Category Archives: Economic development

Why Clean Energy Will Be Cheaper

Dominion's Cove Point

Dominion’s Cove Point

By Peter Galuszka

The Sturm und Drang to which utility executives, coal companies and politicians have subjected Virginians as they oppose President Barack Obama’s Clean Power Plan to reduce carbon emissions has always been a deliberate distraction from what’s really happening.

According to them and their confederates at the State Corporation Commission and the state Department of Environmental Quality, the clean air act which seeks to reduce carbon dioxide emissions by a certain date is a foolhardy, ill-intended bureaucratic effort to put coal out of business and slap ratepayers with bigger bills.

I had a moment of clarity when I read this morning’s Local Opinions page in The Washington Post  and a saw an article by Jon B. Wellinghoff. He is the immediate past chairman of the Federal Energy Regulatory Commission so he likely knows a little about energy.

His argument is that basic economics go against the electricity and coal industries’ arguments that reducing carbon will be too expensive. He cites a study by PJM, the large electricity grid of which Virginia is a part. “PJM announced this week that Virginia’s energy costs would be lower under the CPP than without it,?” he writes.

Why so? Wellinghoff says that utilities like Dominion are riding a nice low price natural gas bubble. Gas in the U.S. is going for $3 per million British Thermal Units. How long it will last is the crucial question.

Natural gas costs three times as much in Asia and Europe and (knock, knock) guess which companies are scrambling to get a new set of terminals so they can export it? Electric utilities like Dominion, that’s who.

Dominion is pressing ahead to convert its Cove Point liquefied natural gas plant on the Chesapeake Bay kin Maryland so that it can export gas to Japan and India. Dominion is also pushing a controversial $5 billion pipeline from West Virginia gas fracklands to the southeast. A spur of it would run to port areas in Hampton Roads but if you suggest that maybe Dominion plans to export gas from it, the public relations people get a mite testy.

Wellinghoff doesn’t specifically identify Dominion’s plans but he says there are 14 gas expert terminals underway.

For Virginia ratepayers, that means that a cheap, local commodity will become an expensive, global commodity. The United States will export a commodity and import price volatility.

Who will make money by exporting gas and messing up domestic prices?Dominion, that’s who.

It’s import to remember that the low price gas bubble will pop someday. Therefore, the state needs to stop whining about going to renewables and start applying them. Utilities need to make it easier for homes and business to deploy solar panels and sell extra juice back tot he grid. The U.S. uses 40 percent of the power it generates because of inefficient grids. Virginia is No. 35 in terms of state energy efficiency. Where are efforts to improve this?

Virginia’s disappearing coal industry has been complaining for years that government regulation is driving it out of business. The truth is that coal seams are becoming too uneconomic to mine. Gas is eating its lunch. I went to a Platt’s coal conference a couple of years ago In Florida where I learned that gas would have to jump to something like $8 per million BTU to make Virginia coal profitable again.

That might happen is gas prices rise as Wellinghoff predicts. But he is right that the cadre of utilities are barking up the wrong tree.

The Low Hanging Fruit of Higher Ed

Six-Year Outcomes for Students Who Started at Four-Year Public Institutions, by Origin State. Source: State Council for Higher Education in Virginia (SCHEV)

Six-Year Outcomes for Students Who Started at Four-Year Public Institutions, by Origin State. Source: State Council for Higher Education in Virginia (SCHEV)

There are two ways to increase the percentage of Virginians earning a college degree. One is to expand enrollment, push more students through the system and hope for the best. The other is to make sure that a higher percentage of students entering the system actually complete their degree requirements. For all the flaws of Virginia’s system of higher education, shepherding students through to the completion of their degree is something that Virginia colleges do exceptionally well.

Todd Massa is the person who thinks about this (or, perhaps, I should say he blogs about it) the most. “As I point out endlessly,” he blogged recently, “every two years, enrollment projections consist of new students plus continuing students. If year-to-year retention increases, total enrollment can increase while the numbers of new students is held constant.”

