What do Miami, New Orleans, New York, Dhaka, Lagos and Ho Chi Minh City all have in common? No, Pitbull hasn’t performed in all them, but each one has sought the expertise of Dutch engineering firms in the past decade to help cope with sea level rise.
The Dutch are making a killing selling their knowledge of living with water. Foreign sales of water-related engineering and consulting accounted for 2 percent of their total exports in 2016, or almost $10 billion. (For scale, Miami-Dade County’s entire budget is about $7 billion.)
Most of The Netherlands sits well below sea level, and its 16 million inhabitants have been perfecting the art of reclaiming land from the sea since the Middle Ages.
The Dutch might just enjoy putting mayonnaise on their french fries (but why?), and they definitely don’t have South Florida’s uniquely porous, sponge-like geology, but when people talk about the economic benefits that Miami could reap should it survive this whole climate change thing, it’s the Dutch model that they hold up.
“Instead of being the next Atlantis or whatever, if Miami gets it right, it can export its model all over Latin America,” notes Nathalie Olijslager, consul general of the Netherlands in Miami.
The county’s three chief resilience officers are in agreement. At a roundtable we hosted in June, Miami Beach CRO Susanne Torriente spoke of a local business community that was waking up to the realities and opportunities of climate change.
“Five or six years ago, you wouldn’t imagine going to a [Greater Miami Chamber of Commerce] meeting to talk about sea level rise. And now the chambers are dying to talk to us, because they see that as [an opportunity] for business development, innovation, jobs and prosperity,” Torriente said.
So which are the businesses that are going to help South Florida adapt – and reap profit while doing so?
We’ve rounded up a few.
The really, really big engineering firms: ARCADIS, CH2M, AECOM
It makes sense that the guys who build bridges and dams and highways and overpasses all over the world are going to be the ones to win the big juicy government infrastructure contracts that will (hopefully) make Miami’s waterlogged future more livable. You’ve probably never heard of them, though.
Take, for example, the South Florida Water Management District’s (SFWMD) partnership with Arcadis.
The district’s job is to keep the lower half of Florida (the one you live in) from returning to its naturally swampy, uninhabitable state. When they went out looking for engineering advice and consulting, they chose Netherlands-based Arcadis, a global design, engineering, and management company that in 2009 won an $8.8 million contract to help the SFWMD with everything from servicing bridges to maintaining canals.
According to Olijslager, another Dutch firm, Deltares, is providing the water management district with computer models that will help it more accurately predict the flow of water from Lake Okeechobee all the way down to the Keys.
Arcadis is a massive company, with almost 30,000 employees worldwide and over $3.9 billion in revenue. It’s seen the revenues from its water business jump by a low-key 42 percent over the past five years.
An even bigger American company, Colorado-based CH2M, got an $8.8 million contract last year to help the Miami-Dade Water and Sewer Department pump wastewater thousands of feet underground, instead of just putting it into the ocean like they do now.
And then there’s AECOM, an engineering behemoth with $17.4 billion in revenue and 87,000 employees that won the $91 million dollar contract to fix Miami-Dade County’s rotting sewage systems. AECOM is also working with the City of Miami Beach on its stormwater drainage projects and has also helped the City of Key Biscayne on its resiliency planning.
As the effects of climate change on South Florida become harder to ignore, look to these companies to raise bridges, roads, and seawalls.
The knowledge brokers: Risk Management Solutions
Okay, so the gigantic engineering firms are going to build. But it’s the financial and risk modeling companies that are going to help lawmakers decide which projects ultimately get built.
Unless you’re in the insurance industry, companies like Lloyds of London and Swiss RE aren’t exactly household names. And if you haven’t heard of those reinsurance giants (whose business model involves insuring insurance companies) then you definitely haven’t heard of Risk Management Solutions.
But how this company prices Miami’s exposure to sea level rise related risk is going to trickle down into your daily life in unexpected ways.
Daniel Stander, global head of California based Risk Management Solutions’s public sector group, explains that their job is to “help governments and businesses understand potential shocks and stresses like hurricanes and sea level rise.”
