Managing Flood Risk under Climate Change, with Carolyn Kousky

Notable Quotes

• The disproportionate impact of flooding on low-income communities: “44 percent of Americans don’t have $400 in liquid funds for an emergency. And so, if you don’t have $400 for an emergency, you certainly don’t have the thousands, tens of thousands, or even much more that you need to rebuild your home [after a flood] … What do you do?” (4:12)
• The need for federal flood insurance: “To be covered for flood, you actually have to purchase a separate flood insurance policy. For a long time, the private sector wasn't willing to offer flooding because it's such a catastrophic and difficult risk, so the federal government stepped in over 50 years ago and set up the National Flood Insurance Program.” (7:19)
• Limitations of insurance in covering extreme weather events: “Insurance typically is a one-year product, so it only prices for this year. So, it's really important that insurance pricing be able to take account of all the climate changes that have occurred to date. We're seeing impacts from climate right now, already. This isn't a future issue anymore—it's a today issue … But insurance is never going to be a tool to send price signals on the risk in 10 or 50 years down the line … It is limited in its ability to bring future climate into decisionmaking.” (12:29)
• Using green infrastructure to mitigate threats posed by floods: “Whether it's mangroves … or inland wetlands storing floodwaters, or green infrastructure in cities to manage these heavy rainfall events, there's a lot of ways to make use of natural systems to lower disaster risk, and those also then convey a whole range of co-benefits to communities in terms of recreation, and habitat, and carbon sequestration.” (26:06)

Top of the Stack

• "Insuring Nature" by Carolyn Kousky and Sarah Light
• The Cure for Catastrophe by Robert Muir-Wood

The Full Transcript

Kristin Hayes: Welcome to Resources Radio, a podcast from Resources for the Future. I'm your host, Kristin Hayes. My guest today is Carolyn Kousky, Executive Director at the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania. Carolyn's research has examined multiple aspects of disaster insurance markets, the National Flood Insurance Program, federal disaster aid and response, and policy responses to potential changes in extreme events with climate change. I'm very proud to say that Carolyn was a colleague of mine at Resources for the Future for a number of years, and she continues her connection with RFF as a university fellow. We've talked about having Carolyn on Resources Radio since the inception of the program, and I'm really pleased that we're making it happen now. Carolyn and I will be talking about resilience to natural disasters, particularly flooding, whether our system of funding for that resilience is working, and for whom, and what other options the US might want to consider. Stay with us. Carolyn, welcome to Resources Radio. It's great to talk with you this morning.

Carolyn Kousky: It's great to be here.

Kristin Hayes: Great. Well, I wanted to kick things off by asking you to tell our listeners a bit more about your background, and in particular how did you come to focus on risk as part of your economics training?

Carolyn Kousky: I actually started thinking about flooding and natural disasters a little bit by accident. But I did grow up in St. Louis, Missouri, which is right by the confluence of the Missouri and Mississippi Rivers, so flooding was part of the conversation when I was a kid. I even remember going to see some neighborhoods and roads that had been flooded out in the large Midwestern floods of 1993. So I guess I circled back to that early exposure to thinking about disasters. I was in the middle of working on my dissertation when Hurricane Katrina hit, and I got pulled into some research with my advisor that I ended up finding fascinating, and shifted a lot of my work to thinking about how we manage natural disaster risk.

Kristin Hayes: That is very interesting. I want to note for our listeners in one brief sidebar, how many people start by explaining how they ended up where they are by noting the element of chance or just following opportunities that comes with that. So again, you're in good company of people who've taken opportunities when they come and shaped their careers accordingly. I just want to reassure all our young listeners out there that you can just figure out things as you go. It's always a good way forward.

Carolyn Kousky: Yeah, and things do snowball. I wrote one of my dissertation chapters on flood insurance and I think if you'd asked me then, I never would have thought that I would have spent the next 10, 15 years thinking about flood insurance. But I have, and here we are.

Kristin Hayes: Yeah. And here we are. Yeah. Well, so obviously today, the subject of today's podcast is fundamentally on climate risk associated with extreme weather events in a changing climate. And as I imagine, all of our listeners know, the number of extreme weather events is in fact predicted to rise as the climate continues to change. And many of these extreme events have to do with water, of course. Either too much of it, leading to flooding. Or too little a bit, which can lead to drought. Or conditions that can lead to increased risk for wildfire, and more. So given your particular expertise in flooding, I wanted to start there and maybe ask if you could just explain a bit about how the system works. How do property owners actually protect themselves against flood risk?

