Hurricane Harvey hammers home risks of climate change
Hurricane Harvey continues to ride roughshod over the U.S. It is the strongest tropical storm to make landfall in the Texas since 1961, and in the U.S. since 2004. It is also “the wettest tropical cyclone on record in the contiguous United States” according to Wikipedia, which claims that it has dropped nearly 52 inches of rain – surpassing previous record holder, Tropical Storm Amelia, which blew over the continent in 1978. Bloomberg notes that, on Tuesday, disaster analyst Chuck Watson “pegged $42 billion” as the cost of the disaster – by the end of the day, he had added a further $10 billion onto the forecast bill.
The reason that Harvey’s price tag is rising so quickly is the huge deluge of water the weather event is creating. Torrential rains are leading to the collapse of levees, dams and drains, and could push Harvey’s cost above that of Superstorm Sandy, the second most expensive in U.S. history. Watson describes the situation thusly: “we’re on the verge of having cascading failures. It is conceivable that we could get into the $60 to $80 billion range without that much effort.”
Harvey is a disaster on many counts – but regarding the impact of severe flooding, it is an informative one. With climate change predicted to increase precipitation dramatically and contribute to more extreme weather events over the coming years, it is imperative that the world becomes better fortified in regards to water: that means up-to-date infrastructure, readily available pumps and other water technology, and more. Water companies like Xylem Inc. may be our best chance of making the required changes.
Xylem’s share price has risen by 23% so far this year
Source: Yahoo Finance
According to Watson, our disaster models are not calibrated to take events as extreme as Harvey into account. Usually, infrastructure like dams and drainage systems will begin to fail when stress rates reach 80% to 90%. However, he said, during Harvey, which has forced a year’s-worth of rainfall in just three months “we are seeing failures at 60%”. That this rain has fallen on ground already waterlogged from heavy precipitation earlier in the season simply exacerbates the problem.
Harvey is swiftly becoming a human disaster too. Bloomberg says that 15 people were confirmed deceased in its wake by Tuesday. Wikipedia gives the current figure of 30. Harvey has not finished and, disturbingly, looks as though it will spread further. It is this human cost that will be the most troubling once Harvey has blown through. Louisiana and New Orleans are already suffering from Harvey’s watery wrath, and Watson says there is “another train heading towards Houston.” He adds: “Behind every one of these dollar signs is a family that doesn’t have a house anymore.”
Dominion holds Xylem Inc., as well as a number of other companies engaged in the fight against climate change and mass precipitation, in its Global Trends Managed Fund.
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