Vulnerability can multiply or divide

The 2024 Atlantic Hurricane Season opened with a big bang named Beryl, the earliest-forming Category 5 storm on record. Outcomes in the Caribbean, Gulf, and east Texas punctuated the forecast for more high-energy storms. But Chris and Debby were mostly rain events. Ernesto saved his worst for the open ocean. Since mid-August, not much.

Axios summarizes, “The Atlantic Ocean is near record warm, and a favorable La NiƱa climate cycle is developing in the tropical Pacific Ocean. Yet at what is normally the peak of hurricane season, the ocean basin has stubbornly stayed in a deep slumber.” (More and more.) Even as there remains plenty of time, heat, and opportunity for the Atlantic season to re-awaken.

Still, for those of us who begin mornings with NHC maps or ECENS loops, our respect for threat variability and uncertainty has been reinforced. The data models and forecast methods are insightful and helpful. But Complex Adaptive Systems resist precise prediction even as they reward strategic anticipation.

Threat vectors are especially difficult to predict. Potential reproduction rates for gray rhinos and black swans can overwhelm — and in this context our tendency for risk discounting is not entirely self-subverting (if we are self-aware and self-correcting regarding this cognitive vulnerability).

Tropical Storm Ernesto produced plenty of mayhem in the Lesser Antilles, Puerto Rico, and US Virgin Islands. But Ernesto did not reach hurricane strength until north of Puerto Rico and east of the Bahamas. Shipping and swimmers could avoid Ernesto’s threat by not exposing their vulnerability and thereby not suffering consequences.

Threats are multiplied or divided by vulnerability and this outcome is then multiplied by consequence. Electrical grids are innately vulnerable to strong storms, the stronger the storm the greater the threat. The more innately fragile a specific network’s structure, the greater the impact of any threat’s impact. The larger the population dependent on this network, the greater the consequence of this interplay of threat with vulnerability.

The interdependencies of threat, vulnerability, and consequence are highlighted in a recent analysis of global insured risk. Verisk reports, “the average annual loss (AAL) from global natural catastrophes has reached a new high of $151 billion (with non-crop losses making up $119 billion). Additionally, the average exposure growth is expected to be 7.2 percent… ” (See chart below.)

Verisk gives close attention to 1) Rapid Urban Expansion, 2) Surge in Event Frequency, and 3) Climate Variability/Climate Change as principal sources of this exposure growth (amplified by inflation). Climate change is implicated in increased event frequency. Urban expansion has been especially pronounced in places exposed to climate related hazards (e.g. hurricanes, wildfire).

Verisk models for US/Caribbean hurricanes and wildfires project AAL will increase “at least 1% year-on-year for each of these perils due to climate change.” As this threat-level increases incrementally, in some places vulnerability and consequence multipliers can increase much faster. As more people gather in more densely populated places, critical infrastructure, supply chain capacity, and exposed loss potential follow. Even if a hazard’s hitting power remains the same, vulnerability multiplied by consequence makes for a much fatter target. A softball is easier to hit that a baseball. Even I can hit a volleyball. When an unusually powerful hitter encounters one of these fat targets — say an M8-plus earthquake at Memphis or Seattle — take cover quick.

In most of the United States, Japan, and Europe most supply chains are resilient — unless concentrated flow capacity is seriously disrupted or destroyed. I give most of my attention to how supply chains can continue to fulfill demand even when the grid is gone, telecoms are sparse, and transportation networks are fractured. When concentrated capacity survives for crucial products (e.g., water, food, and fuel) restoring flow can be very tough but doable. The vulnerability that is most challenging to mitigate is the loss of a high proportion capacity concentration (or two or three). But even this vulnerability can be reduced if strategically anticipated and meaningfully engaged before the hit is received.

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September 7 Update: AccuWeather outlines five reasons for the paucity of tropical storms this season.