Carolyn Kousky: Yeah, good question. A lot of what I focus on is the financial recovery of households from disaster events like big floods, and how they pay for all the damage that flooding can cause. As you noted, flooding is a very serious risk for our country and is actually responsible for the most damage of any other natural disaster that the US faces. Recovery can be really difficult, and getting the money to rebuild is one part of the challenge. So if you are an extremely affluent family, perhaps you have enough money in your savings account to fund your rebuilding. But for the majority of Americans, that's not the case. In fact, 44 percent of Americans don't have $400 in liquid funds for an emergency. And so if you don't have $400 for an emergency, you certainly don't have the thousands, tens of thousands, even much more that you need to rebuild your home and replace your contents once you've suffered a really severe flood event. So if you don't have money in the savings account, what do you do?

Actually, the first line of defense for victims of a disaster from the federal government is not the free cash that people think of as federal disaster aid, but it's actually a loan that's administered through the Small Business Administration—it's business administration, but these loans go to households too. But taking on debt isn't ... That can be really good for some people and a useful way to recover. But for some folks, particularly those at the lower end of the income distribution, taking on additional debt is actually really burdensome. You still have to repay that debt, they might already be maxed out on debt. And for some, they actually don't even qualify for the loans because they don't meet basic debt-to-income ratio, thresholds, credit score testing, and so forth. So loans aren't always the answer either, particularly for low-income families. And then that brings you to what people usually think of as the traditional disaster aid, which are the grants that come from FEMA. Now those grants though, it's important to recognize, are limited in a number of ways. The first is they're not always available.

So for that program to be activated, the president has to issue a disaster declaration. And so it's only for big events. But not only that, in over 90 percent of disaster declarations, the president authorizes what's called public assistance, which is aid to local governments to help clean up debris and get infrastructure backup, and these sorts of things. But less than half of the time does the president authorize individual assistance, which are grants to households. So it really does take a very serious event to get this program activated. And so small-scale localized flooding won't qualify for this at all. When the program does begin operating, the grants are limited at a little over $30,000 and they're designed to make homes safe and habitable again after disaster, not bring you back to pre-disaster conditions. I like thinking of it like if you had a big hole in your roof from debris going through it during a severe storm, the program would pay to cover the roof so that there's not rain in your house, but not to completely replace your roof to the way it was.

So for that type of recovery, which is what people need, you actually have to have insurance. And when it comes to flooding, that gets into a whole tricky thing about flood insurance in this country.

Kristin Hayes: Yeah. So it does seem like ultimately insurance ends up being the fallback for a lot of people to cover the majority of their costs after one of these disasters. Can you tell us a little bit more about how the insurance programs work?

Carolyn Kousky: Yeah, sure. And flood insurance is actually primarily provided by the federal government. Most folks who own a home or have a mortgage take out standard homeowners insurance. But it's not always widely appreciated that those standard homeowners policies exclude flooding. So to be covered for flood, you actually have to purchase a separate policy, a flood insurance policy. For a long time the private sector wasn't willing to offer flooding because it's such a catastrophic and difficult risk, so the federal government stepped in over 50 years ago and set up the National Flood Insurance Program. This program's designed as a partnership between the federal government and local governments. So communities can voluntarily opt-in, and when they do, they have to adopt some minimum floodplain management regulations. And then once they do that, all members of their community become eligible to purchase flood insurance through the National Flood Insurance Program, which is housed in FEMA. Right now, almost all communities at risk of flooding have opted into this program. There are a little over 5 million policies in force nationwide.

Kristin Hayes: Okay. So most people get flood insurance through this National Flood Insurance Program. But do most people in fact have coverage, period? Is it mandatory? Does everyone have to have flood insurance?

Carolyn Kousky: Good question. Yes. Early on in the program's history, very few people were actually purchasing flood insurance, so Congress adopted what's referred to as the mandatory purchase requirement. That's essentially a requirement that if you have a federally backed loan or you take out a loan from a federally regulated lender for property that's located in the mapped hundred year floodplain ... So it was part of this program, FEMA map's 100-year floodplains around the country. These are areas that they estimate have at least a 1 percent annual chance of flooding in any given year. So if you have one of these qualifying loans in this area, you're required to have flood insurance for the life of the loan. The problem is that almost anyone else doesn't actually purchase flood insurance that often. So take up rates among people who have to voluntarily purchase it are really low, and that's a problem because that a 100-year floodplain designation from FEMA does not capture everybody who is at risk. So much bigger floods can and do occur that go beyond the boundaries of the 100-year floodplain.

