The Top 5 Reasons Real Estate Investors Should Consider Climate Risk 

Sarah Peterson, Director, Sustainable Investing

Physical climate risk refers to the potential damage to properties caused by natural disasters such as flooding, wildfires, hurricanes, and extreme temperatures, all of which are becoming more frequent and severe due to climate change. 

In today’s challenging market, leveraging data to gain a deeper understanding of climate risk and resilience may be the difference between an accretive or non-accretive investment. 

1. Direct Damage from Extreme Weather

Each year extreme weather causes billions of dollars of damage to the real estate industry. In 2021 the world’s largest reinsurer, Munich Re, incurred $120 billion of insurable losses, representing the second most costly year on record. However, insurable losses represent only a small portion of total losses, estimated to be $280 billion, with real estate owners and investors coming out of pocket for the remainder. 

Acute weather not only results in costly property repairs but also disrupts the property’s business operations that support rental revenue. A study performed by First Street and Arup estimates that flood damage to commercial buildings in 2022 resulted in 3.1 million days of lost business operations, which will increase to 4 million days by 2051. 

For real estate investors, extreme weather represents one of the largest threats to profitability, with the potential to wreak havoc on both top and bottom-line revenue. 

2. Rising Insurance Costs & Reduced Coverage 

Although insurance rates are rising nationwide, the increase is most significant for property owners in climate vulnerable states like Florida and Texas. For example, insurance companies hiked premiums for commercial properties in Florida by 15%-30% in 2022, with additional hike rates upwards of 50% expected in 2023. Given that premiums are adjusted on a yearly basis, the compounded cost of rate hikes can put substantial pressure on net operating income, a key valuation metric for real estate investors. 

Moreover, insurance companies have already begun to limit coverage or decline to renew policies in high-risk areas. This will drive not only how people live, but where they live. For example, after the California wildfires in 2018 and 2019, insurers dropped coverage for many homeowner policies. Since the amount of insurance available for a property can change on an annual basis, real estate investors run the risk of uninsured climate risk exposure over long hold periods. 

Real estate is no longer guaranteed to go up and to the right. Climate change combined with other macro drivers such as interest rates and disruptions like demographic shifts and remote work heighten the need for deep, data-driven research and robust scenario planning to pick the winning locations of the future. 

Parag Khanna, CEO of Climate Alpha

3. Coastal Market Devaluation 

There is growing evidence that climate risk in coastal markets, which are susceptible to storm surges and flooding, has already affected residential real estate prices. More specifically, a 2018 study performed by Pennsylvania State University and the University of Colorado indicated an average 7% “sea-level-rise discount” for non-owner occupied coastal residential properties. Similarly, First Street Foundation released data showing that eight states lost a combined total of $14.1 billion in coastal home value since 2005 due to sea-level-rise flooding. 

4. Climate-Related Risk Regulation 

Globally, an increasing number of jurisdictions are introducing rules and taxonomies governing climate risk disclosures. In the United States, the Task Force on Climate-related Financial Disclosures (TCFD) and the Task Force on Nature-related Financial Disclosures (TFND) are two frameworks that provide guidance to real estate investors on how to disclose climate-related risks and opportunities.  

The TCFD was created in 2015 to help companies disclose climate-related risks in their financial filings, whereas the TFND was launched in 2021 to help companies disclose impacts on a much broader basis, including biodiversity and other key aspects of nature, covering land, ocean, freshwater, and atmosphere. As of now, TCFD and TFND are not required by law, but are increasingly adopted by investors as best practice. Moreover, some large institutional investors are beginning to require these disclosures from the companies they invest in.  

5. The Rise of ESG Motivated Capital 

ESG investing has gained significant traction and is on its way to becoming a mainstream investment. According to the Global Sustainable Investment Association, ESG assets surpassed $35 trillion in 2020, up from $30.6 trillion in 2018, representing one-third of global assets under management. At this pace, ESG assets could exceed $50 trillion by 2025. Data from Morningstar also shows that global sustainable fund flows hit a record high in 2020, with net inflows of $152.3 billion, underscoring high demand for sustainable investing. 

As an ESG alternative, climate resiliency is more quantifiable than most ESG strategies, and therefore less susceptible to greenwashing. As such, investing in climate resiliency represents a unique opportunity for real estate investors to take advantage of capital flows while  boosting returns through enhanced portfolio risk management.  

Overall, considering climate risk is important for real estate investors who want to protect the long-term income and value appreciation while staying ahead of regulatory requirements. For more information on how Climate Alpha can help you get ahead of the impacts from climate volatility book a consultation with our team.


After Ian, Where Should Fort Myers Grow?

Even as insurers continue tallying their losses from September’s Hurricane Ian — Swiss Re’s latest estimate is $50-$65 billion, second only to 2005’s Hurricane Katrina as the most destructive storm of all-time — residents and elected officials in southwest Florida have already begun debating how best to build back better. But they haven’t addressed the question of where to rebuild.

To answer that, we harnessed Climate Alpha’s Resilience Index™ to calculate a risk, vulnerability, and readiness score for every county in south Florida, then used our patent-pending Scenario Forecaster to project both the baseline and climate-adjusted Climate Price™ down to the zip code level. The results underscore how unevenly the effects of climate change are likely to be felt. Even in a state as vulnerable as Florida, some places are more vulnerable than others.

Image generated by Climate Alpha Resilience Index™

For example, Lee County — home to Fort Myers and Cape Coral, which lay directly in Ian’s path — is among the climate-riskiest in the state, second only to Miami-Dade. The three counties least at risk, owing in part to their higher elevation and being inland, are the less built-out Hardee, DeSoto, and Glades — implying the state still has plenty of room for safe(r) development.

The picture changes somewhat when the metric in question is vulnerability, which takes socio-economic and political factors into account alongside climate models. Lee County — along with Sarasota and Hillsborough (home to Tampa) — remain among the lowest scorers, but less so compared to south Florida’s Atlantic coast. DeSoto and Glade counties remain among the highest scorers, but are joined this time by Okeechobee, which lies on its namesake lake’s northern shore.

