Communities along the Gulf Coast could suffer more than $350 billion in economic losses over the next 20 years due to growing environmental risks, according to a study released by Entergy Corporation (NYSE: ETR) and America’s WETLAND Foundation.
The study, "Building a Resilient Energy Gulf Coast," found that the economic
losses could increase up to 65% by year 2030 due to economic
growth and subsidence, as well as the impacts of climate change. On
average, the Gulf Coast region already faces annual losses of nearly
$14 billion. The results of the study were announced in New Orleans
during the DELTAS2010: World Deltas Dialogue conference.
"The study is a roadmap on how we can adapt to a world that we really don’t want to be living in, but may not have a choice," said J. Wayne Leonard, chairman and CEO of Entergy. "All the measures included in the report are meant to be a call to arms for policymakers."
"With the multiplier effect, the amount of economic loss to the Gulf Coast could rise to $700 billion, the gross domestic product for the entire region for one year," said Leonard. "No region in the country can afford to lose their entire GDP once every 20 years."
The Gulf Coast’s asset value is currently estimated to be more than $2 trillion and is expected to grow to more than $3 trillion by 2030. The study recommends a range of economic adaptation initiatives that can prevent a large part of the expected increase in losses. For example, by investing $50 billion in cost-effective measures over the next 20 years, such as improved building codes, beach nourishment and roof cover retrofits; Gulf Coast communities can avert about $135 billion in annual losses over the lifetime of implemented measures.
"Doing nothing is not an acceptable plan. That’s a plan to put Entergy out of business, a plan for misery and suffering for our customers and a plan that would devastate a region already economically impaired," said Leonard.
"The America’s WETLAND Foundation will take the study to communities throughout the energy coast in 2011 to help local officials and stakeholders plan for coastal resiliency in light of sea-level rise and ongoing land loss," said R. King Milling, chair of the AWF.
The AWF will also put the report in the hands of legislative leaders from Texas, Louisiana, Mississippi, Alabama and Georgia who are attending the DELTAS2010 conference. The National Conference of State Legislatures and AWF are hosting the first-ever Gulf Coastal Policy Forum today after the lawmakers tour the Mississippi River Delta by Louisiana National Guard helicopters.
Swiss Re, a global reinsurer, was a lead contributor to the research in the report and brought their natural catastrophe and climate risk assessment knowledge to bear on the challenge of quantifying climate risks. The methodology used in this study was previously devised and tested by a consortium of public and private partners, including Swiss Re, in a project on the Economics of Climate Adaptation.
A summary of the report can be read in its entirety here.
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The crude has stopped gushing and coastlines are largely clear of the thick goo that washed ashore for months, but the impact of the worst offshore oil spill in U.S. history will no doubt linger for year.
Read the AP story, "Assessing the Gulf, six months later" at the link below.