Putting a focus on degree completion rather than enrollment has two immense benefits. First, the state gets more bang for the buck — more college grads per dollar expended. It’s cheaper to help a marginal student complete his or her degree, I would argue, than to add capacity for a new student. Second, it’s better for the students. Attending college, amassing student debt and failing to earn the educational credential is not a good way for a young person to launch a career.

As the state with the third highest six-year completion rate in the country, Virginia might not seem to have much room for improvement. But I would argue the contrary. Taking six years to earn a four-year degree is nothing to brag about. There’s still lots of slack in the system. We can and should do better — both for the benefit of students and the benefit of taxpayers who support a system of higher education that is building capacity to accommodate the enrollment of more students.

In the context of my previous blog post, “The Southern Migration of Educated Workers,” Virginia should aim to raise the percentage of home-educated workers with college workers within current fiscal constraints, not by spending more money. That’s not necessarily what Massa is saying, but it is the conclusion I draw from his analysis. In other words, it’s entirely possible to do more with less.

– JAB

The Southern Migration of Educated Workers

educated_workersby James A. Bacon

In a knowledge economy, the educational level of the workforce is a key driver of metropolitan prosperity. Higher education levels, especially in the fields of business, science and the arts, are associated with greater innovation, entrepreneurial activity and wealth creation. A half century ago, the distribution of brain power in the United States was highly lopsided, favoring the West Coast and Northeast. But, as Joel Kotkin points out in a column today in New Geography, the geography of workforce education has shifted.

States that were the most educated in 1970 still rank among the brainiest states today. But the education gap has narrowed as a steady migration of educated workers to the Sun Belt has lifted the education levels of Southern states in particular. States like New York and Massachusetts have not lifted their averages nearly as rapidly as many other states.

“There’s a movement of educated people — critical to many industries — to formerly backwater states,” writes Kotkin. “Over time jobs, too, are following this path. In the years ahead we can expect these trends to continue or even accelerate.”

Virginia stands in an interesting position nationally. It is one of the few states that ranked among the best educated 50 years ago and has also has been one of the bigger brain gainers.

Virginia ranked 13th in the country for growth in the education level of its population, according to Kotkin.

  • Increase in population of college grads: 517%
  • Percentage of population with college degree (1970): 12.3%
  • Percentage of population with college degree (2013): 36.1%

I would love to drill deeper on this data but lack the means to do so, at present. Conceptually, we need to be looking at two distinct phenomena: (1) the state’s ability to educate its children and young people, in effect, to grow our own educated workforce; and (2) the ability of metropolitan regions to recruit and retain educated workers, which entails an entirely different set of issues.

States such as New York and Massachusetts churn out a lot of workers with college degrees but, for whatever reason, are unable to employ them all. Many emigrate in search of better job opportunities and/or higher standards of living.

With a few exceptions, I don’t see many people in Virginia doing much more than mouthing platitudes — spend more money to educate more young people, regardless of the supply and demand for different types of degrees. We need to move the discussion to a higher level. More on that in the next blog post.

Another Russian Reformer Murdered

nemtsov killedBy Peter Galuszka

It was a personal shocker to read of the murder in Moscow of Russian reformer Boris Nemtsov, the latest in a long string of killings related to the tragic fight for change in that country.

Nemtsov was gunned down Friday in a drive-by shooting as he walked across Moskvoretsky Bridge a short distance from the Kremlin and Red Square.

The outspoken 55-year-old former nuclear physicist turned government official was a key figure in the far more hopeful years of the early 1990s when bright young people tried (in vain) to move Russia beyond the kleptocracy of the Communist era.

Nemtsov pushed capitalist reforms by trying to root out corruption. He simplified establishing businesses by taking the registration process out of the hands of crooked bureaucrats. He advocated transparency in bidding contracts. More recently, he revealed billions of dollars in payoffs at the Russian Winter Olympics last year at Sochi.