Image generated by Climate Alpha Resilience Index™

A more radical shift occurs when we start to calculate readiness — the ability to mitigate and adapt to climate disasters — rather than risk or vulnerability. Although no south Florida county scores highly in the scheme of things, Sarasota and Charlotte County (north of Fort Myers) leap to the top alongside Hardee, underscoring local resources and preparations to address their inherent vulnerability.  

Image generated by Climate Alpha Climate Price™

Taken together, what does this mean? From a real estate appreciation perspective, the prognosis for greater Fort Myers in a south Florida context is… not great. The safest zip codes from a depreciation standpoint lie immediately to the north, in Sarasota and Bradenton, underscoring the financial resources and political will available to invest in future adaptation efforts and disaster recovery. If this seems obvious, perhaps it should be — both path dependency and inequality will play roles in deciding which places are protected.

Image generated by Climate Alpha Scenario Forecaster™

Zooming into the Fort Myers area, our Climate Price™ analysis platform first highlights zip codes projected to appreciate faster under a current “business-as-usual” scenario out to 2030. Darker shades indicate faster growth, in which case 33917 and 33905 — encompassing North Fort Myers and Buckingham — are projected to gain and retain value more than low-lying coastal areas such as Cape Coral.

Image generated by Climate Alpha Climate Price™

This dichotomy is shown in even starker relief when our Scenario Forecaster swaps business-as-usual for one with more severe climate impacts. Once again, 33917 and 33905 are projected to out-perform formerly desirable coastline locations, now joined by 33913, containing Southwest Florida International Airport and mostly undeveloped land.

The takeaway is this: If southwest Floridians want to build back better following the most destructive hurricane ever to hit the state, they (and investors) would be smarter to rebuild ever-so-slightly inland to mitigate the worst effects of storm surge and sea-level rise while retaining access to their coastal lifestyle. That’s where the smart money is headed, anyway. 

To learn more about Climate Alpha, check out


Internet Outages Could Spread as Temperatures Rise. Here’s What Big Tech Is Doing

The Metaverse will offer no respite from climate change — not when soaring temperatures are causing Google and Oracle data centers to crash in the UK and Twitter briefly shut down its servers in the American West this summer for similar reasons. Climate is already forcing technology giants to rethink the geography of computing, CNET’s David Lumb reports:

“When selecting a site for their data centers, companies like Microsoft and Amazon prioritize access to low-cost energy, which they’ve historically found in places like Silicon Valley, northern Virginia and Dallas/Fort Worth, though Atlanta and Phoenix have been growing. They also look for internet infrastructure from telecoms AT&T, Verizon and CenturyLink, along with fiber providers like Charter and Comcast, to keep data flowing. They assess the risk of floods, hurricanes, earthquakes and other natural disasters, too.”

Drought has become another major factor, given the need for large quantities of local water for cooling. “One-fifth of the data centers in the country get their water from moderately to highly stressed regions supplying water in the dry western US, per an April report from Virginia Tech,” Lumb writes. “US cities are already getting nervous.”

As climate change becomes an increasingly important driver in the site selection process — even for the infrastructure powering the Metaverse — Climate Alpha offers tools for locating new geographies that balance resilience with proximity to customers. (Because every microsecond of latency counts.) Visit to learn more about our Resilience Scores, risk-adjusted real estate valuations, and scenario forecasters and how they can help build the Internet of tomorrow.

#extremeheat #heatwaves #climateadaptation #megadrought #climaterisks


Retirees Are Moving to more Climate Resilient Regions

More Americans are taking climate change into account when choosing their retirement destinations, Susan B. Garland reports in The New York Times. “Armed with climate studies, many retirees are looking for communities that are less likely to experience extreme weather events, such as wildfires, drought and flooding.”

Armed with free data sources such as, ClimateCheck, and Risk Factor, they are calculating risks, budgeting for personal resilience, and paying close attention to local adaptation efforts (such as Asheville, North Carolina’s efforts to reduce wildfire risks). “Do you really want to rebuild at 80?” one person asks?

But there are limits to what one person or family can do. With more than 60 million seniors by 2030, America faces a pressing need for new retirement communities and housing. Given this clear signal, property developers need a head start on building tomorrow’s resilient destinations.

Climate Alpha’s analytics suite — including proprietary resilience scores for every county in the country as measured by risk, vulnerability, and readiness — offers developers and investors industrial-strength tools for getting a jump on savvy seniors (and the competition). Visit to learn about using our AlphaFinder™ to spot high-opportunity locations, and much more.

#boomers #silvertsunami #retirement #boomtowns


Here today. Gone tomorrow. Back someday because of climate change.

“As the Sun Belt suffers from increasing vulnerability, the question is can New England benefit from that?” asks Climate Alpha’s Greg Lindsay in The Boston Globe, framing a story exploring whether the region’s climate resilience might spark a reversal of the region’s migration patterns.

Not so fast, say the other experts quoted. A much bigger factor than climate is the region’s dramatic shortfall of affordable housing — a problem made worse by the NIMBYism of local residents. What good does it do New England to be a climate haven if no one can move there? But that’s all the reason to start planning — and building — for tomorrow’s arrivals now, says Climate Alpha founder Dr. Parag Khanna.

“You don’t want this kind of reckless climate gentrification overrunning places where you get crowding out and pricing ordinary people out of the market,” Khanna said. “If you just think with a rigorous scientific lens, you should be thinking about the places that would be more resilient [and] pre-designing in the sense of sustainable technology and enlarging the capacity of those geographies to absorb greater populations.”

At Climate Alpha, we build tools for planners, developers, and investors to start preparing for the future now. Whether its our Resilience Scores for 40,000 ZIP codes, our risk-adjusted valuations for real estate every year through 2040, or our patent-pending scenario forecaster, we offer our customers the scientific lens they need to separate hype from opportunities. Visit to learn more.


Farmland Values Hit Record Highs, Pricing Out Farmers

The price of U.S. farmland has soared 12.4% over the last two years, thanks to a perfect storm — a derecho in this case — of inflation in both commodity crops and housing, coupled with generous government subsidies propping up farm activities. The result has been a windfall for investors (who own 40% of U.S. farmland) and a squeeze on small farmers unable to acquire land — or do so only at the steep price of debt.