Fundamentally, RMS uses a really fancy kind of mathematics called stochastic calculus to design working models of the real world. Those models then helps them figure out how much money a city, a school system, or a company stands to lose if, for example, a hurricane or an earthquake strikes.
Those fancy models also help governments and institutions decide which physical adaptations make financial sense. For example, RMS models could help Broward County figure out whether they get a return on investment from building higher seawalls to help stop sunny day flooding. Or they can let the City of Miami Beach more accurately determine if it’s worth raising certain streets.
RMS’s models also happen to be the ones that many insurance and reinsurance companies use to calculate risk.
“Markets move the money, and the markets use our models, so we help move the money as well,” explains Daniel.
Selling models might sound like something that only happens at the hobby shop of your local stripmall, but demand for the kind of information RMS provides seems to be going up along with the rising ocean.
“We’ve been working in this space for 25 years,” says Daniel. “Interest at the local government level and the local business level has only been increasing.”
The plucky local startups: Coastal Risk Consulting
But wait, what about the little guys?
If you’re a homeowner in South Florida wondering whether or not there’s anything you can do to make sure your property retains its value, or even just survives, then Coastal Risk Consulting is who you call.
Founded by former environmental lawyer Albert Slap, Broward based CRC uses state-of-the-art LIDAR mapping and computer modeling to assign property parcels an individual flood score. For $149, CRC’s flood score will give you detailed, easy-to-understand projections of how different sea level rise and hurricane catastrophe scenarios will affect your home. It was named one of the best startups of 2016 at last year’s Annual America Business Awards.
“If you want to go out to 2100 and say South Florida is doomed, that’s fine, but not very relevant,” Slap explains dryly. His company’s product helps homeowners figure out what to do right now. The flood scores help homeowners decide “Am I going to take action to protect my property, or not?”
The reports his company provides are so granular they can help a homeowner figure out if they need to put their air-conditioner on stilts, raise the entrance of their home, do nothing, or sell and run for the hills.
Slap says his company has been commissioned to do everything from storm surge modeling of the Turkey Point Nuclear Power Plant expansion and for Key Biscayne to analysis of Mar-A-Lago for newspapers looking to thumb their nose at President Trump’s climate change denial.
Because it sells easy to understand predictions to individual homeowners, Coastal Resources Consulting could potentially revolutionize how real estate markets price climate data (imagine a Zillow extension integrating their information). But there are certain hurdles keeping CRC flood scores out of everyone’s hands.
“The biggest impediment right now is the ‘don’t ask, don’t tell’ policy of the National Association of Realtors,” explains Slap.
That professional association’s disclosure requirements mean realtors technically don’t have to share anything other than a property’s’ flood zone designation with prospective buyers or clients. “If you didn’t see it (the floodscore), you don’t have to say it,” he says.
So what’s stopping us?
The Union of Concerned Scientists predicts that by 2045, South Florida is going to be dealing with more than 380 tidal flooding incidents a year. Hurricanes will be cataclysmically stronger. Rainy seasons may well be shorter and more intense.
If it is to survive, the region is going to need a way of keeping salty tidal water from ruining cars. It’s going to need a much cheaper method of elevating properties out of the floodplain (It currently costs $100,000 per single family home.) It’s going to need to figure out how to seal concrete effectively so it won’t corrode after contact with sea water. It is also going to need billions of dollars of infrastructure investment.
Miami has built a remarkable tech scene in a short amount of time. Today it has accelerators, startups, and co-working spaces galore.
Could we do the same for resiliency? Miami-Dade County, the City of Miami, and the City of Miami Beach have come together to form Resilient Greater Miami and the Beaches, which was then selected to be part of the Rockefeller Foundation’s 100 Resilient Cities Initiative. That’s a solid start.
But many of the region’s state and national politicians challenge or even deny the reality of climate change and local governments are only beginning to incorporate climate change into strategic planning.
Miami CRO Jane Gilbert thinks focusing on the financial benefits of a focus on resilience might just get everybody on the same page. Speaking at the June roundtable, she said, “If we do this right, we are a major job creator, innovator, economy booster… that’s what our governor, our president wants to talk about. … We know that the more we put resilient infrastructure forward, the more we’re going to boost this economy a long time.”