Naturally, Nemtsov ran afoul of Vladimir Putin, the former KGB officer who beat out Nemtsov as Boris Yeltsin’s successor. Putin is the spearhead of the old power elite that has seized control over the past 15 years, rolled back democratic reforms, unleashed a torrent of inside business deals, and pushed the worst military conflict in the region (Crimea and Ukraine) since the Cold War.

Nemtsov was due to lead a Moscow protest rally against Putin’s bloody Ukrainian adventurism that has killed 5,800 people. He was to stand in for Alexei Navalny another reformer who has been imprisoned for handing out leaflets at a subway station.

As he was taking a walk on an unusually warm winter evening, a car drove up. Six shots were fired. Nemtsov was killed by four bullets.

He is the fifth person – either Russian or foreign – that I have dealt with personally who has been murdered. I reported from Moscow for BusinessWeek in the 1980s and 1990s.

Here are a few examples: American businessman Paul Tatum involved in a dispute with a Chechen partner was slain by 11 bullets to the head and neck at a subway station that I used to frequent. Paul Klebnikov, an American editor of Russian-language Forbes magazine, was shot near his apartment. Russian investigative journalist Yuri Shchekochikin, a friend who got me an assignment to write for Literaturnaya Gazetta, died in an apparent poisoning.

I had interviewed Nemtsov back when he was pushing far-reaching and radical change in the the city of Nizhniy Novgorod, formerly known as Gorky, east of Moscow.

He is the highest-profile reformer to be killed during the regime of Putin who says it was a contract killing and that he will oversee the investigation “personally.”

The Center-City Job Resurgence

job_shift

by James A. Bacon

After decades of losing jobs to the metropolitan periphery, the nation’s downtown employment centers have been recording faster job growth since the recession than areas located further from the city center, according to a new report, “Surging Center Job Growth,” by Joe Cortright, president and principal economist of Impresa, a consulting firm specializing in regional economic analysis.

Cortright compared job growth between city centers (defined as within three miles of the center of a metropolitan region’s central business district) and outlying areas. During the go-go years of the 2000s-era real estate boom (2002-2007), the periphery enjoyed rapid job growth while city centers stagnated. Since the recession (2007-2011), city centers have gained jobs while the periphery has lost them.

Those  numbers represent a composite of 41 of the nation’s largest metropolitan regions for which Cortright could find comparable data. The national trend does not apply to all metropolitan regions. Indeed in two of Virginia’s largest metro areas — Hampton Roads and Richmond — the periphery continued to out-perform the city centers.

richmond_hr

What’s going on? The big-picture story is that the industry mix of the national economy is changing, and that shift increasingly favors central business districts.

In general, knowledge-oriented industries that require considerable face-to-face interaction are clustered in city centers, while goods producing and moving industries are more decentralized. Knowledge-oriented industries tend to use land much more intensively than goods producing and distribution centers.

The biggest construction declines occurred in the construction and manufacturing sectors, which tend to be located on the periphery. Those sectors have been slow to rebound during the recession, but if and when they do, Cortright said, the compositional disadvantage of the periphery might diminish. (By “compositional,” he means the advantage of disadvantage conferred by industry mix.) However, he argues that center cities will continue to enjoy generalized “competitive” advantage.

These factors — the growing preference of well-educated  young adults for urban living, the shift of companies to city centers to tap this labor pool, the growing pull of the “consumer city,” the growth of “eds and meds,” the continuing relative decline of manufacturing and distribution, and the waning of major investments in new highway infrastructure — all give us reason to believe that the shift toward city center growth is not a temporary anomaly.

A closer look at Virginia metros. How do we explain the departure of Hampton Roads and Richmond from the larger, national trend? Remember that the “national” trend is derived from composite numbers that include a lot of variability. The trend does not apply equally everywhere.

Hampton Roads is a special case because its economy is so dominated by military spending, and military employment is concentrated in military bases. The military makes its decisions where to grow and contract based on different factors than the civilian economy.