The New York Times’ Linda Qiu notes that farmland has became a highly desirable hedge against volatility for pension funds, private equity, and even Bill Gates — now the largest private owner of farmland in the country.

But as climate change alters both weather and demographic patterns across the United States, the value of that land is certain to change due to crop yields, housing starts, water availability, and much more.

Climate Alpha’s Climate Price™analytics suite offers risk-adjusted valuations for every year out to 2040, along with our patent-pending scenario forecaster for evaluating valuations under multiple climate conditions.

Visit to learn how our tools can help you unearth new opportunities in a rapidly changing world.

#realestate #farmland #cropland #pastureland #billgates


Adam Tooze & the Global Housing Downturn

Formerly white-hot American housing markets such as Austin, Seattle, and Cape Floral, Florida are now facing the steepest declines — bad situations made worse by recent climate disasters, including wildfire smoke and Hurricane Ian. But the real crisis is unfolding overseas, where property markets in China, Sweden, Canada, and others are grinding to a halt. Tooze spells it out:

“In the global economy there are three really large asset classes: the equities issued by corporations ($109 trillion); the debt securities issued by corporations and governments ($123 trillion); and real estate, which is dominated by residential real estate, valued worldwide at $258 trillion. Commercial real estate ($32.6 trillion) and agricultural land add another $68 trillion. If economic news were reported more sensibly, indices of global real estate would figure every day alongside the S&P500 and the Nasdaq. The surge in global house prices in 2019-2021 added tens of trillions to measured global wealth. If that unwinds it will deliver a huge recessionary shock.”

This is the moment Climate Alpha was made for. As the polycrisis scrambles once-reliable economic formulas and triggers a worldwide flight to quality in the world’s overwhelmingly largest asset class, our tools literally tell investors where to go as opposed to when to sell. 

Our Climate Price™ analysis suite generates risk-adjusted valuations of real estate portfolios out to 2040 under multiple scenarios, including the effects of rapid interest rate hikes and faster-than-expected climate change impacts.

Visit to learn more about how we can help you start preparing for what comes after the crash — or if there isn’t one.

#realestate #housing #climaterisks #creditrisks #housingbubble


New report paints dire picture of America’s future as climate crisis accelerates

A draft of the next National Climate Assessment was published last week in anticipation of President Biden’s appearance at #COP27. Although the final report won’t be published until late next year, the 1,695 draft released for public comment notes “the things Americans value most are at risk” — starting with their homes. Summarizing the draft’s key takeaways, CNN contributor John D. Sutter paints a dire picture in a recent article of what’s to come, including:

• The U.S. is warming faster than the global average. Underscoring the need to invest in climate adaptation now rather than cling to dreams of total mitigation.

• Climate disasters are getting worse. “In the 1980s, the country experienced on average one (inflation-adjusted) billion-dollar [extreme weather] event every four months,” the draft report states. “Now, there is one every three weeks, on average.”

• It hits the most vulnerable the hardest, as frontline communities face the brunt of climate disasters due to decades of discrimination and displacement. They urgently deserve investment in adaptation.

• It’s playing a role in migration and economic woes. “Millions of people,” the report states, will be displaced by floods, fires, and rising seas. Those are numbers not seen in the United State since the Dust Bowl.

Taken together, these and other factors point to the clear and present need to invest in climate adaptation — and migration — using both public funds and private capital. At Climate Alpha, we’re building the tools investors, planners, and strategists need to identify and build the resilient communities of tomorrow.

Visit to learn more about how our Climate Price™ analysis suite can help.

#climateadaptation #climatemigration #realestate #climaterisks 


Borders are holding the world’s eight billion people back

Climate Alpha’s founder and CEO Dr. Parag Khanna offers a scorching take in this weekend’s Financial Times: Climate change demands nothing less than the end of #sovereignty; the enshrinement of #mobility as “the cardinal human right of the 21st century;” and the rebalancing of human civilization amongst an “archipelgo” of habitable regions.

The alternative is far worse, he writes: “A neo-medieval world of warring fortresses, fending off at the gates those who both need and could offer help. Whether the human population peaks at 10 billion or collapses suddenly to only 5 billion or 6 billion may well depend on the path we choose now. Either way, for the inhabitants of the future, mobility will be destiny.”

At Climate Alpha, we’re building the tools necessary to galvanize public officials, mobilize private capital, and inspire individuals to build the world we need. Starting with the United States and #Canada, we’ve created a Resilience Index™ evaluating local strengths and weaknesses, an Alpha Finder™ for identifying geographies of opportunity, and our patent-pending climate scenario forecaster able to stress-test regions against the accelerating effects of climate change.

Visit to learn more about how we can help you, your organization, and your society thrive in a future with more than a billion people on the move.

#immigration #climatemigration #climateresilience


Why Florida keeps rebuilding after storms

Evidence suggests they will quickly forget the catastrophic damages of Ian in favor of focusing on the costs imposed by stronger building codes.

The Miami Herald’s Alex Morris captures this dilemma by exploring the aftermath of 2018’s #HurricaneMichael, which destroyed 93% of Mexico Beach, Florida. 

“Watching a community that learned the hard way and made the right decisions, and then watching them backpedal because their memory became so short, it was just really hard to watch,” floodplain management consultant Del Schwalls told Morris.

“There’s a lot of decisions we made 20 years ago, on Fort Myers Beach that resulted in somebody dying in Ian, that resulted in somebody losing everything in Ian,” he added. “What are the decisions we make today that will save someone’s life 20 years from now?”

At Climate Alpha, our goal is to provide our customers — whether public- or private sector — with the tools necessary to make those life-or-death decisions.

By combining our Resilience Index™ scores for every county in American with our patent-pending scenario forecaster, clients are empowered to explore how and where to best spend their adaptation resources. 

As COP 27 and the elections remind us, the choices we make today will shape the world for decades. Visit to learn more about how we can help.


