As climate change garners increased attention in the news, much focus has been on the costs associated with transitioning from a fossil fuel-based global economy to one reliant on renewables. However, a recent study utilizing data from the National Center for Environmental Information highlights a different aspect: large-scale climate disasters in the U.S. have incurred a staggering burden of over $2 trillion in recovery costs over the past 40 years, coinciding with a significant rise in such events.
This realization is causing operators of critical infrastructure, including power utilities, railway operators, and national defense entities, to quietly acknowledge that the costs of inaction are beginning to outweigh the cost of action.
One challenge for such companies as they consider to which projects they should devote scarce corporate resources, or try to put a case for climate change-related activities to sometimes skeptical shareholders is that the costs of disasters are often seen in aggregate: at a global, or at best national level. But this, too, is beginning to change as understanding of how climate change affects all societies and communities improves among insurers, consumers, taxpayers, policy makers and others.
For example, in August last year, a historic drought led to exceptionally low water levels in the Panama Canal, obliging ships to carry less cargo or use lengthy alternative routes. As delivery times spiraled, carriers paid as much as $4 million each at auction to skip the line to use the canal: 23 times the average cost in the previous year.
In September, heavy rain caused considerable flooding in New York City disrupting the New York City subway system, commuter rail, and bus services, costing hundreds of millions of dollars in property damage and insurance costs and additional costs to the city for accelerated public safety and emergency response.
While the cost of climate change is becoming clearer at the level of individual corporations, there is also an increasing realization that adaptation is as necessary as prevention. After all, as commentators including the World Economic Forum have pointed out, while mitigation of the climate crisis is essential, the negative effects of climate change are already being seen and will continue for at least the medium term. Here, too, costs are becoming easier to quantify at the level of individual organizations. For example, in an analysis of climate change and the power utility industry, the costs of modernizing the grid for improved resilience were estimated at $700 million to $1 billion per utility, far lower than the costs incurred from estimated climate-change-fueled storms at $1.7bn per utility over 20 years. And that is just the cost to the company. The benefits of modernization offset the costs further with improved efficiency and productivity gains from enhanced automation and predictive maintenance capabilities, and much more.
By their nature, organizations responsible for critical infrastructure cannot effect change overnight. The systems that provide the backbone of our communities must be protected and secured during any modernization effort. Nevertheless, the climate crisis should be a spur to move as quickly as possible, consistent with the prioritization of reliability, continuity, and security. And, clearly, there is room for some acceleration. Indeed, in a 2022 press release, the US Department of Energy explained that 70% of the U.S. power grid infrastructure is more than a quarter of a century old, with some current utility assets dating back to the 1940s.
Accepting that there is a case for modernization, therefore, what would this look like and what would be the benefits – not only in slowing the effects of climate change or helping an individual organization respond quickly and effectively to a natural disaster but also in helping critical infrastructure operators improve current business performance? The following short use cases demonstrate some of the innovative and targeted ways in which organizations, cities, and even countries are harnessing critical infrastructure digitalization to deliver far-reaching benefits.
Ruinous forest fires in recent years have demonstrated that power line breaks not only have a severe impact on the customers they serve but can become a danger in their own right. A large utility in the United States, is installing a new grid control system that detects line breaks instantly and automatically cuts power to the affected infrastructure before the line hits the ground, thereby reducing the risk of fire, injury and property damage.
The devastating earthquake in Japan on New Year’s Day was a sobering reminder that the forces of nature can sometimes pose serious dangers to human society and life, quite apart from disasters linked to climate change. The city of Sendai in Japan is taking steps – using drones and resilient “everywhere” communications network capabilities – to help alert communities in advance and assess affected areas before humans are put into harm’s way, detecting hazards and locating citizens who need help, so assistance gets there sooner with less risk to emergency personnel. A similar approach is being taken on an ambitious nationwide scale by the government of Belgium.
Innovations in remote environmental monitoring and undersea sensing provide a host of benefits helping critical infrastructure operators and public safety agencies more easily manage assets and resources in unmanned, hard-to-reach areas. They can sense and detect early signs of wildfires, water, and air quality issues, illegal activity like logging, tampering or poaching, chemical leaks, and even tsunami threats in the oceans so action can be taken swiftly for better results.
- Digital twins and industrial metaverse applications allow for the creation of digital, virtual reality, or augmented reality simulations of live operations, including mimicking real-life storm conditions to improve training and emergency preparedness ahead of and during disaster response. These new tools enable critical industries and government agencies to prepare safely for large-scale natural disasters using scenarios that would be near impossible — or too dangerous — to simulate in the real world.
- New enterprise cloud innovations enable the automation of key functions in the data center, helping operations to better access and deliver volumes of information in real time so it can be analyzed, understood, and quickly acted upon.
- Modernized high-performance, high-capacity communication networks ensure the seamless flow of terabytes of information throughout an operation, connecting people, things, and systems, which is essential to making the intelligent decisions needed and acting with impact and scale. These networks are being utilized at scale by Research and Education Networks throughout the globe not only to study climate change impacts but also to provide the essential data fuel to innovate solutions.
- Looking to the near future, emerging technologies like quantum computing will take digitalization to the next level and will offer the computational capabilities needed for far-reaching advancements and innovations – like better, greener battery technology and sustainability-optimized operational practices – to help us address climate change. Quantum computing of course points to a different kind of threat scenario, because it brings an entirely new set of security concerns. Nokia is at the forefront of developing quantum-safe networking solutions that will help our customers harness the benefits of quantum computing while protecting themselves from security threats.