Those 100-year floodplain maps are often based on outdated data, outdated methods, and so they're often not fully accurate depictions of the 100-year floodplain in the first place. And they also tend to not do a good job of capturing stormwater risks, so just heavy rainfall events. And actually we see in the data and the climate scientists tell us that the issue is projected to continue with climate change, that more and more of our rain is coming as these intense downpours. And what that means is that it can overwhelm local drainage and infrastructure and so you can get flooding, even if you're really far away from a coast or a river. And lots of communities are now struggling with this type of heavy rainfall induced flooding. You might not even be in a mapped 100-year flood plain and be subject to that type of flooding. So there's a lot of people at risk who aren't subject to the mandatory purchase requirement, but from a risk perspective probably still need flood insurance.

Kristin Hayes: Interesting. Okay. I also have another general curiosity question for you. So insurance is something that is a little bit of a mystery to me, no matter how long I've had it or how many types of insurance I've had over my lifetime. I want to ask. for something as unpredictable and potentially catastrophic as flood risk, how do insurance companies go about setting prices? How does the national flood insurance program, how do private insurers do that? How do they actually put a dollar amount on what they're going to ask a policy holder to pay?

Carolyn Kousky: Yeah, that's a good question. And you're not alone. We've found that insurance is a really unintuitive product for a lot of people because it's not like almost anything else you buy. So the basic idea of insurance is that you pay an annual premium of a smaller amount so that when a triggering event, so like a particular type of disaster that you're covered for happens, you have access to the money that you need to pay for those damages. Setting the price of insurance requires doing some sophisticated modeling of the likelihood of those types of different hazards happening and how much damage properties are likely to sustain. At the time that the Flood Insurance Program was created, our methods for doing that were quite crude. But over the last 50 years, they've really developed with much better data, much better technology computing power. I mean, if you just think about the changes in data and technology we've seen even in the last say five to ten years, you can get a sense of how transformative that's been. Insurance companies use these sort of more sophisticated models.

Unfortunately, the pricing right now in the National Flood Insurance Program is stuck in 1970s-based approaches to rating. That's about to change, though. The Flood Insurance Program has an effort underway to modernize their rating, they're referring to it as Risk Rating 2.0. It should be rolling out sometime in 2021, which will be important for modernizing the program.

Kristin Hayes: That is fascinating. Does it have a climate overlay as part of it? Are they actually taking that into account in new ways in this version 2.0?

Carolyn Kousky: Well, that's a really interesting question about where ... and it gets to this bigger issue of where insurance intersects with climate, which is that insurance typically is a one year product, so it only prices for this year. So it's really important that insurance pricing be able to take account of all the climate changes that have occurred to date. We're seeing impacts from climate right now already. This isn't a future issue anymore, it's a today issue. So we need to take account of all of that. But insurance is never going to be a tool to send price signals on the risk in 10, 50 years down the line. And so it is limited in its ability to bring future climate into decision making.

Kristin Hayes: Interesting. Okay. Okay.

Carolyn Kousky: There was one other thing I wanted to mention, which was why disasters are more challenging to insure in general than other types of insurance, because I think it helps explain some of the problems you see in the National Flood Insurance Program right now. I hadn't mentioned yet, but the program is billions of dollars in debt and in need of some financial reforms. But part of the difficulty is that disasters have lots of maybe quiet years where there's no disaster and then there can be a really devastating event, and disasters are spatially correlated. So when one person sustains damage, everyone in the community does as well. That means that in order to pay all those claims and not go bankrupt, an insurance company has to have access to a lot of capital in those disaster years to make those payments. That's really different than something like auto insurance. So every year a few people get in car accidents and if I get in a car accident, it doesn't make it more likely that my neighbors has got in car accidents.

And so insurers can more or less cover any claim from the premiums they take in that year. That's the basic concepts of risk pooling. But disasters, it's actually hard to do that for because in these really, really severe years, lots of members of your risk pool are going to be suffering losses-

Kristin Hayes: Sure.

