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Catastrophic Failures and Catastrophic Fools

 The current approach to dealing with catastrophes is an after-the-fact response model that is inadequate to protect New Jersey residents from catastrophic loss. New Jersey consumers need a public-private partnership which improves the means to provide financial assistance to families that are victims of catastrophes, enhances prevention and mitigation measures, improves recovery and rebuilding processes and educates homeowners on issues surrounding catastrophe management. [...]

The State of New Jersey is commonly viewed as one of the states in the region that is exposed to catastrophic events. Given the scope and magnitude of hurricanes Katrina and Rita, and given that New Jersey is the most densely populated state in the nation and because of the size of New Jersey, it is likely that a Category 3 or better storm could devastate the State.  Legislative findings, A3236 (2006)

[Update below] -

No doubt, Sandy was a Catastrophic storm.

No doubt, NJ still suffers from “an after-the-fact response model”.

No doubt that all this will be ignored by the press coverage.

But, as the stormwaters recede and power is restored, before we move on to the next new thing, let’s not lose sight of the need to reflect and understand important lessons.

It is crucial that we take this moment to reflect NOW, before new expectations are formed and we mindlessly begin repeating the same mistakes that brought us to this crisis.

Some of the most important are:

1) Sandy as a Final Wake up Call – connecting the dots of this storm to global warming induced climate change- (see:  “Frankenstorm” Another Example of Global Warming Extreme Weather

Over the last year, the rest of the country has suffered record wildfires, heat waves, droughts, hurricanes, and tornadoes – now its the East Coast’s turn to experience extreme weather directly.

2) Sandy as an opportunity to re-imagine a new Jersey Shore and begin the painful process of “strategic retreat” and adaptation (see:  A Dirge To McHarg and Mumford

3) Sandy as illustrating the need for planning and public policy leadership

I’ve written briefly about the first two lessons to be learned from “Hurricane” (or “Superstorm”) Sandy, so today I will touch briefly on the planning and public policy issues.

It is no secret that many in leadership positions in Corporate and Republican circles deny the science of global warming, are “market fundamentalists”, and view government as the problem, not the solution.

Those Catastrophic Fools have a lock on government and have used their power to block all forms of government intervention – Republicans even sought to slash FEMA funding, hand it off to the States, and eliminate and privatize FEMA.

But, we read today that the Star Ledger is reporting that the cost of Sandy will exceed $30 billion:

The damage from Hurricane Sandy will likely exceed that from Tropical Storm Irene, but the cost to businesses could be far worse.

Analysts estimate property damage along the Eastern Seaboard could be as much as $20 billion, but say business losses could reach as high as $30 billion.

I found it tragically ironic that the NJ Business and Industry Association was quoted in the story, complaining about the costs to business (a prelude to subsidies?):

“The impact was very broad,” said Christopher Biddle, vice president of the N.J. Business & Industry Association. “It hit every business across the state.”

He said it was too early to put a dollar sign on the damage, but expected the state’s economic recovery would be slowed.

“This has been a difficult and weak economy,” he said, “so it’s been tough to begin with. Now, with Sandy, it’s an extremely tough time for any business that’s already struggling.”

It’s folks like NJ BIA that are blocking the kind of government policy interventions that could mitigate those economic hits to business!

Catastrophic Fools like NJBIA should suffer the fulll consequences of their foolishness and Catastrophic Failures!

So, while the press will certainly report the NJBIA whining and will write even more disgusting lapdog stories about Gov. Christie “rising to the crisis”, here’s something to chew on that you will not read in the paper:

Although the press has amnesia, we recall that not so long ago, during the Corzine Administration, government leaders actually took steps to not only mitigate global warming emissions, but to anticipate, plan for and finance catastrophic storm events (what we now refer to as “extreme weather”).

While Governor Christie prances around and demagogues the emergency response on YouTube and multiple press conferences – even using the storm as cover to weaken Flood Hazard regulations -  former Governor Corzine exercised leadership and actually proposed solutions, not empty rhetoric and slogans.

[Note: This is not a partisan issue. We criticized the Corzine initiatives at the time as woefully inadequate - but, in contrast to Christie, at least Corzine was proposing solutions.]

