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Using an economically sensible approach to address climate risks in coastal zones


Energy assets located in coastal zones can be particularly vulnerable to climate risks such has hurricanes and sea level rise. Entergy, an energy company engaged in electric power production and retail distribution operations in U.S. Gulf Coast, is addressing the issue with a consistent framework and fact-based approach to quantify climate risks and develop economically sensible solutions. The expected loss caused by natural hazards over time is calculated in three steps, which considers the extent of the hazard, the value of assets at risk, and the vulnerability of those assets to the hazard. Key uncertainties to address vulnerability to natural hazards include the impact of climate change, the cost, and effectiveness of measures to adapt and the ability to gain alignment and overcome obstacles.

Key take-aways

  • Uncertainties in climate science can be addressed by considering a range of scenarios, informed by the best available science.
  • Some adaptation measures may be taken in account despite a high cost-benefit ratio because of non-negligible co-benefits.
  • Industry can take a leadership role in driving a coordinated response.

Furthe reading

Building a Resilient Energy Gulf Coast: Executive Report

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