INSIGHT: Did Amazon Consider Climate Risk for Its New Headquarters?

After a year’s worth of decision making, incentives, and speculation, Amazon finally announced the location of their second headquarters. Surprising everyone, the Seattle-based consumer giant said its new headquarters would be split between two locations: Long Island City in Queens, N.Y., and Crystal City in Arlington, Va., located just across the Potomac river from Washington, D.C.

In its initial announcement, Amazon said it would be investing billions of dollars in both cities, promising to hire more than 25,000 employees, and significantly developing local infrastructure. While evaluating the prospective cities, Amazon considered multiple aspects in each community, such as local operating costs, incentives, and quality of life. What is surprising is what wasn’t listed as a part of its criteria—climate risk. Amazon didn’t return a request for comment on whether climate change is playing a part in its HQ2 decision-making process.

While Amazon announced Feb. 14 that it wasn’t moving forward with its HQ2 plans in Long Island City due to opposition from some local and state officials, it also may have avoided what could have been a costly decision.

If we look at the company’s past plan of a second headquarters in Queens, we can see that it would have been located in a flood plain. Being right next to the water, many of the low-rise buildings in Queens are already at risk.

Costly Disasters

Natural disasters, climate hazards, and years of social vulnerabilities have cost the U.S. billions of dollars. Reinsurance company Swiss Re says the total economic losses from natural and human-caused catastrophes in 2018 was $155 billion. In 2017, it was $350 billion, reflecting more natural disasters that year. Climate hazards, and years of social vulnerabilities to them, have cost the U.S. billions of dollars and may explain how those figures vary from year to year.

Given the scope of this now past investment, Amazon had a responsibility for, and interest in, paying close attention to the impact of its development on local climate vulnerability. But the recent news of Amazon canceling its HQ2 plans in New York was due to opposition from state and local politicians, not the potential climate risk in the Long Island City area, according to the company.

Despite no immediate plans to reopen the HQ2 search, this is an overall opportunity for Amazon to implement climate change considerations in its HQ2 decision-making process, for the Northern Virginia site, and for any future HQ2 city.

To its credit, recently Amazon introduced Shipment Zero, a plan under which 50 percent of all its shipments will have a net-zero carbon impact by 2030. Amazon also said it plans to release its company-wide carbon footprint to the public later this year after years of criticism for not disclosing more information about its environmental impact, including related goals and programs.

Adapting to Climate Change

There is a pressing need for all companies and cities to pre-emptively adapt to expected climate stress. They should not only consider climate mitigation but also think more cogently about climate adaptation initiatives.

The Urban Adaptation Assessment (UAA) is a tool that empowers city officials and business leaders like Amazon by providing climate vulnerability assessments, data, and a graphical interface to help make critical decisions that affect their future.

While New York City has a comprehensive resiliency plan (OneNYC), the UAA would add more insight into preparing for a range of anticipated climate hazards and expected costs under current and future conditions. For example, under an intermediate scenario from the National Oceanic and Atmospheric Administration, New York City could see $1.8 billion in damage arising from sea-level inundation in 2040.

Furthermore, Arlington isn’t immune to climate change hazards. While Virginia also has a resilience plan (THRIVE: Resiliency in Virginia), local climate planning is vital. Although the UAA doesn’t include Arlington, the tool does provide insight from its nearest neighbors, Washington, and Alexandria, Va.

Using NOAA sea-level rise projections, for example, the District of Columbia could expect a 1.2-foot inundation in 2040 under an intermediate scenario. The UAA estimates that the cost from a 1-foot sea-level rise would approach $155 million. Down the river in Alexandria, a flood in 2040 could cost up to $25 million in damages, and a 1-foot sea-level rise would inundate significant portions of the land fronting the Potomac and Four Mile Run rivers. Likely, Arlington is in a similar position to Washington and Alexandria.

Ultimately, it is important that cities—and any company that is hoping to build new infrastructure—have access to data and tools to explore what the best adaptation strategies are, where their money should be going, and how ready their infrastructure is for climate change.

Developed by the University of Notre Dame, the UAA is an open-source, free measurement and analysis tool that collates a rich data set of more than 270 cities in the U.S. whose populations are above 100,000 in all 50 states and Puerto Rico.

It presents a Risk Score and a Readiness Score for each city, housed within a profile that allows users to view indicators across risk and readiness for each of the climate hazards, including future projected climate costs.

Funded by The Kresge Foundation, it also is one of the first climate tools available that shows social vulnerabilities at the neighborhood level. For each city, the tool provides metrics for vulnerabilities related to flooding, extreme heat, extreme cold, drought, and sea-level rise, as well as the city’s readiness to adapt. All this data could inform Amazon’s plans.

Investing in Adaptation Strategies

With a tool like the UAA’s interactive mapping, decision-makers can visualize where climate hazards and social vulnerabilities are highest, and consider adaptation strategies to help ensure the distribution of resources to improve social equity across communities.

According to data from Climate.gov, the number of billion-dollar disasters is on the rise. Its data show the annual average number of billion-dollar events (in Consumer Price Index-adjusted dollars) from 1980-2016 was 5.8 . Most recently, from 2013-2017 the annual average was 11.6 events (CPI-adjusted), with 2017 tying 2011 for the highest number of billion-dollar disasters at 16.

Not investing in adaptation strategies is bad for business—the data say so. The U.S. is losing billions on natural disasters and with tools like the UAA, leaders can decide where to place resources in order to reduce these costs. The tool contains invaluable data to help inform Amazon’s decision on a new headquarters city, and the decisions by civic leaders in their respective cities.

It also can help show areas where greater investment can provide higher payoffs, and where it would have the most impact on social infrastructure. The UAA even captures potential inequities within a city, catalyzing conversation around the implementation of more inclusive adaptation options for all residents.

The day is here when corporate strategies and government decision making must take into account local vulnerabilities to climate change. Such discussions are made more cogent and coherent by the use of comprehensive data and analytics offered by programs such as the Urban Adaptation Assessment.

Patrick Regan is a professor of political science and peace studies at the University of Notre Dame. He serves as associate director at the Environmental Change Initiative, and oversees ND-ECI’s Global Adaptation Initiative (ND-GAIN). In this role, he leads academic scholarship around ND-GAIN by amplifying faculty engagement in climate adaptation, identifying funding opportunities to enhance the university’s climate research capacity, and directing scholarly output and products. He is the author of five books, including The Politics of Global Climate Change (Routledge, 2015).

The opinions expressed here do not represent those of Bloomberg Environment, which welcomes other points of view.