As for Richmond, my sense is that downtown living and employment has surged since 2011, the most recent years cited by Cortright. The competitive advantages of central business districts apply to the Richmond region as well, and we’ll see the proof in more recent numbers. Another possibility is that the three-mile definition of “center city” does not fit Richmond, one of the smaller metros surveyed. The economic vitality of central districts like Shockoe Bottom and Manchester may be offset by declining employment in the 2- to 3-mile band, which are really aging suburbs.

You Must Be Joking

The RTD reports today that the city of Richmond will PAY the Redskins about $250,000 for having summer camp in the city. Is this true or did the newspaper publish the April Fools edition a month early?

– Les Schreiber

Government Fragmentation and Economic Growth

fragmentation

by James A. Bacon

What are the secrets of successful metropolitan regions? According to conventional economic-development thinking here in Virginia, success hinges upon the ability to maintain a positive business climate, a concept that encompasses everything from tax rates to the tort system, the transportation network to the education level of the workforce. But a new publication by the Organization for Economic Cooperation and Development (OECD), “The Metropolitan Century,” identifies a critical variable rarely discussed in Virginia: the fragmentation of municipal governance.

Metropolitan regions characterized by higher levels of municipal fragmentation tend to experience lower economic growth rates than metros with less fragmentation, contends the OECD report, as seen in the chart above. Metropolitan regions run the gamut in the degree of fragmentation, from the United Kingdom with an average of 0.4 municipalities per 100,000 residents to the Czech Republic with an average of 2.43 per 100,000. All other things being equal, the report says, “For each doubling in the number of municipalities per 100,000 inhabitants within a metropolitan area, labour productivity in the metropolitan area decreases by 5-6%.”

(I would surmise that the number of municipalities in Virginia falls in the “moderately low” category. For example, the 1.7 million inhabitants of the Hampton Roads metropolitan area are governed by 16 jurisdictions, including two in North Carolina, or slightly less than 1.0 per 100,000 population.)

Fragmented government inhibits economic growth through its impact on transportation and land use, suggests the OECD report. The inability to plan regionally can result in “sub-optimal provision of transportation infrastructure” that falls short of its potential to provide the connectivity required by a productive, growing regional economy.

In the context of large urban agglomerations, land use planning and transport planning are often the fields where the need for co-ordination is greatest. … Housing and commercial developments need to be well connected to other parts of the urban agglomeration, and public transport in turn relies on a minimum population density to operate efficiently.

Integrating transport and land-use planning makes it easier to utilize value-capture tools for financing transportation infrastructure. “Public spending for infrastructure increases the price of adjacent land,” states the report. “Often, this price increase provides a publicly funded windfall profit to land owners or developers. Land-value capture tools aim at recapturing these windfalls from developers in order to (partially) fund the infrastructure investment.”

Echoing arguments that EM Risse made on this blog years ago, the OECD report observes that administrative borders in metropolitan areas have not evolved in concert with economic and social patterns.

While good governance structures are no guarantee for good policies, it is very difficult to design and implement good policies without them. … Administrative borders in metropolitan areas rarely correspond to these functional relations. Often, they are based on historical settlement patterns that no longer reflect human activities.

A few decades ago, there was a move in Virginia to consolidate cities and counties in order to achieve administrative efficiencies and economies of scale. There were some notable successes — Virginia Beach merged with Princess Anne County, Suffolk merged with Nansemond County — but the movement petered out.  The OECD report spelled out reasons for resistance to consolidation that apparently apply across the economically developed world:

Common reasons for the persistence of administrative borders are strong local identities and high costs of reforms, but also vested interests of politicians and residents. Even if policy makers try to reorganize local governments according to functional relations within urban agglomerations, it is often difficult to identify unambiguous boundaries between functionally integrated areas.

There doesn’t seem to be any appetite for consolidating local governments in Virginia, but the OECD report does suggest an alternate strategy: Identifying specific functions that can be transferred to regional authorities.

Would it be worth the effort to invest political capital in such endeavors? Take a look at the chart at the top of this post. The big dividing line in economic growth is between medium-low and medium-high fragmentation. Assuming Virginia metropolitan regions fall into the medium-low category — and I do confess that I do not know exactly what the dividing line is — there doesn’t seem to be much of a growth premium from consolidating our way into “low fragmentation” status. Indeed, I would argue that some competition between jurisdictions in a metropolitan area is a good thing — the ability of inhabitants to “vote with their feet” helps keep the politicians honest.