Finding safe haven in the climate change future: The Southeast

Yahoo News’ David Knowles explores the best and worst places to live in the American Southeast — “one of the most-threatened regions of the country” due to climate change. Drawing on data provided by the Rhodium Group, the site unsurprisingly ranks Louisiana coastal counties among the most vulnerable, and the mountainous southwest corner of Virginia as the most resilient.

The fact a mainstream news organization is framing the issue this way is to testament to how quickly the once-verboten conversation around climate migration is changing. “With Hurricane Ian, I think we’ve seen a conversation at a much more acute pitch and much more rapidly moving in the direction of ‘Do not rebuild here. Do not come back here. We should not be putting taxpayer money into this.’ And those families should not be putting their entire net worth into that place again,” Climate Alpha’s CEO Parag Khanna told Knowles. “The accelerating frequency of these disasters is contributing to that change in mood which is reinforcing what policymakers know they must do.”

At Climate Alpha, we’re building tools to identify climate risks and opportunities that go far beyond top ten lists. Our Resilience Index™ calculates comprehensive risk scores for every county in the country, while our Alpha Finder™ scours 40,000 ZIP codes for the highest-performing communities and properties. Visit to learn more about how our tools can help you identify where the world is heading — and get there first.

#climaterisks #climateadaptation #climatemigration #realestate #flooding



Climate Alpha’s founder and CEO Dr. Parag Khanna Khanna recently joined The Weather Channel

Climate Alpha’s founder and CEO Dr. Parag Khanna Khanna recently joined The Weather Channel to discuss #climatechange, #adaptation, and #migration. Where will Americans want to live in 2030 and beyond? How should regions prepare in the coming decades? And which places will successfully adapt to the next normal, and which will be left behind?

“A climate model alone might say, “We can’t live there anymore, but the truth is that we are very adaptable,” Parag said. “We have the technology and the resources to make these places livable. But people are generally going to move to more stable areas.”

Click through to watch the entire clip. (Just don’t ask him to name his top three places in live in the future. It’s complicated.)

#realestate #housing #climaterisks #resilience #zoomtowns


Climate Pledges Are Falling Short, and a Chaotic Future Looks More Like Reality

As world leaders finalize plans for November’s #COP27  climate conference in Egypt, a new United Nations report underscores the necessity of #adaptation as well as #mitigation. Without immediate (and unlikely) drastic action, global temperatures are expected to rise between 2.1 and 2.9 degrees Celsius by 2100, well above the 1.5 C target of the #ParisAgreement. Each fraction of a degree means tens of millions more people will be exposed to climate disasters, and tens of billions of dollars will be needed to protect them.

But United Nations Secretary General António Guterres and his deputies have already warned of COP 27 being another missed opportunity to develop concrete plans for adaptation.

Developed countries have yet to offer details on their pledge to provide $100 billion for climate action in the Global South. Guterres told reporters earlier this month that adaptation and resilience must represent half of all climate finance, while Deputy Secretary-General Amina Mohammed warned environment ministers this figure is “only a fraction of the $300 billion that will be needed annually by developing countries for adaptation by 2030.”

To read more on the topic, check out the original article from The New York Times.

At Climate Alpha, we’re building tools to help steer adaptation efforts to regions with the highest ROI. Visit to learn more about how we can help with site selection decisions for future homes, farmland, and renewable energy production. The best time to start the climate adaptation conversation was 30 years ago in Kyoto. The next best time is now.

#cop27 #parisagreement #climateadaptation #climatemigration #unitednations


With Colorado “getting strange,” Michigan may be the place to be as climate changes

Southeast and West are at higher risk of disruptions due to changing weather patterns, futurist says

People who relocated during the pandemic favored areas at higher risk of disruption due to climate change, but they may come to regret those moves over the long term, futurist Greg Lindsay told a gathering of the Denver Metro Commercial Association of Realtors on Thursday morning.

“Americans are moving in the wrong direction,” Lindsay said of migration patterns during the pandemic, and even before. “Markets are underpricing climate risk.”

Wrong as in moving from cooler northern coastal areas and the upper Midwest to the Sunbelt. Wrong as in moving to Arizona and Nevada, popular states that suffer from ever-increasing temperatures and worsening drought. Wrong as in flocking in large numbers to coastal Florida and Miami, where rising water levels could submerge vast swaths of land in coming decades if powerful hurricanes don’t scrape them first.

Texas and Florida were the top inbound states for those relocating during the pandemic, according to the Federal Reserve Bank of Chicago. Speaking generally, the southeast and the western U.S., including Colorado, are much more vulnerable to the impacts of climate change than other parts of the country, according to Climate Alpha, a startup where Lindsay is chief communications officer.

But climate impacts can be very specific. Climate Alpha uses artificial intelligence to determine a “climate resilience” score for more than 40,000 ZIP codes. It then applies those risk scores to determine future real estate values under different scenarios.

Custer County, for example, was a popular landing spot during the pandemic in Colorado. But it also has one of the highest drought risk scores in the country, Lindsay said.

A higher altitude shields Colorado from the extreme temperatures seen in states further south, but not from drought. The northern Front Range will likely struggle with water shortages that limit future growth as the region dries out, he said.

“Even in Colorado, things are getting strange,” Lindsay said. Strange as in the Marshall fire, where 100-mph-plus winds fanned flames in late December that quickly destroyed more than 1,000 homes deep in the populated suburbs of Boulder County, including homes of climate scientists working at the National Oceanic and Atmospheric Administration.

Where should people who want to provide their children and grandchildren with a more secure future look to move?

Lindsay suggests that the great migration to the Sunbelt may reverse, replaced by a migration to the Great Lakes region. Buffalo, New York, could become the new “cool” place. Some investors are buying up land in Ohio and others are targeting purchases in Canada. Lindsay told the audience he relocated to Montreal.

The Great Lakes region has developed infrastructure, lower real estate prices and the potential to provide a strong return for those who get in early, he said. Bonus points if more manufacturing comes back to U.S. shores.

