Climate Change: Creating an Abundance of Private Sector Opportunities
The effects of climate change present daunting challenges for government at all levels. And, it’s only going to get worse.
According to a July 2016 report from the RAND Corporation, roads, bridges and seawalls will require ongoing attention because of the ravages of weather, population growth and age-related issues. While the issues are increasingly worrisome, the potential for groundbreaking collaboration between public and private sector partners is abundant. Companies able to provide efficient and cost-effective infrastructure solutions will find business opportunities in the near future for projects that represent hundreds of billions of dollars in revenue.
Confronted by extreme weather over the last two decades, public officials now recognize the real-world effects of climate change and they are grappling with solutions. In 2014, for the first time, the National Climate Assessment addressed infrastructure issues related to climate change. The report found that rapidly changing weather poses threats to every kind of infrastructure in the United States. That includes utilities, parks and public facilities, universities, hospitals, prisons, community housing and transit. Severe storms, rising sea levels, damaging water surges, extreme heat and icing events are among the primary effects of climate change.
The climate change problem is particularly urgent in coastal areas, where some of the most densely populated and fastest-growing communities are located. Rising sea levels and violent storm surges in these areas threaten roadways, rail lines, energy infrastructure, airports, port facilities and military bases. Major storms have increased substantially in the United States, most notably in the heavily populated Northeast. This part of the country experienced a 71 percent increase in extreme weather events.
Extreme heat also brings grave risks. Rising temperatures cause spikes in electricity use, often causing major blackouts. Heat also damages transportation infrastructure, softening paved roads and causing buckling of surface rail lines. As average temperatures increase, utility infrastructure must be fortified to handle the increasingly high demands of power required for air conditioners.
The concerns are complicated, and possible solutions will involve many different technologies and various types of expertise. To combat the effects of heat, some roads will require resurfacing with more durable materials. Adapting bridge infrastructure to flooding events could cost $140 billion to $250 billion over the next 50 years. Maritime shipping patterns will change in response to rising sea levels and new storm patterns, so ports will be impacted as well. Inland waterways must accommodate changing water levels caused by droughts and flooding. Coastal roads and railways will require barriers or relocation.
Firms positioned to profit from the multi-billion-dollar bounty of infrastructure opportunities will be expected to bring innovative, cost-efficient solutions to public officials. They should also be prepared to accept and respect the culture and the environment of government executives who will be struggling to develop complicated engagement agreements while also balancing budgets, providing essential services, mitigating weather-related problems and satisfying constituents. None of it is easy, and when everything converges at the same time, it is a bewildering experience for both sectors. However, insightful public officials and wise business leaders have proven for decades the benefits of successful collaborations.
Recent news from Florida illustrates how new collaborations will likely begin to take shape. Miami Beach officials began negotiations in July to develop a public-private partnership for a light-rail streetcar line along the famous South Beach district. An increasingly popular tourist destination, Miami Beach, is plagued with frequent flooding that threatens to restrict future growth. Conversations are occurring now with potential private-sector partners who have solutions for consideration. In an ever-changing world, scenarios just like this will be played out hundreds of times in the near future.