But that’s a shoot-from-the-hip reaction based upon one OECD chart. If Virginia is serious about positioning itself for economic prosperity in the years ahead, our governance structures, rooted in 19th-century settlement patterns, surely need to keep up with economic reality.

Closely Watched Trains?

wva oil trainBy Peter Galuszka

The small town of Pembroke in southwest Virginia is used to seeing endlessly long unit trains of coal cars rumbling past. But last week, it got an unexpected surprise – trains of similar length hauling crude oil from North Dakota’s Bakken fields started going by.

According to Reuters, Pembroke is one of many Virginia towns that are being affected by CSX’s derailment and explosion of oil tank cars filled with Bakken oil a few miles east of Montgomery, W.Va.  on Feb. 16. The massive blast sent fireballs hundreds of feet in the air and forced the evacuation of nearby residents including a college. It also stopped all rail traffic on a major, east-west CSX line for days.

A similar derailment involving a CSX oil train happened last April in Lynchburg on the same rail mainline. Several tank cars caught fire down causing a fire and a spill into the James River.

So, after the West Virginia incident, CSX got in touch with rival Norfolk Southern to see if it could reroute oil trains on some of its lines.

This brings up another issue – who should be informed when new railroad trains hauling potentially explosive or otherwise hazardous cargoes suddenly show up in your backyard? Do they have to tell you so you can get the flashlight, thermos and sleeping bag ready for your immediate evacuation if necessary?

CSX says it has informed appropriate public safety officials of such route changes, but is loath to let the general public in where it is sending unusual trains. Security and proprietary information, you understand.

CSX needs to keep its tank cars rolling to big oil terminal in Yorktown near the Chesapeake Bay. That site had been an Amoco refinery for years but the refinery shut down and was switched to an oil water terminal now owned by Houston-based Plains All-American.

The facility receives Bakken shale oil cars and loads the crude on barges that are then pushed or towed to East Coast refineries, notably in the Philadelphia area. Presumably, if petroleum exports from the U.S. start again, the Yorktown site would be excellent embarkation point.

So, instead of having tank cars with Bakken crude trundling from Charleston, W.Va. through the New River Gorge and on to Lynchburg, they will go on more southerly NS lines through places like Pembroke and Roanoke. Then they will be switched at Petersburg to CSX lines and go north to Richmond and east to Yorktown.

It looks like Richmond could potentially get it either way. On the usual route, oil trains pass by downtown on an elevated bridge which would be quite a mess if a derailment happened there. According to the Forest Ethics Website, all of downtown Richmond to about one half of a mile on either side would have to be evacuated if a major derailment with fires and explosions came.

With the temporary rerouting, Richmond would still be in serious jeopardy in case of a derailment. If I’m reading the map correctly, trains would still pass through the city.

So, you have to ask yourself – why does CSX get away with keeping all this secret? They claim they let “appropriate” public safety officials know, but the Richmond Times Dispatch last year quoted a Richmond fire officer in charge of hazardous situations as saying he had a hard time learning from CSX what a “worse case” scenario would be in the event of a Richmond derailment.

Part of the problem is PR. Bakken shale oil comes from controversial hydraulic fracturing. The uptick in production has turned America’s energy picture on its head. It has also made for big jumps in oil rail traffic. Another problem is that Bakken oil tends to be more explosive than other types.

According to the Association of American Railroads, oil shipments by rail jumped by 9,500 carloads in 2008 to 500,000 shipments last year. Accidents are way up. In 2013, tank cars carrying Bakken crude somehow got loose in Lac-Megantic, Quebec. They rolled through the small town, derailed and exploded. The blast killed 47 and wiped out half of downtown.

