Five lessons for resilience
December 14, 2016
Resilience is commonly understood as the capacity to endure shocks and stresses. But for Lisa Dickson, Arup’s resilience leader for the Americas, this definition is too limiting. Instead, she posits, we should aim to thrive in the face of adversity. Rather than focus on preserving current conditions, we can encourage innovative thinking that will lead to stronger communities.
I recently asked Lisa what design professionals and their clients need to understand about resilience in order to make transformative solutions possible. What follows are five key lessons distilled from our conversation.
You can’t predict future risk based on past events.
The world is changing rapidly on many fronts, and it can be difficult to modify standard design and engineering criteria to reflect this. Heavily influenced by past events, our current data sometimes includes outdated reference points that may not adequately account for current threats like digital security gaps, supply chain vulnerabilities, and climate change, let alone emerging disruptors like the Internet of Things and financial technology.
If we can no longer always rely on yesterday’s data, neither should we rely on yesterday’s solutions. In resilience projects, there’s often a tendency to emphasize restoring the status quo. Instead, we should work to understand what aspects of a system are most critical to its overall functionality and enhance these to prepare for challenges we’re likely to see in the future.
We also need to recognize that some of the same disruptors that are increasing uncertainty can help us mitigate it. By learning to harness Big Data, the Internet of Things, and revolutions in the finance sector, we can begin to proactively identify potential areas of risk and create different funding frameworks to address them.
We need to define and value risk appropriately.
Insurance-based risk assessments are typically based on near-term time horizons, not the life expectancy of a given asset (say, a building or a power plant), let alone the population that relies on it. Proactive investment in risk mitigation to avoid future impacts is not incentivized with the current standard annual insurance premium period. Consider a house with a 1% annual flood risk: over a 30-year period, there’s a 26% chance that the house will flood. Extend this to 50 years and the probability rises to 39%.
When you factor in climate change things get even more complicated. Under the current business model, it will become impossible for insurance companies to continue underwriting the types of events we’re seeing — not just extreme ones (e.g., Superstorm Sandy), but also the cumulative impacts of smaller events (e.g., more frequent nuisance flooding). Long-term stressors like sea-level rise and rising temperatures are increasing risk exponentially. There is no way to harden against all that risk in the future.
And yet developments are being created with land-use practices that don’t account for these changes. It is likely that some of these developments will become uninsurable in the future. The question then becomes, who will own that risk? Emerging insurance products like resilience bonds are starting to address some of these challenges, but they won’t be able to create the needed shift in the industry by themselves.
More needs to be understood about the transfer of risk.
The transfer and transparency of risk, especially with respect to climate, is an important area that receives too little attention. From a contractual perspective, we need to know how it’s distributed both during the project phase and throughout the full lifecycle of that asset. How much is borne by the owner, the contractor, and the insurers? And how much is transferred between the public and private sectors? We need a clearer picture of exactly who owns what pieces of risk as a project moves forward — and of how this ownership structure affects that project’s overall resilience.
Performance metrics for resilience will be key in solving for this need. While there have been some preliminary efforts to develop such metrics, there’s currently no robust, standardized model. (Arup and others in the industry have been working to change this.) Incorporating such metrics within existing asset management systems will allow us to proactively monitor and address risks. The ability to make course corrections in real time is a vital characteristic of resilient systems.
We should focus on the 90% of infrastructure that’s already there.
We need to pay more attention to what’s already in play. Although resilience is an important concept for both new construction and rehabilitation projects, retrofits can be trickier because of the need to keep community services intact throughout the design and construction process. The only way to overcome this hurdle is to focus more on understanding the essential needs of the community in question, both in the long and short terms, and plan from there.
For example, if a coal-fueled power plant is coming toward the end of its useful life, there’s a clear short-term need to provide another energy source for the local community. But through a long-term lens, moving away from fossil fuels is also critical. Finding a way to replace the plant with a renewable power source while keeping electricity flowing during the transition period would serve both needs.
To be more resilient, look outside the fence.
Typical approaches to design projects focus primarily on a specific site or asset rather than taking a more holistic view. Even when we have the opportunity to consider resilience across a client’s full range of assets, or even an entire municipality, the range of solutions is often limited by our client’s jurisdiction. But everything is connected — every building, bridge, and data center is tied to larger energy, transportation, and telecommunications networks. The overall resilience of any resource or population is only as strong as its weakest link.
As a result, we need to emphasize coordinated efforts at a regional scale — and find new ways to fund them. If we look at resilience only on a project-by-project basis, we’ll never create meaningful change.