For example, in an April 12, 2006 memo, Corzine DEP Commissioner Jackson and Banking and Insurance Commissioner Goldman warned Governor Corzine that:

“Global climate change is predicted to have a pronounced impact on New Jersey. Changes are already occurring. Rising ambient temperatures are expected to effect the health of our citizens. …Sea level rise is expected to accelerate and threaten New Jersey’s coastline. Higher sea levels will increase the severity of storm-related flooding is coastal and bay areas. In addition to significant property losses, sea level rise will adversely affect coastal ecosystems and may threaten fresh water supplies through salt water intrusion. With climate change, storm frequency and intensity is predicted to increase.”…

These are but a few of the results we can anticipate from climate change and we can also expect the changes to have serious consequences for New Jersey’s economy. In March, the National Association of Insurance Commissioners voted unanimously to establish as task force on climate change to examine the issues bearing on the insurance industry’s long term solvency. Late last year, New York State’s largest provider of homeowners insurance, Allstate, announced that it would no longer sell new homeowners insurance in NY City, Long Island and Westchester County. According to a company spokesperson, Allstate is studying whether to stop writing new policies in other parts of the country, particularly for properties in vulnerable shorefront areas.

In response, to address those serious threats, Corzine held a “Climate Change Summit”.

The Summit was called: “Confronting Climate Change in New Jersey”. It  was held on September 25, 2006. The Governor directed Summit participants to focus on, among other things:

  • What policy changes should the State make in response to the focus issues of floods and storms (including sea level rise)?
  • Are there current State policies and practices regarding the regulation of …land use and construction that serve as disincentives to sound practices in light of climate change?
  • What …[policies] could we modify to encourage consideration of floods and storms in development and land use practices?

As part of that effort, Assemblyman Panter (since un-elected), proposed legislation, A3236, called: “New Jersey Consumer Catastrophe Preparedness and Protection Act“,.

We testified and suggested amendments to strengthen that bill – which found:

2.  The Legislature finds and declares that:

     a.  The exposure in New Jersey to major catastrophes is greater than commonly understood, particularly catastrophes involving hurricanes, earthquakes and other natural disasters.

     b. All New Jersey residents, regardless of location, are susceptible to the devastating and unpredictable consequences of catastrophes, thereby necessitating a Statewide preparedness and proactive program of catastrophe management. 

     c.  There is a compelling State interest in maintaining a viable and orderly private sector market for property insurance in this State. To the extent that the private sector is unable to maintain a viable and orderly market for property insurance in this State, encouraging and assisting such a viable and orderly market are valid and necessary exercises of the police power.

     d.  The failure of the State to properly prepare for a potential catastrophe could result in a devastating impact on New Jersey families, as well as the entire State’s economy.

     e.  The current approach to dealing with catastrophes is an after-the-fact response model that is inadequate to protect New Jersey residents from catastrophic loss. New Jersey consumers need a public-private partnership which improves the means to provide financial assistance to families that are victims of catastrophes, enhances prevention and mitigation measures, improves recovery and rebuilding processes and educates homeowners on issues surrounding catastrophe management.

     f.  The result of unprecedented levels of insured losses from natural catastrophes in recent years, as evidenced by Hurricane Andrew, the 2004 four-storm hurricane season in Florida, tsunamis in Asia, the Northridge Earthquake in California, Hurricane Wilma in Florida and the most recent devastation in Louisiana, Mississippi, Alabama and Texas from hurricanes Katrina and Rita, have resulted in numerous insurers determining that in order to protect their solvency, it is necessary for them to reduce their exposure to catastrophic losses. The instability of the global reinsurance market which leads to increased reinsurance costs, also caused in part by these events, has also increased the pressure on insurers to reduce their exposure to catastrophic loss.  This pressure will result in an increase in reinsurance costs and could force an increase in homeowners insurance premiums.

     g.    The State of New Jersey is commonly viewed as one of the states in the region that is exposed to catastrophic events. Given the scope and magnitude of hurricanes Katrina and Rita, and given that New Jersey is the most densely populated state in the nation and because of the size of New Jersey, it is likely that a Category 3 or better storm could devastate the State.