According to a recent probe by the Associated Press, a federal study predicts that oil shipments will rise to 900,000 shipments this year. The study predicts that trains hauling petroleum will derail 10 times a year over the next two decades. They could possibly cause $4 billion in damages and kill hundreds of people, the AP reports.

What to do? Build pipelines, I guess, but that’s been highly controversial as well as the experience with Dominion Transportation’s efforts with a $5 billion gas pipeline through the state and the controversy over the Keystone XL show.

Better, newer, safer tank cars? Maybe, but the West Virginia and Lynchburg derailments both involved new “1232” models. The same type also caught fire recently in Timmins, Ontario.

Federal rules require railroads to tell local officials where they are carrying Bakken crude, which is more explosive than other types. Railroads like CSX claim the information is proprietary, according to Reuters. That’s rather pointless. If the goal is to keep “proprietary” information from competitors, Norfolk Southern, CSX’s biggest competitor, already knows about it because it has agreed to let CSX use its rail lines.

And don’t ask some public officials. West Virginia officials have gone along with keeping much of the information secret. Mountain State officials responded to an Freedom of Information Act request by redacting much of the data they finally gave out.

Not only do the railroads need to clean up their act, they should be forced to be more forthcoming about where the next evacuation might be.

Land, Density and Resilience

Flood-prone areas of south Hampton Roads. Source: Virginiaplaces.org.

Flood-prone areas of south Hampton Roads. Source: Virginiaplaces.org. (Click for detail.)

One more takeaway from the Resilient Virginia launch conference yesterday: All other things being equal, more compact communities are more resilient communities.

Like Bacon’s Rebellion, Cooper Martin, program director of the Sustainable Cities Institute, is a big fan of Joe Minicozzi and his maps and graphics showing how dramatically land value-per-acre varies between core urban areas, suburbs and the countryside. Densely settled urban cores have land values that are literally a hundred times higher per acre than low-density shopping centers and large-lot subdivisions.

In my commentary, I have focused mainly upon the fiscal folly of building disconnected, low-density development. The infrastructure — the roads, utilities, sidewalks and other amenities — are more expensive per household to maintain. But Martin added a new dimension when addressing the Resilient Virginia conference yesterday. Low-density development makes it more expensive to harden homes and businesses against disruption and catastrophe. When the taxable value of land is high, it’s easier to support expensive investments to protect that land than when the value of the land is low.

So, to take Hampton Roads, which I have written much about recently, resilience planners need to take into account not only which areas are flood-prone, but which urbanized areas have land values high enough to make them economically justifiable to protect.

It’s going to be gut-wrenching and agonizing, but local officials must come to grips with the reality that much of the development that has taken place is fiscally indefensible. The region cannot possibly afford to protect every low-density subdivision in every flood-prone region — much less the roads and bridges providing connectivity for them — no matter how loudly unhappy homeowners howl at the prospect of being abandoned. The sooner local officials begin making these determinations, the sooner developers will stop building in indefensible areas and the fewer the naive homeowners who will be harmed.

As a practical matter, Hampton Roads municipalities will have to evolve to a pattern of denser development on higher land. Where development exists in flood-prone areas, there will have to be sufficient density to justify spending millions of dollars on protective measures. Fortunately, this is a slow-motion problem. The region has decades to adapt. But it needs to begin now — when complex and painful decisions must be made, decades can slip away in no time at all.

– JAB

The Non Global-Warmist’s Case for Resiliency Planning

hampton_roads_flooding2

by James A. Bacon

The key to building a strong resiliency movement — making communities more adaptable in the face of natural and man-made disasters — is finding common ground. So argued Steven McNulty, director of the U.S. Department of Agriculture Southeast Regional Climate Hub, in addressing the launch event of Resilient Virginia this morning.

Fear of rising temperatures, droughts and sea-level rise is a major impetus behind the increasing emphasis that all levels of government are placing on resiliency. But political views about climate change are highly polarized, McNulty said. “Are you a fear monger, or are you a denier? We need to get beyond that.”

