What’s the ROI on Mitigation?

Storms, fires, floods, and heat caused at least $306 billion in damages in 2017.

PBS News Hour

The United States just booked its most expensive year in natural disasters. From Hurricanes Irma and Maria, the California mudslides and wildfires, to the flooding in Arkansas and Missouri, and so many others (too many others), 2017 was devastating and it is likely to get worse. This rocket ship trajectory of disaster damage has sparked conversation in communities, in Congress, in probably every business around addressing their disaster prevention and response practices. Many of us have this sense that surely we can do better, that we MUST do better by our citizens, our economy, our infrastructure and our homes.  

One way to do that is by anticipating the threats and acting in advance to reduce risk and limit losses. These are investments with proven returns.

Laura Lightbody and Matt Fuchs, The PEW Charitable Trusts
 

Enter the very timely National Institute of Building Sciences (NIBS) study “Natural Hazard Mitigation Saves: 2017 Interim Report” (which I learned of thanks to @PewTrusts’ Twitter feed) which found that the ROI for hazard mitigation funding by FEMA, HUD, and the Economic Development Administration (just these three agencies, combined) was a whopping 6:1.  Put another way:

...[Hazard] mitigation funding can save the nation $6 in future disaster costs, for every $1 spent.

NIBS, 2017

That’s an incredible ROI.  To put it in perspective, the S&P 500’s 20-years average return is about 7.81%. And there are other “savings” as well.  The NIBS report also found that continuing the mitigation efforts of the aforementioned agencies along with going beyond the 2015 international model building codes in some key areas “would prevent 600 deaths, 1 million nonfatal injuries and 4,000 cases of post-traumatic stress disorder (PTSD) in the long term” and also create tens of thousands of construction jobs.

We know our infrastructure is in trouble (ASCE, ), we know we have got to do better to mitigate and avoid the results of natural disaster, and we now know that it’s an even greater deal for us by many metrics than we previously thought.(The oft-cited previous report showed a BCR of 4:1)  So share this report, engage with your legislators, and join me in feeling hopeful that, though it isn’t sexy, we can move toward mitigation so that we’re in less trouble when the storm hits.  

 

(Thomas Fire photo by Doc Searls https://flic.kr/p/22n6Sij)