Many instances may require coordinated action by global inventories to mitigate the risk of food or multiple stakeholders. raw-material shortages, building inventory levels in supply chains to protect against interrupted Despite all that, many stakeholders will have to production, establishing the means to source figure out ways to adapt. Key measures include from alternate locations or suppliers, and securing protecting people and assets, building resilience, backup power sources. reducing exposure, and ensuring that appropriate insurance and financing are in place. Reducing exposure. Adaptation strategies for many physical assets will have to reflect their full life cycle. Protecting people and assets. In response to For example, it may make sense not only to invest in the record-breaking 2010 heat wave in India that addressing asset vulnerabilities for the next decade killed 300 people in a single day, the Ahmedabad but also to shorten asset life cycles. In subsequent Municipal Corporation developed the country’s decades, as climate hazards intensify, the cost– first heat-action plan. Its measures included benefit equation of physical resilience measures establishing a seven-day probabilistic heat-wave may no longer be attractive. At that point, it may early-warning system, developing a citywide become necessary to redesign asset footprints cool-roof program, and setting up teams to altogether by relocating employees and assets. distribute cool water and rehydration pills to We have already seen some examples of this, such vulnerable populations during heat waves. Steps as the buyout programs in Canada for residents such as these are crucial for protecting people. in flood-prone areas. Quebec prohibits both Stakeholders must also be prepared to prioritize the building of new homes and the rebuilding of emergency response and preparedness, erect damaged homes in its floodplain. cooling shelters, and adjust working hours for outdoor workers who are exposed to heat. Decisions will need to be made about when to focus on protecting people and assets versus when Measures to make existing infrastructure and to find ways to reduce their exposure to hazards, assets more resilient can help limit risk. Some of this which regions and assets to spend on, how much would address “gray” infrastructure—for example, to spend on adaptation, and what to do now as raising the elevation level of buildings in flood- opposed to in the future. Companies need to prone areas—while other moves would protect develop a long-term perspective on how risk and “green” infrastructure. The Dutch program Room adaptation costs will probably evolve, and they will for the River, for example, gives rivers more room to need to integrate voices of affected communities manage higher water levels. into their decision making. On the other hand, it will sometimes be more cost Rethinking insurance and finance. People are effective to erect new buildings than to retrofit old reluctant to carry insurance for unlikely events, ones. Some $30 trillion to $50 trillion will be spent even if they can cause significant damage. Today, on infrastructure in the next ten years, much of it in only about 50 percent of losses are insured. That developing countries. These infrastructure systems percentage is likely to decrease as the changing and factories could be designed to withstand the climate brings more—and more extreme—climate withering storms of the future, rather than what events. Without insurance, recovery after passes for a once-in-200-years event now. disaster becomes harder, and secondary effects become more probable. Underinsurance Building resilience. Decisions about strengthening reduces resilience. assets will need to go hand in hand with measures to drive operational resilience in systems. An To adjust to constantly changing physical risk, important aspect of this is understanding the impact insurers will have to reconsider current data and thresholds for systems and how and when they models, current levels of insurance premiums, and could be breached. Examples of resilience planning their own levels of capitalization. Indeed, the entire for a world of rising climate hazards include building risk-transfer process (from insured to insurer to 104 What now? Ten actions to emerge stronger in the next normal September 2020