But there are a lot of other factors that go into the decision to move, such as quality of life and connectivity, or the ability to travel to other areas. Part of the problem is that people relocating often don’t have a good grasp of the climate risks involved in a new place. Redfin, the real estate brokerage, found that when people are provided with flood risk scores, they were much more likely to choose safer areas.

“We now have definitive evidence that the risks posed by climate change are affecting where Americans choose to live. Before Redfin’s experiment, that was just a hypothesis,” said Redfin chief economist Daryl Fairweather in a news release earlier this month. “Equipping people with flood-risk information helps them make more informed decisions. Some will opt to move out of risky areas altogether, while others will stay put but invest in making their homes more resilient to disaster.”


It’s Time to Invest in Climate Adaptation

Companies around the world are increasingly committing to climate change mitigation, pledging to reduce carbon emissions and water consumption across their operations and supply chains in an effort to slow the pace of global warming and better protect environmental ecosystems. However, while essential, these efforts merely prevent a worse future rather than addressing the inevitable consequences of the damage already baked in. Carbon offsets, for example, have yet to demonstrate meaningful impact on the atmosphere, and, at present, worldwide carbon sequestration efforts reportedly only remove 1% of annual global emissions.

We therefore believe that climate adaptation — helping people, animals, and plants to survive despite rising climate volatility — should be an equally urgent priority. According to a 2021 report from the Climate Policy Initiative, these types of initiatives receive only 7% of climate-related investment, allocated across a vast spectrum of needs such as flood and wildfire prevention, resilient agriculture, clean water supply, infrastructure modification, and population resettlement. They deserve far greater business investment, especially because they represent near-term opportunities at lower capital expenditures that offer faster paybacks. Indeed, according to this Bloomberg report, Bank of America analysts estimate that the climate adaptation market could be worth $2 trillion a year within the next five years.

Fundamentally, climate adaptation is about evolving organizational and institutional practices and infrastructures and technologies in places that most need them — which is everywhere that faces risks such as floods and rising sea levels, droughts, and heat waves. We advocate for solutions that are low cost, proven to be effective, and have immediate impact, such as early warning systems for extreme weather events, coastal barriers, water desalination and wastewater treatment, vertical farming and hydroponic agriculture, improved cooling and insulation systems, 3D printed and modular housing, and many other measures.

The insurance conglomerate SwissRe warns that a global temperature rise of 3.2°C by 2050 would wipe 18% from global GDP. But, as a pair of OECD studies point out, widespread climate adaptation measures can have a positive impact on growth, especially in G-20 economies.

When governments, capital market investors, commercial lenders, and businesses from multinational corporations to small enterprises work together toward climate resilience, as well as mitigation, the result will be a stronger world economy. Some are already stepping up to do so. For example, the Coalition for Climate Resilient Investment (CCRI), an umbrella organization of more than 120 companies and other stakeholders representing more than $20 trillion in assets, have launched pilot projects focused on reinforcing infrastructure to withstand anticipated climate effects. We see notable positive developments in other areas as well. Here, we’ll explore projects in water and agriculture and in construction and real estate.

Water and Agriculture

Water scarcity is already a short-term crisis and an even greater long-term challenge that even the most robust mitigation initiatives cannot immediately address. Water is the biggest and most important input for human life and global agriculture and is thus essential for our health, sustenance, and productivity, and yet many heavily populated geographies are already stricken by shortages.

Some of the most affordable water-related adaptation interventions involve rainwater harvesting and more efficient irrigation techniques. As countries invest in cloud seeding to spur rainfall, plant drought-resistant seeds, and deploy atmospheric water capture systems, conserving water for agriculture is an obvious complementary effort. London-based engineering consultancy Arup (which reports nearly $2 billion in annual revenue) has been ahead of the curve in carrying out flood control projects that increase natural water retention in Poland and flood alleviation schemes in England. Rainwater harvesting projects now represent a 5% and growing share of the portfolio of Kingspan, a leading Irish construction company whose low-energy insulation systems are featured in Bloomberg’s London headquarters and Singapore’s Changi airport. The city of Sydney, which has suffered consistent droughts with dams falling to record low capacity, has commissioned Kingspan to audit all 48 of the city’s rainwater management systems.

There are also signs of progress in developing countries. Israeli firm Netafim (a $1 billion revenue company) has installed irrigation systems across more than 100 villages in India, using soil and plant data to direct measured doses of water to optimize yield while bringing down water consumption and fertilizer usage by 40%. Olam, one of the world’s largest agri-business producers of rice, cotton, cocoa beans, and coffee that operates in 60 countries, is committing to reduce wastewater in the 30% of its upstream farms and plantations that are in water-stressed regions.

The economic benefits of water conservation include saving money on water purchases, storage, and maintenance, all of which accrue to corporations and villagers alike. Particularly in regions such as India, where only 10% of potential water-saving measures have been implemented, these kind of adaptation efforts deserve significantly greater investment and scaling.

Clean water generation is another essential and growing business opportunity. Existing desalination systems are often oil- or gas-powered and use a lot of energy. By contrast, Elemental Watermakers’ solar-powered reverse osmosis system uses the natural force of gravity to receive and clean pressurized seawater and is compact and mobile enough to be deployed in industrial sites and residential communities. One of its customers in Aruba has reduced water costs by 67% and carbon emissions by 180 tons per year. Another company, Terraformation, meanwhile operates what might be the largest full-scale, purely solar-powered water desalination plant on a 45-acre reforestation project site in Hawaii. However, similar ventures remain woefully underfunded despite their regenerative potential for ecosystems and local economies. Perhaps the most high-potential innovation would be nuclear-powered desalination, which would have enormous applications worldwide.

A steady and efficiently managed water supply would also support more environmentally friendly agriculture such as hydro- and aquaponic food production. China’s Sananbio, for example, operates large indoor farms in Beijing that can produce about six tons of leafy greens daily using only 5,000 square meters of space. Its plants absorb 60% of the water used, while the remaining 40% is recycled. Small and strategically vulnerable countries such as Israel, the United Arab Emirates, and Singapore have become leaders in this kind of food production, and it could greatly benefit many other water-stressed geographies.

