Episode Details

Disaster Economics, Do We Have The Will To Change? 

I was writing a piece for this week on the efforts of humanitarians in the world. (This is because I had a great interview published on June 7 on Prepare. Response. Recover.) I could not shake the need to talk about disaster economics. As the hurricane season is upon us, Alex is heading to Flordia with an early-season storm as I read these words. We need to look at some history to address the future. 

On February 1, 1953, a fierce, sustained storm created a massive surge in the North Sea off the coast of Holland. Floodwaters overtopped the dikes, swallowing half a million acres of land and killing nearly two thousand people. Within weeks of the storm, the government of Holland created a plan known as the Delta Plan, which is a set of recommendations for flood-control measures. 

Over the next four decades, the Dutch invested billions of guilders in a vast collection of dams and barriers, culminating in constructing the Maeslant (Mas Lont) Barrier, an enormous movable seawall to protect the port of Rotterdam. Since the Delta Plan, the Netherlands has not been flooded by the sea again.

In the United States, policymakers fail to look at how disasters and the recovery process are costing taxpayers more money, time, and effort than if we invest in prevention, infrastructure improvements, and meaningful mitigation efforts. 

Brock Long stated in an interview, "we're in a vicious cycle of communities being impacted by disasters and having to constantly rebuild. And it's almost as if we're not learning anything from what mother nature and history has taught us." 

In the aftermath of Hurricane Sandy, which brought havoc to the Northeast and inflicted tens of billions of dollars in damage, it's overwhelmingly clear that parts of the U.S. need a Delta Plan of their own. Sandy was not an isolated incident: Hurricane Irene caused nearly sixteen billion dollars in damage, and Hurricane Michael caused $25.1 billion. There is a growing consensus that extreme weather events are becoming more common and damaging. 

The annual cost of natural disasters in the U.S. has doubled over the past two decades. Instead of just cleaning up after disasters hit. We need to ask whether we can find the political will to invest in such ideas. 

Although politicians have called for significant new investment in disaster prevention, reports from Washington suggest that Congress will be more willing to spend money on relief than on preparedness.

That's what history would lead you to expect: for the most part, the U.S. has shown a marked bias toward relieving victims of disaster while underinvesting in prevention. 

A study by the economist Andrew Healy and the political scientist Neil Malhotra showed that, between 1985 and 2004, the government spent annually, on average, fifteen times as much on disaster relief as on preparedness.

Politically speaking, it's always easier to shell out money for a disaster that has already happened, with clearly identifiable victims, than to invest money in protecting against something that may or may not occur in the future. 

Healy and Malhotra found that voters reward politicians for spending money on post-disaster cleanup but not for investing in disaster prevention, and it's only natural that politicians respond to this incentive. 

The federal system complicates matters, too: local governments want decision-making authority, but major disaster-prevention projects are bound to require federal money. And much crucial infrastructure in the U.S. is owned by the private sector, not the government, making it harder to do something like bury power lines.

These are genuine hurdles, and safeguarding the great expanse of the Atlantic coast is a much more expensive proposition than defending Holland's smaller one. But there's a more fundamental problem: the U.S., as a rule, tends to underinvest in pu