Most climate scientists believe that man-made climate change is a cause for concern. But the forestry land managers McNulty deals with do not. In a recent survey, he said, “only 10% of Southeast foresters thought that climate change is man-made and real. The agricultural community is almost as disbelieving.” As it happens, their perceptions are not without basis, he added. Rising temperatures in the Southeastern U.S. have been far less pronounced than anywhere else in the country.

It’s hard to mobilize people who don’t believe in catastrophic man-made global warming to change the way they do business. “Don’t talk climate change; you’ll lose a lot of folks,” said McNulty. But flip the issue to climate variability, and the conversation takes on a different tone. Everyone acknowledges that temperatures and precipitation fluctuate, and everyone would like to protect themselves from those fluctuations. “You don’t need global warming to have big disasters.”

McNulty was one of several speakers Thursday morning who made the case for resiliency planning. The resiliency issue hasn’t made big inroads in Virginia but Resiliency Virginia, a non-profit group of state and local government officials, environmentalists and private companies, hopes to change that. The group has a mission of educating the public, sharing best practices and encouraging people to take action.

In Virginia, the most pressing resiliency issues are in the low-lying Tidewater region, especially the Hampton Roads metropolitan area where thousands of people and millions of dollars in private buildings and public infrastructure are exposed to flooding. As Brian Moran, secretary of public safety and homeland security, told the gathering, a one-and-a-half foot sea level rise would inundate 82 square miles of dry land in Virginia, 15 miles of interstate highway, miles of railroad track and significant port acreage.

While there is plenty of controversy over how rapidly the sea level is rising in Hampton Roads — not everyone accepts the prediction that the sea level will rise 18 inches by 2050 — few would deny that between subsidence (partly caused by the draw-down of aquifers, partly by the shift in tectonic plates) and the slow-but-steady sea level rise seen over the past century unrelated to man-made climate change, flooding will become increasingly severe.

Flooding in low-lying areas is not the only potential disruption to Virginia communities. Flash flooding is an issue in urban areas where the ground has been covered by asphalt and the ground has lost is capacity to absorb rain water. Ice storms, snow storms and drought are recurrent concerns. Some worry about the impact of massive solar flares that could overwhelm the electric grid. There are man-made issues as well, such as potential terrorist strikes against critical infrastructure, particularly the electric grid.

In Chicago urban flooding is a significant issue, said Cooper Martin, program director for the Sustainable Cities Institute. When city officials began mapping where the insurance claims were occurring, they expected them to cluster in the flood plains. The traditional response to flooding had been to bring in the engineers, build some levees and build some dams. But close analysis showed that many claims were occurring outside the flood plains. “All that concrete has created a new ecosystem, creating flash flood hazards,” said Martin. “The way we’ve built this community is fundamentally non-resilient. More concrete is not the answer. Taking out some of the pavement may be the most productive thing to do.”

Another problem is rampant developing in vulnerable coastal areas. An analysis of 77 counties along the Gulf Coast (not including Florida) showed $2 trillion in asset value. “Even without climate change,” said Martin, “the way we’re building our communities, we’re creating risks where we didn’t have them before.”

People have a lot of ideas of how to prepare for another Katrina-scale hurricane, said Martin. But which options offer the greatest protection for the least cost? Building up beaches offers a high payback, as do building codes mandating construction standards to withstand higher winds. (Sixty percent of Katrina’s damage came from winds, not flooding.) Mandating higher home elevations is on the borderline of being economically justified; other proposals offer a very low return. As long as coastal communities continue to permit development, they need to address these issues.

Bacon’s bottom line. As I’ve made clear repeatedly on this blog, I’m not convinced that human-caused climate change is a cause for alarm, much less an excuse to re-engineer the economy. But you don’t need to be an apocalyptic environmentalist to value resiliency. Disasters happen. They always have, always will. We don’t protect ourselves from disaster by burying our heads in the sand and pretending they can’t possibly happen. We protect ourselves by anticipating possibilities, weighing probabilities and setting priorities. That kind of thinking is making inroads in Virginia, but we have a long way to go. I applaud Resilient Virginia for highlighting the issue. Check out the Resilient Virginia blog here.