Construction and Real Estate

Our built environment is a major driver of climate change and must also be a key front in adaptation. Because of their fixed location, real estate assets — valued at $200 trillion worldwide — are uniquely vulnerable to natural disasters and resource shortages. And many opportunities lie at the intersection of geography and technology. For example, from the Netherlands to Denmark and the Maldives to Singapore, developers and localities are planning or building floating cities that can rise with the tides and desalinate and recycle water for hydroponic agriculture.

Astro Teller, director of the Google X Lab, suggests that we might also one day need “movable cities” to cope with climate effects. As a first step, companies like ICON are creating 3D-printed houses. Its Vulcan construction system can deliver homes and structures up to 3,000 square ft that meet the requirements of the International Building Code (IBC) and are expected to last as long or longer than standard Concrete Masonry Unit (CMU), making them more resilient to extreme weather. They’re the first of their kind to be sold in the United States and the firm, currently valued at around $2 billion, is working with leading U.S. home-builder Lennar to construct a community of entirely 3D-printed homes in Austin. In both Mexico and the United States, ICON is also building entire communities of 3D-printed homes, barracks for those who serve, and a simulated Martian habitat for NASA.

Similarly, Boklok produces flat-pack homes designed and built by Skanska and sold at Ikea. The houses are primarily made of wood sustainably sourced from Scandinavia because of its relatively lower climate impact, and about 14,000 of them have been erected across Sweden, Finland, Norway, and the United Kingdom, generating $250 million in revenue for the adaptation-focused manufacturer.

According to UN Habitat, at least three billion people will require better housing by the end of this decade, which means that 96,000 new homes need to be built each day between now and then. Eventually, rather than building these habitats where people are, we will need to start moving certain populations to geographies less damaged by climate change, at lower risk of future effects, and with better resources and technology. Rising fire and flood insurance premiums, as well as chronic droughts and heatwaves, make this all but inevitable.

Our own Climate Alpha research suggests that investing early in climate-resilient geographies will generate more than 70% higher returns on real estate portfolios by 2030 alone. Property developers, asset managers, and insurers should take heed, accelerating the acquisition of land, construction of affordable housing, and adjustment of premiums to anticipate, encourage, and profit from climate-induced migrations. New technologies should help us to do this with speed. Consider the U.S.-based company Alquist, which can now print a three-bedroom home in just over 24 hours versus the typical four weeks that the volunteer-powered nonprofit Habitat for Humanity takes to construct one.

Addressing climate change requires both mitigation and adaptation, and we believe the latter represents an even better business opportunity. As we learned from Charles Darwin, those who adapt are the most likely to survive and thrive. Small investments result in significant preparation for an unpredictable future.


Climate migration is here. The U.S. must invest accordingly.

At the same time, President Biden — home from COP26, the United Nations climate summit — claimed victory with the passage of the bipartisan Infrastructure Investment and Jobs Act, which promises more than $1 trillion in funding for renewing transportation and utilities, and enhancing broadband Internet access.

But as weather events like that in the Pacific Northwest show, the president’s Build Back Better agenda is already deeply at risk from climate change. So it’s crucial, as the United States deploys tremendous new spending to rehabilitate infrastructure, that its leaders think much harder about where the funds are spent to avoid throwing good money after bad.

Six of the United States’s wealthiest cities — Boston, New York, Miami, Houston, Los Angeles and San Francisco — are heavily exposed to climate change. Frequent storms, rising sea levels, forest fires and droughts will plague these great cities more and more. Their budgets will be strained by the billions to be spent on adapting infrastructure and moving people farther inland. For now, they can afford to.

Other cities can’t. Climate models make clear, for instance, that New Orleans is going the way of Venice. In 2005, Hurricane Katrina destroyed thousands of miles of power lines and caused $161 billion in damage in Louisiana and Mississippi. Last year, Hurricane Laura brought Category 4 winds and destroyed nearly 2,000 transmission structures.

Residents need their electricity. But spending billions to reinforce or rebuild power lines isn’t a good investment when they’re sure to be destroyed again.

Not every place stricken by natural disaster should be abandoned. Where populations continue to grow, or where there is indigenous will and investment to rebuild, there is hope for recovery. That is not the case for places such as New Orleans, where populations are declining and no new job opportunities are emerging.

The country must realistically assess which geographies are becoming unlivable and which are well suited to larger population settlement. It should then offer incentives for migration toward the latter and away from the former — and direct infrastructure spending accordingly.

Climate models tell us that states such as South Dakota, Missouri and Pennsylvania are becoming more livable over time and ought to gain in population. It makes sense to spend more on roads and renewable energy in those states and others with a similarly stable climate outlook.

Cities such as Atlanta, Dallas and Charlotte are already gaining climate migrants from elsewhere in the South. Millennials and Gen Z-ers have been snapping up houses in New Hampshire and Idaho, and fueling the buzzing tech scenes in Salt Lake City and Indianapolis. They’ve poured into so-called 18-hour cities such as Denver and Nashville that have lively after-work cultures in their downtowns.

A coalition of agencies, including the Federal Emergency Management Agency, the Department of Housing and Urban Development and the Army Corps of Engineers, is pushing an agenda of “large-scale migration or relocation.” The many distressed communities that qualify for the government’s Opportunity Zones, which are eligible for tax-free investment, should be filtered for climate resilience. This would create new jobs in places that need them.

Property developers should lure displaced Americans to gentrify the Rust Belt along the Great Lakes. The people of New Orleans should be given one-way tickets to Detroit, where they can contribute to the city’s nascent postindustrial revival.

A sensible plan to promote migration to climate oases could also ameliorate some of our bitter immigration and trade debates.

The country could import workers with the skills it needs and issue them “place-based” visas, directing them to areas with labor shortages. It could encourage the building of more eco-friendly, multifamily and multigenerational homes, which would hog less space than single-family plots. With more relatives under one roof, there would be greater freedom for working parents and less need for imported labor — which, granted, would mean a cultural shift for many Americans, though one whose appeal might have become clearer during the covid-19 pandemic.

Land not eaten up by sprawling cities and suburbs could be repurposed for agriculture and industry, as well as to fortify the country’s irrigation, energy and transportation networks to achieve greater self-sufficiency.