So here we are -

Will will continue along the same failed path?

[Update: 11/5/12 – To their credit, DEP’s Office of Coastal Zone Management has done some good work on vulnerability assessment and adaptation, but I don’t think it has been implemented, or funded, and relies on voluntary local initiative and planning. There are no funds, no state support, and no state regulatory sticks that I am aware of.

This is another example of Christie delegating DEP responsibilities to the local level and dodging DEP regulation.

Also, that Office previously had greater resources, staffing, and influence because it used to report directly to the Commissioner. But it was dismantled and transferred when Martin abolished the Office of Policy and Planning and buried Global Warming initiatives in air quality.

That bureaucratic move by Marin is another subtle but significant way to dismantle environmental initiatives without fingerprints or accountability for having done so.

In contrast, illustrating his priorities, DEP Commissioner Martin created several new deregulatory and economic programs in the Commissioner’s Office.

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  1. Bill Neil
    November 1st, 2012 at 12:53 | #1

    Well Bill, the history of coastal “reform” in New Jersey, and I’m talking about land use, primarily, is not a happy one. If I recall correctly, the CAFRA “reforms” that were passed in the 1990′s in the wake of the failed attempted to get Governor Tom Kean’s Coastal Commission bill through in 1988-1989, gave landowner’s whose homes/buildings/businesses were destroyed by storms the unqualified right to rebuild.

    I fought that measure with everything I had, on the grounds of protecting the public interest, financial and environmental, but there were very few allies on our side who could match the power of local governments, the real estate industry and the NJ Builders who were steadfast in their opposition.

    If that’s where things stand today – and I believe it is, here is how the dynamics will play out over the coming months.

    When I agrued against this right to rebuild – as the Coastal Coordinator for the American Littoral Society under Dery Bennett (who passed away not long ago) I did not have today’s increasing evidence of global warming effects and the near certain rise in sea levels – although coastal scientists did believe that sea level was rising even back then, nearly a quarter of a century ago.

    The argument against the guaranteed right to build was built, even then, on two solid arguments: one, the ocean and the weather just proved that you had built in the wrong place, a dangerous one, and not just dangerous for the current property owner. As the 1962 Northeaster proved, and we have just seen demonstrated again by Sandy, when you build in a dangerous place at the coast, esp. on barrier islands, the structure that gets ripped off its foundations becomes a battering ram, landing in roadways, smashing into bridges, and into other citizen’s property.

    Second, restoring the status quo – which nature has just demonstrated was a bad risk to begin with, is not just a matter of the individual property owner: it has implications for neighbors who didn’t build in such a risky place, and it has implications for taxpayers everywhere, not just in NJ: thus Maryland residents will most likely, through federal disaster relief money – which I do not begrudge in general – be paying for the higher insurance rates,public and private (federal flood insurance) and the restoration of the gas lines, power lines and water lines that make life on barrier islands possible. Rebuilding in the same place is like doubling down on a bad bet.

    So following up just where you left this post off, NJ now has the chance to reconsider that absolute right to rebuild, which is a question of fairness not just for the property owners who have suffered losses, but for the entire public interest and all the taxpayers. Nature has, in essence, stepped in where the NJ DEP, most Governors and the NJ Legislature have declined to tread, and shown exactly where previous building decisions – many going back 50-100 years were unwise and unsustainable, except at great public cost.

    Notice that it was the first several rows of properties, not the entire island of development, that suffered the most. Hint, hint, with sea levels rising and storm intensities if not frequencies growing, better to have the public buy the riskiest properties – prices to be argued over after the infrastructure decisions are made, with the same dynamics swirling around the big “I” decisions as around the right to rebuild.

    NJ citizens should brace themselves for the following arguments, heard over the decades whenever these issues come up, on behalf of restoring everything just as it was before the storm – arguments now fundamentally weaker in light of global warming implications: we’re a $35 billion dollar economic dynamo, and we will pay for ourselves, so treat us accordingly, including the costs of Sea Walls (was the Sea Bright sea wall breached, or merely overtopped – I can’t tell from the field reports because of the imprecise use of the term “breached” – taxpayers put millions into its repair back in 1992-1993 – when it was undermined by a terrible late fall storm…)and permanent beach replenishment projects, costs which will run into the billions and billions if everyone gets its…and everyone will want it…

    So here’s another great chance to see how conservatives and the Republican Right look at these coastal and global warming issues under the spotlight of “fiscal responsibility” and fairness to the taxpayers of the state and nation, something close to the public good.

