Study: Power outages could cost up to $230 million and infrastructure costs up to $35 million in the future
Heat waves have killed hundreds of Californians and cost billions of dollars in the past decade, according to a report from the state insurance department, which discusses implementing extreme heat ranking and warning systems.
Many Malibuites opted to stay indoors and order food and grocery delivery instead of sweltering through the extreme heat that has besieged our community and state for the past weeks. As with every phenomena that affects citizens, there are economic impacts attributable to an event such as the heat waves. However, until a 2022 bill (AB 2238), introduced at the request of California Insurance Commissioner Ricardo Lara and enacted in Sacramento, mandated that the state insurance department assess the impacts of extreme heat in California, statewide efforts to assess the economic cost of extreme heat have not been coordinated.
“The challenges presented by extreme heat are no longer a distant concern; they are an immediate and escalating threat to our health, infrastructure, economy and overall well-being,” Commissioner Ricardo Lara stated in a letter accompanying the study’s release on June 28. “The pioneering analysis, ‘Impacts of Extreme Heat to California’sPeople, Infrastructure, and Economy,’ underscores the urgency of California’s efforts to create a heat wave ranking and early warning system. It’s a call for comprehensive strategies to address the previously unseen impacts of extreme heat.”
The department’s report included recommendations from an expert advisory panel and was completed with the support of Industrial Economics, Inc., a consulting firm with expertise in assessing the multisectorial impacts of climate change, as well as cooperation from insurance company representatives and the California nonprofit community.
Metrics matter
Utilizing NASA reports and other germane data, the department’s report assessed the uninsured and insured costs of seven extreme heat events in the state from 2013 to 2022, characterizing the estimates and metrics it utilized as conservative. The spatial extent of the seven events are the 2022 coastal inland event, the 2021 desert lands event, the 2019 Northern California coastal event, the 2018 Southern California coastal event, the 2017 full coastal event, the 2017 Central Valley event and the 2013 eastern California event.
The study assessed the costs of extreme heat during those events on the economic and energy sectors and infrastructure and the deleterious effects the events have on people. The study noted that power outages could cost up to $230 million and infrastructure costs could amount to $35 million in the future.
The report aims to put a price on heat waves so policymakers can budget for them in a similar way to how they budget for national disasters. Further, determining the costs means that elected leaders can enact policies to lower costs and make necessary infrastructure changes to lower the economic impact.
The takeaway
The study’s findings give one pause. The assessment concluded that intense heat waves during the parameter dates took the lives of several hundred Californians and had a total economic impact of $7.7 billion in the form of lost wages and productivity, agricultural and manufacturing disruptions, power outages, infrastructure damage, and more.
Historical context always assists in evaluating both the metrics utilized and the findings of such a report. According to Cal Fire, the state’s top 20 deadliest wildfires, dating back to 1933, killed 312 people. Whereas, the department determined that the death toll from the extreme heat events during the assessment period amounted to approximately 460 people.
A Los Angeles Times investigation article that dropped in 2021 posited that the true toll of extreme heat is “probably six times higher” than California’s official data from death certificates attributing deaths to heat exposure.
The newspaper’s examination of mortality data from the period between 2010 and 2019 shows that thousands more people died on extremely hot days than would have been typical during milder weather. The article noted that county coroners often record heat-related deaths as attributable to heart attacks and other medical conditions, not to heat exposure. The Times’ analysis estimated that extreme heat caused about 3,900 deaths during the decade studied.
Logically enough, the article noted, the public health challenge of extreme heat “disproportionately imperils the elderly and vulnerable,” a determination confirmed by the insurance department’s conclusions which also note that African, Native American and Hispanic citizens suffer the most from extreme heat.
Managing and mitigating the risk of extreme heat waves
“There is little to no insurance coverage available for some effects of heat events, such as lost wages for workers, power outages for residents and businesses and damage to railways,” the department’s 92-page report noted, adding that one of the study’s main goals was to establish extreme heat ranking and warning systems. Those systems are slated to roll out next year.
“Opportunities exist for improving our resilience to extreme heat.” Lara stated in his letter. “By investing in adaptive infrastructure, such as urban tree planting to reduce the ‘heat island’ effect, and implementing comprehensive heat action plans, we can significantly mitigate the impacts on our communities.”
Importantly, Lara added, “We want to partner in the development and promotion of innovative insurance products that protect outdoor workers, cover business interruptions, infrastructure and agricultural damages and emergency services during extreme heat events.” Lara encouraged, “all stakeholders, from local governments to private enterprises, to make the most of the study’s insights and recommendations.”
What does it mean for Malibu?
Three City Council positions will be filled by Malibu voters on Nov. 5. There are forthcoming candidate panel discussions. Perhaps those events should provide residents opportunities to ask the five candidates their positions regarding the city investing in adaptive infrastructure.
The November election also will give voters the opportunity to vote on a $395 million bond dedicated to finish building Malibu High School and to improve all four public schools. Perhaps residents who are preparing to vote on that bond may wish to contact Santa Monica Unified School District and its school board members to determine whether any proposed monies to be budgeted should the bond pass be allocated to build adaptive infrastructure for the schools. Perhaps it’s not too late to build a roof garden on the new school and to add such landscaping to the other schools. Perhaps budgets for the schools should allocate funds so that the schools can be utilized as cooling centers.
Given that the hot weather is off the charts, as we all struggle to adapt to extreme heat events, perhaps it’s time for all of us, including private citizens and local governmental entities to think outside of the box.