Risks in the Age of Extreme Weather Events: Incidences of Extreme Weather
May 29, 2018
The Issue

Recent extreme weather events (EWEs) have had profound social and economic impacts. In 2017 alone, 240 fatalities and losses exceeding $193 billion resulted from 50 inches of rainfall during Hurricane Harvey, up to a 14-foot storm surge during Hurricane Irma, and over 1.3 million scorched acres during the California wildfires (NOAA 2018). Compounding this existing exposure to natural hazards, climate change is expected to increase the frequency, intensity, and duration of EWEs. The following summarizes some types of EWEs, their potential consequences for businesses, and steps for taking a proactive response.

Tropical Cyclones

A warming climate affects the environmental parameters controlling tropical cyclone behavior, most notably the temperature of seawater that fuels cyclone activity. As a result, the intensity of cyclones (hurricanes) is projected to increase by 2–11% globally by 2100 (Knutson et al. 2010). Additionally, while the overall frequency of cyclones in the Atlantic basin will likely decrease, the frequency of Category 4 and 5 cyclones is predicted to nearly double by the end of the century. These extreme events have historically accounted for 48% of hurricane-related losses in the United States (Bender et al. 2010).

Given the increased threat of destructive cyclones, incorporating changes in storm intensity and frequency into decision-making is critical for minimizing business risk. In particular, extreme tropical cyclones pose challenges when assessing the future value of investments, evaluating the exposure of existing assets, and developing informed business strategies. These considerations are quickly becoming key parts of business operations, with asset managers like BlackRock now urging companies to provide stakeholders with climate-related financial disclosures (Chasan 2017).

Coastal Flooding

The increased intensity and frequency of extreme cyclone events translates into an increased likelihood of coastal flooding due to storm surge. This is compounded by rising sea levels, which, even under optimistic climate projections, are expected to increase 0.4–0.9 m globally by the end of the century (Figure 1; Kopp et al. 2014). To put this in perspective, a 0.9-m increase in sea level would inundate 5% of residences in Miami-Dade County (Tebaldi et al. 2012). For places like New York City, the combined effects of changing cyclone behavior and sea level rise will make the 1,000-year flood event 4–33 times more likely by the end of the century (Lin et al. 2016).

The widespread impact of coastal hazards has led to a concerted effort to incorporate sea level rise and extreme flooding into building design. New York City, for example, has provided new resiliency guidelines requiring projections of future flooding for new construction (Kusnetz 2017). With building standards and regulatory frameworks rapidly evolving, the need for businesses to keep track of new developments is critical.

Weather Fig 1

Figure 1. Projected local sea level rise (m) in 2100 based on continued emission through the end of the century (Source: Kopp et al. 2014)


Increases in amounts and frequencies of precipitation in some regions becomes more probable as atmospheric moisture from evaporation increases with a warming climate. This trend has been strongest in the Midwest and Northeast, where annual precipitation has increased by up to 15% since the start of the twentieth century (Figure 2). The likelihood of extreme events in this region has likewise increased, with the amount of rainfall from heavy precipitation events increasing by 30% over the same period. Even under a rapid reduction in greenhouse gas emissions, extreme daily precipitation events will occur nearly twice as often by the later part of this century (Melillo et al. 2014).

The increased severity of precipitation has resulted in more costly and damaging flood events—a trend only expected to worsen (Melillo et al. 2014). Particular challenges facing both public and private stakeholders include implementing effective flood controls, infrastructure protection, evaluating assets in exposed flood plains, and managing reservoir quality.

Weather Fig 2

Figure 2. Observed change in average annual total precipitation during 1991–2012 relative to the 1901–1960 average (Source: Melillo et al. 2014)


While average precipitation in the United States has increased by approximately 5% over the past century, the Southwest has seen up to a 15% decrease in precipitation over the same period (Figure 3). This decrease has coincided with less precipitation falling as snow, making capturing runoff for storage more difficult (Melillo et al. 2014). Aridity comparable to the Dust Bowl of the 1930s is expected to become the new climatological baseline for the Southwest within decades (Seager et al. 2007).

Longer, deeper, and more frequent droughts pose tremendous challenges to water supply systems and to businesses that depend on stable water supplies. As a result, proactively improving and designing infrastructure systems that keep pace with a dynamic climatological baseline is essential for a sustainable future.

Weather Fig 3

Figure 3. Palmer Drought Severity index averaged over states in the Southwestern United States from 1895–2015. The heavy line represents
the nine-year weighted average (Source: U.S. EPA 2016)

Extreme Heat

Average temperatures in the United States have increased by up to 1.9˚F since the turn of the twentieth century, with most of the warming occurring since 1970 (Melillo et al. 2014). Heat waves have also become more frequent, especially in western regions of the country. This increase in extreme heat events will continue, with the return period of extreme heat days decreasing from 20 years to 2–3 years by the end of the century (Melillo et al. 2014).
Exposure to extreme heat is a leading cause of weather-related deaths in the United States, with over 600 fatalities on average every year (CDC 2013). In addition to public health, extreme heat also poses significant challenges to business operations. These include a higher likelihood for business closure, increased difficulties with business procurements, and diminished working standards for employees.


Increasing aridity and occurrences of extreme heat translates into more prevalent and devastating wildfires. In the last decade alone, the United States has seen eight wildfires where losses exceeded $1 billion. Most recently, the 2017 California wildfires resulted in $18.2 billion in losses and 54 fatalities (NOAA 2018). A warming of 1˚C is predicted to increase the median annual area burned in the United States by up to 400% (NRS 2011).

Wildfires pose major ecological, hydrological, and geological hazards to communities and businesses. As a result, proactive and reactive actions that mitigate and remediate the effects of wildfires are essential.

Actions Needed and How Exponent Can Help

The increasing incidence and severity of EWEs is a pressing challenge for businesses around the world. Exponent provides essential consulting services to help businesses confront EWEs. These services can be generalized as a comprehensive multi-step approach. First, Exponent analyzes the current and planned operations of businesses in areas prone to extreme weather. Second, regional, and local hazard assessments are used to determine the exposure of assets to extreme events. Next, the implications of EWEs on business operations are evaluated. Finally, proactive solutions are developed to mitigate risks, propose engineering alternatives, and plan for the future.


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