    And by the way: the sections of coastal land, barrier island land and bayside land which the facts on the ground have just proved untenable for buildings, can still add something for all citizens as public land or land held in the public trust, as parks, nature preserves and respites from a Jersey Shore that has tried to build on every last inch…

    I always held the view that the Jersey Coast could be everything it wants to be economically and mean everything it has to everyone’s fond memories – just as well at five hundred or a thousand feet from tidal waters as building right up to the high tide line. And I tried to write that into the failed legislation.

    Do I think that economics and political reality will play out any different this time? I doubt it, but the arguments against building just as before now have even more solid evidence that the future holds even higher storm surges and possibly more frequent storms, and most certainly, rising sea levels.

    Good luck to all the citizens of New Jersey.

  2. November 1st, 2012 at 13:08 | #2

    As usual Bill, you’re right on the money (bad pun!).

    I think the current politics will be even WORSE than past failed “reform” efforts – in fact, Gov. Christie is already beating the drums of “we will rebuild better than ever!” And there is ZERO media interest or organized pushback effort by planning or environmental groups as far as I can see, despite the new Global Warming Ammo (TM)

    If the State weren’t broke, I’m sure Christie and legislators would be tripping all over themselves trying to subsidize the redevelopers.

    Here are two gems from our 9/26/06 Report, where I focused on the CAFRA right to rebuild”:

    3) New development in coastal high hazard areas must be curtailed. It makes no sense to develop a catastrophic risk fund while continuing to put more people and property at risk along NJ’s already highly vulnerable and over-developed coastal zone. Loopholes in the CAFRA coastal land use law must be closed and existing restrictions on development in high hazard and environmentally sensitive areas strengthened;

    4) The current “right to rebuild” storm damaged properties must be eliminated;

  3. November 1st, 2012 at 13:09 | #3

    As usual Bill, you’re right on the money (bad pun!).

    I think the current politics will be even WORSE than past failed coastal planning “reform” efforts – in fact, Gov. Christie is already beating the drums of “we will rebuild better than ever!” And there is ZERO media interest or organized pushback effort by planning or environmental groups as far as I can see, despite the new Global Warming Ammo (TM)

    If the State weren’t broke, I’m sure Christie and legislators would be tripping all over themselves trying to subsidize the redevelopers.

    Here are two gems from our 9/26/06 Report, where I focused on the CAFRA right to rebuild”: (link above also:
    http://www.peer.org/news/news-releases/2006/09/25/jersey-shore-highly-vulnerable-to-storms-and-sea-level-rise/

    3) New development in coastal high hazard areas must be curtailed. It makes no sense to develop a catastrophic risk fund while continuing to put more people and property at risk along NJ’s already highly vulnerable and over-developed coastal zone. Loopholes in the CAFRA coastal land use law must be closed and existing restrictions on development in high hazard and environmentally sensitive areas strengthened;

    4) The current “right to rebuild” storm damaged properties must be eliminated;

  4. Bill Neil
    November 1st, 2012 at 13:35 | #4

    Bill:

    I wonder if you think it might make sense, as the best chance, odds for the environment and the general taxpayer, to fight for a Public Commission to oversee(oversea?) the rebuilding? It guarantees nothing, of course, but the chance to fight for, lobby for, in a public process, who will sit on it; my argument being that if left to the old forces of the local governments, builders and their power at the legislature, it surely will not turn out well, except for the failed status quo.

    Or maybe NJ PIRG can think up some way to keep the big decisions, where to and at whose expense, in front of the public via public referendum, ballot question?

    If you bump into them, give my best to Bill Potter and Ralph Izzo, who spent so much time on Governor’s Kean’s bill in 1988-1989.

  1. November 5th, 2012 at 10:17 | #1
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