarly, businesses recognize the cost of inaction. In our report, “we highlighted examples of companies protecting vulnerable coastal infrastructure by building floodwalls and relocating facilities to higher ground. For example, after major floods in the United Kingdom in 2010, the energy utility National Grid did a risk assessment and determined it needed to rebuild or elevate about 10 percent of its electricity substations. The company recently said those and other investments have helped minimize the impacts of record flooding this year.
• High-quality data and tools are needed to make local decisions about resilience. Mark Gaffigan, managing director of natural resources and environment issues at the U.S. Government Accountability Office, said all resilience planning is local. The challenge is to deliver information and tools that can help local decision makers understand their specific risks, identify adaptation options and opportunities, and take action. The federal government is helping states address this issue. David Heyman, assistant secretary for policy at the U.S. Department of Homeland Security, said the Federal Emergency Management Agency (FEMA) is trying to provide communities better data and risk assessment tools. Businesses face similar challenges.
  Companies need user-friendly data and tools that relate climate risks and opportunities to corporate planning and operations. Our report recommended creating a clearinghouse for reliable, up-to-date data and analytical tools.
• Communities can follow a clear framework for managing climate risks. FEMA and communities are starting to manage climate risks by first collecting information about extreme weather impacts and vulnerabilities and assessing and prioritizing them. Then they can develop guidance to inform decisions and incorporate risk factors into an ongoing  review process. O’Mara noted that Delaware’s approach identifies vulnerabilities and stressors, invests strategically with preference for natural systems, and builds in resilience going forward.
  We found a few leading companies have also developed a framework for managing climate risk – especially where they see opportunities to become more efficient, reduce costs, or provide greater value to customers. But by and large, businesses are basing their response on a historical picture of past risks – a picture that’s incomplete because climate change is rewriting our future.

A key message from hearing participants is that an ounce of prevention is worth a pound of cure. That holds true for both communities and companies.