Mammals are wired with a fight-or-flight instinct, and the residents of devastated coastal areas should heed that instinct’s call to move to safer ground. It would be far wiser to encourage the next great migration than the next climate disaster. This is the way — and the where — to build back better.


From Climate Change to Climate Alpha

This decade marks the beginning of climate change taking a permanent place in our headlines — and humanity taking seriously the need to adapt to it. While climate consciousness has risen over the past 20 years and more, concerted diplomatic and industry efforts to reduce greenhouse gas emissions and other damage to our vital ecosystems are phenomena of the past decade only. Climate mitigation now dominates the international agenda. Indeed, an overwhelming 95% of total climate-related spending is focused on reducing the carbon intensity of industry, greening supply chains, and other measures.

The onus to adapt to climate change is on us

Yet the blunt reality is that global warming and sea level rise continue apace, and even the most ambitious geo-engineering schemes will not return our climate to the familiar conditions of 1990, 1900, or 1800. Our environment is a complex system undergoing modification and lurching in new directions. It will not adapt to us — we must adapt to it.

That is why, as existentially vital as mitigation investments are, an equivalent emphasis is needed on climate adaptation. Adaptation measures include building coastal defenses and flood control measures, retrofitting buildings with more passive heating and cooling technologies, relocating critical infrastructure to less volatile geographies, and large-scale population resettlement. As I explain in my new book MOVE, the number of climate migrants may exceed one billion in the coming decades as the ‘climate niche’ of locations for optimal human habitation shifts.

Multiple factors at play when considering where to invest

Climate adaptation is made even more complicated by the fact that it is not the only variable shaping our future geography. Covid and the search for quality healthcare it provoked, remote work and the desire for a better work-life balance, economic shocks, supply chain vulnerabilities, and political risks such as domestic and international conflicts — all of these factors must also be weighed when considering where to invest in personal property and commercial real estate assets.

Given the illiquid nature of real estate, this USD 200 trillion markets is relatively unprepared to adapt to such rising complexity. Indeed, the Bank of International Settlements warns of “green swan” events, namely, unexpected environmental catastrophes linked to global warming, that would cause a financial crisis with worldwide consequences, and Canadian economist and former Bank of England governor Mark Carney fear that a “climate Minsky moment” — a sudden change in investor expectations about future climate policies and the resulting fire sale of affected assets — is coming that portends a significant reckoning for today’s assets. New regulations around both transitional and physical risk are raising compliance costs and forcing the industry to adjust. Recently, a bevy of climate risk related companies have made clear which geographies are most vulnerable and should not be held for too much longer, but this is insufficient for a constructive asset allocation strategy.

Climate Alpha identifies future ‘climate oases’

At FutureMap, we launched Climate Alpha to provide the marketplace of asset managers, insurance firms, real estate developers, and others — whether pension funds or family offices — with a data-driven approach to navigating property markets in light of the unpredictable future that lies ahead. Rather than merely telling you where to sell, Climate Alpha guides you on where to buy, based on geographies that are relatively less affected by — or even benefit from — climate change, as well as demographic, fiscal, and other key trends.

Climate Alpha thus identifies the ‘climate oases’ of the future — and luckily there are many, whether in North America, Europe, or Asia, the epicenters of the world economy and real estate markets. Fortunately, some of the more climate resilient states also offer investment migration programs, whereby investors can acquire and secure an alternative residence or second citizenship in a different jurisdiction in return for investing in a host country, including Canada, Switzerland, the UK, and the USA.

The ingredients in our AI-powered formula are hundreds of datasets covering all the variables that have historically shaped property prices, melded together with geolocated climate models. We calibrate future price forecasts according to the risk, vulnerability, and readiness characteristics of each location. Machine learning is essential for this task because of the large number of indicators and the relative nature of outcomes. For example, four cities in close proximity may have similar climate profiles, but the one with higher preparedness will gain population and thus appreciate in value at the expense of others.

Investors should use this data to consider which assets to dispose of, which geographies to increase exposure in, and what time horizon to invest for. Furthermore, they should look closely at the immigration policies, investment regulations, and other characteristics of potential destinations for themselves and for their capital. These strategies together are the playbook to generate higher real estate yield despite the many potential climate, political, and economic scenarios with which we must grapple.

Climate adaptation should not be a matter of emergency response

Our vision goes far deeper than returns, however. We believe that big data can enable a gradual and peaceful new map of human geography. We have the geospatial tools, technical foresight, financial instruments, and logistical capacity to empower the world population to be both more mobile and more sustainable at the same time. We therefore believe in a world order beyond today’s sovereignty. While the globe will always be divided among sovereign nations, our geography can be programmed to optimize resources, industry, and demographics. This is the kind of thinking the world needs if we wish not only to mitigate climate change, but to successfully adapt to it as well.


Why the Great Lakes need to be the center of our climate strategy

Last month, President Biden issued an executive order directing government agencies to assess the risks climate change poses to federal assets, budgets, and investments. Presumably, this order also applies to the American Jobs Act, Biden’s $2.25 trillion plan to electrify transportation, build millions of energy-efficient homes, and upgrade to a more renewable and resilient power grid. Together with the proposed $1 trillion Green New Deal—which is aimed at creating new, green jobs and investments in frontline communities bearing the brunt of environmental injustice—they offer a blueprint for both cutting U.S. carbon emissions in half by 2030 and doing so equitably.

But neither plan explicitly grapples with the politically thorny question of where to invest. Should the money follow the people, who have flocked for decades to the Sun Belt, where homes are cheap and jobs are plentiful but climate risks mount by the day? Or, following the logic of Biden’s own order, should funds be directed to more resilient regions where people might move someday? If it’s indeed the latter, let’s make the Great Lakes great again. Not only is the region projected to avoid the most egregious climate impacts, but it also possesses an abundance of affordable housing, room to grow, and a commitment to equity and sustainability. Funneling growth there would not only address the legacies of disinvestment but create new opportunities for those who will need to move by providing dedicated resources for climate migrants relocating from other parts of the country.

