$1 spent on climate resilience = $13 in economic savings, damages, and cleanup costs
NORTHBROOK, Ill., June 25, 2024–(BUSINESS WIRE)–Every $1 spent on climate resilience and preparedness saves communities $13 in damages, cleanup costs and economic impact, according to a new economic study by Allstate, the U.S. Chamber of Commerce and the U.S. Chamber of Commerce Foundation.
The study, “The Preparedness Payoff,” models 25 disaster scenarios ranging in damage and cleanup costs from $1 billion to $130 billion in communities across the country. Each model revealed substantial economic savings resulting from upfront investment in disaster resiliency programs and resources, preserving millions of jobs and household incomes, reducing the number of people displaced from their homes and maintaining production to help local economies rebound faster. On average, for every $1 spent on resilience, communities save $7 on economic costs alone.
With weather-related catastrophes increasing in frequency and severity and billion-dollar disasters now the norm, it’s essential for government, businesses and households to invest in resilience for communities to prosper. In 2022 alone, the cost of natural disasters exceeded $360 billion across the globe, including more than 40 weather events causing over $1 billion in damage.
“Each scenario we modeled demonstrates that investing in resilience has remarkable benefits for communities,” said Marty Durbin, Senior Vice President, Policy at the U.S. Chamber of Commerce. “This important study helps identify opportunities to reduce the economic costs of natural disasters, including job loss, lost income, reduced economic activity, and loss of workforce.”
The study found that if a large city invests $10.8 billion in resilience and preparedness before a Category 4 hurricane, that city would save 184,000 jobs, $26 billion in GDP and $17 billion in earned income for residents. If the city didn’t make those investments, it would lose 361,000 jobs, $46 billion in GDP and $29 billion in earned income for residents.
In addition, communities see gains from preparedness even if a disaster doesn’t hit. In the scenario above, the city would create more than 126,000 jobs, increase production by close to $13 billion and grow income by more than $8.5 billion.
“The economic benefits of investing in resilience are clear. It’s also essential to the availability and affordability of insurance for years to come,” said Elliot Stultz, Chief Sustainability Officer at Allstate. “As communities struggle with the impacts of more frequent, severe weather, investments in resilience today can empower them to prosper.”
Here are a few examples of resiliency investments that communities, businesses and families can make:
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Green infrastructure to manage stormwater runoff and protect floodplains.
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Wetlands restoration to allow natural areas to store excess water.
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Barrier walls, floodgates, and levees to prevent floodwaters from harming structures.
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Enhanced evacuation routes for floods or hurricanes.
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Structural improvements and accessibility updates to homes and businesses.
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Elevated electrical systems and appliances above potential flood levels.
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Flood barriers, sump pumps, and backflow valves.
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Removal of flammable materials near homes.
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Fire-resistant roofing or landscaping.
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“It’s critical that government and business decision makers at every level understand how such investments can improve the safety and strengthen the resiliency of their communities,” said Marc DeCourcey, Senior Vice President at the U.S. Chamber of Commerce Foundation.
Methodology
Seven types of natural disasters were analyzed to determine the economic impact of resilience and preparedness measures: Hurricanes, large storms, earthquakes, tornadoes, floods, wildfires, and droughts and heatwaves. A variety of methods were used to calculate the destruction caused by these disasters and their economic impacts. For detailed information, see the Methodology section.
Supporting Communities and Small Businesses
This study is the first new research produced jointly by the U.S. Chamber of Commerce, Allstate and the U.S. Chamber of Commerce Foundation to strengthen community resilience to increasingly severe weather.
The partnership builds on Allstate’s work to strengthen communities to empower people so they can thrive and the U.S. Chamber and Chamber Foundation’s disaster response and resiliency solutions, which include training and resources to help businesses and communities prepare for and recover from disasters.
About the U.S. Chamber of Commerce
The U.S. Chamber of Commerce is the world’s largest business organization representing companies of all sizes across every sector of the economy. Our members range from the small businesses and local chambers of commerce that line the Main Streets of America to leading industry associations and large corporations.
They all share one thing: They count on the U.S. Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, we have advocated for pro-business policies that help businesses create jobs and grow our economy.
About Allstate
The Allstate Corporation (NYSE: ALL) protects people from life’s uncertainties with a circle of protection including cars, homes, electronic devices, benefits and identity theft. Products are available through a broad distribution network including Allstate agents, independent agents, major retailers, online, and at the workplace. Allstate is famous for the slogan You’re in Good Hands with Allstate®.
About the U.S. Chamber of Commerce Foundation
The U.S. Chamber of Commerce Foundation harnesses the power of business to create solutions for the good of America and the world. We anticipate, develop, and deploy solutions to challenges facing communities—today and tomorrow.
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Contacts
Mallory Vasquez
Allstate
Mvas9@allstate.com
(847) 309-7546
Lindsay Cates
U.S. Chamber of Commerce
LCates@uschamber.com
(202) 897-8515
Yagmur Cosar
U.S. Chamber of Commerce Foundation
YCosar@USChamber.com
(202) 770-9828