The decisions can no longer be put off until the future. New data from the EPA reveals temperatures are rising, precipitation patterns are changing, and abnormal weather is the new normal. The problem is that development is still booming in some of the areas of the country most at risk.

Extreme heat is the number-one weather-related killer, but many of the country’s fastest-growing cities—Miami, Phoenix, and Austin among them—are already hot, and getting hotter. But Phoenix still grew by an average of 200 people per day for the last decade, despite breaking its own heat-related records in repeated succession in 2020, including number of days over 110 degrees. To save lives during extreme weather, we need air-conditioning, and lots of it. But abnormal weather, which is becoming the new normal, puts tremendous strain on electrical systems, as seen during Texas’s deadly winter stormSummer blackouts may become even more common, and deadlier, as temperatures soar. The energy required to save lives during these events directly threatens emissions-reduction targets, and makes our planet even hotter.

Things aren’t much better along the coasts. Around the country, more than 300,000 homes (worth $117.5 billion) will be at risk of chronic inundation from rising sea levels by 2045. But despite the increasing availability of flood-risk data, homes are still being built two to three times faster in the riskiest areas of Florida, North Carolina, and New Jersey. The most vulnerable homes in California are appreciating the fastest.

The bipartisan Flood Resiliency and Taxpayer Savings Act would require federally funded projects to incorporate climate projections into their design, so vulnerable municipalities may struggle to win increasingly competitive national competitions for resilience dollars or borrow money as their credit ratings fall. Coupled with rising flood insurance premiums and stringent building code updates, these market shifts could result in budget cuts and housing price drops that could create a positive feedback loop of decline. As far back as 2016, Freddie Mac’s chief economist warned that losses from flooding coupled with panic selling are “likely to be greater in total than those experienced in the housing crisis and the Great Recession.”

The federal government’s strategy for permanently mitigating flood losses happens primarily through post-disaster buyout programs, which suffer from inconsistencyinequityinefficiency, and a failure to address more systemic needs. That’s why, in 2020, the Government Accountability Office recommended Congress take action to develop an interagency climate migration pilot program “to enhance the nation’s resilience and reduce federal fiscal exposure.”

But climate migration—when people move due to experienced or expected climate impacts—is already taking place. An April survey by Redfin found nearly half of Americans planning to move this year factored natural disasters in their decision, bolstering a previous study indicating buyers will incorporate climate considerations when moving in the decade ahead. So where will people go?

This is where the Great Lakes and Green New Deal come in.

Some are already calling the Great Lakes the country’s climate refuge, thanks to mild weather and an abundance of natural resources, including an estimated 20% of the world’s surface freshwater resources. Buffalo has already proclaimed itself a “climate refuge city,” resettling hundreds of Puerto Rican families after 2017’s Hurricane Maria. These so-called receiving cities are the places where people will relocate to escape intolerable environmental hazards in their own communities.

Once the nation’s economic engines and manufacturing hubs, Great Lakes “legacy cities” such as Detroit, Cleveland, and Buffalo have suffered from decades of redlining, segregation, and political negligence. White flight and disinvestment led directly to years of contaminated water in Flint and similar crises. But these cities never abandoned their hopes for a renaissance, still possessing anchor institutions such as universities and hospitals, not to mention the capacity to house populations twice as large as today’s residents.

Forced to grapple with a shrinking tax base, they’ve also became leaders in sustainability. For example, Flint, Michigan; Worcester, Massachusetts; and Rochester, New York, are remediating contaminated land to create new amenities. In Ohio, AkronCincinnati, and Cleveland have focused their efforts on racial equity and resilience. Dayton, Toledo, and Detroit welcome refugees and immigrants to cope with population loss.

No place is immune to climate change, but these cities offer a solid foundation for investing in hard infrastructure and providing frontline communities with green jobs, affordable housing, and freedom from egregious climate risks.

What about people living along the coasts and in flood plains? Don’t they deserve green jobs, too? How do we ensure communities on the literal front lines—the ones who can’t move—aren’t left behind? And how can we ensure Great Lakes communities aren’t gentrified by wealthy climate migrants or barricaded by NIMBY homeowners already present?

The trick is to link the two: earmarking $500 billion for climate mitigation to frontline communities, as the Green New Deal for Cities would do, but also to make robust infrastructural investments in areas like the Great Lakes that are destined to be a refuge for people seeking relief from climate change. A robust federal climate migration pilot program must identify places where relocates will move to, including by leveraging other federal resources to cities and states that build resilient housing and economic opportunities in safe locations.

One tool legacy cities have wielded to preserve future affordability is land banks and land trusts, using public money to acquire and insulate properties against market appreciation. The American Jobs Act will reportedly include $318 billion to preserve or produce 2 million units of housing, including $45 billion for the National Housing Trust Fund established under President Obama to subsidize shelter for the poorest Americans.

Once again, it’s not only a question of how much, but where and for whom. The Biden administration should ensure those funds are steered toward land banks and land trusts in more resilient areas, using the EPA’s indicators as guides, and offer green jobs recipients in frontline communities priority access to affordable housing under these plans.

The federal government has the power to persuade with its dollars, by directing targeted investments to cities and regions where people could or even should move, with a once-in-a-generation opportunity to steer Americans to safety on higher ground. Funneling targeted infrastructure spending toward regions with fewer climate risks and providing dedicated resources to help climate-affected communities relocate can reap the benefits of mitigation and adaptation simultaneously. It can also ensure the longevity of these programs, providing a new legacy for the rest of the world to live up to.

Get started for free

Let us know who you are

I am a home buyer or seller

Climate Alpha HOMES

Enter your property data to see how climate change will impact its future value
Start for Free

I am an investor

Climate Alpha PRO

License access to our multiple products on our cloud-based enterprise platform
Start for Free

I am a
government official

Climate Alpha CITIES

Look up your city’s unique combination of Resilience Index™ scores to assess preparedness for disruptions and benchmark nationally
Start for Free

We use cookies to improve your website experience. By using our website, you consent to our use of cookies. You can manage your preferences in your browser settings.