Carolyn Kousky: ... so you need access to that capital. So insurers do this in a number of ways. They have their own versions of savings accounts setting aside surplus. They have their own insurance. So insurance companies purchase insurance from reinsurers, just same concept-

Kristin Hayes: I find that a fascinating concept.

Carolyn Kousky: Yeah. Exactly. Just keep passing the risk, another risk transfer. Yeah. And then they're also doing more sophisticated things, putting risk into the financial markets through insurance link securities and other types of things like that. But all of those things cost money and that has to be passed on in the price of insurance. So disaster insurance is just fundamentally more expensive than other types of insurance.

Kristin Hayes: Sure.

Carolyn Kousky: And it's hard for even a government program to get around that. So in the Flood Insurance Program, you see this tension between what might be risk based pricing and making sure that insurance is available and affordable to people. And if we circle back to what we talked about at the beginning about the limitations of how to pay for recovery in terms of not having enough savings and not being able to take on more debt, the people who really need insurance the most are lower-income families that don't have other sources of recovery. And yet they're the ones that are least able to afford it. So I think there's this real need for policy reform to make insurance something that low-income families can have access to.

Kristin Hayes: Okay. Well that's actually a great lead into my next question because I have been familiar enough with the National Flood Insurance Program to know that it is significantly in debt. It sounds like one of the reasons that it may be in debt is because the program is actually subsidizing ... in a certain sense, subsidizing costs. In order to keep premiums at a level that people can afford, it is in fact subsidizing some of those costs for households. Do I have that right? Or why ... Can you say a little bit more about why it's in debt?

Carolyn Kousky: Yeah. It's long been a tension in the program, this risk based pricing versus wanting individuals to cost-share some of their recovery in a sense. So if you ... We talked about that 100-year floodplain map at the beginning. Whenever those maps are updated, if that 100-year floodplain is seen to have expanded because of changing risk conditions, which could be increased development in the watershed, sea level rise, whatever it is. And you're now designated at a higher risk than you were before, you can actually keep a lower risk rate if you purchase insurance before the map change. So then there's those ... That's called grandfathering. So there's a group of policyholders that are actually at higher rate that are paying lower risk rates. So there are these classes of policy holders that are getting explicitly lower costs on their insurance. But then more broadly, to come back to some of the rating changes that are underway, right now insurance in the NFIP is based on these broad risk zones that are in these maps, and that just creates a lot of cross subsidies within these zones.

So as the program moves to more risk based pricing at a property level, some of those cross subsidies will get undone a little bit. So this will probably make insurance a little bit more expensive for some people, but it will also mean it's a lot cheaper for others. And one important point, just coming back to this equity issue about why some of these rating reforms are really necessary and I hope are allowed to go through, is that right now there's a little bit of a perverse cross subsidy in the Flood Insurance Program from low valued to high valued homes. Because insurance should really take account of the value of a structure, and for most homes, the NFIP does not currently do this. Which means low valued homes are paying more than they should, and high valued homes are paying less than they should. To the extent that you think high-income people are in high valued homes and vice versa, it's a regressive way to be pricing flood insurance-

Kristin Hayes: Interesting.

Carolyn Kousky: ... in a public program. Yeah. They'll be fixing that in the new reforms coming out in 2021.

Kristin Hayes: Okay. All right. I do think ... Again, as you mentioned, insurance is an instrument that touches many of our lives and yet it's a little bit of a black box. We just sign up for a policy, you hope it covers the things we need it to cover. So actually understanding a little bit more about the factors that the insurance companies themselves are taking into account and how those are changing over time as well I think is really, really good context.

Carolyn Kousky: Yeah. And we've been spending some time thinking about what consumers know about their risk and about insurance, and I think there really is sometimes a lack of understanding about both that can lead to suboptimal decisions on the part of homeowners. So we're thinking about types of communication that can help solve this. But let me just give you one example. Flooding is not the same everywhere in the country, right? So if you're right on the Gulf Coast, you could be subject to storm surge that literally knocks your entire house away, right? Like you have to rebuild your entire house. Well, or you could be inland far from a river, but in a little bit of a depression where every time there's heavy rain you get two inches of water in your basement, and those are radically different risks. And there's everything in between. There's river flooding, there's the possibility of infrastructure like levies failing.

So those types of flood risks are not ... the kind of differences in those and the loss profile of those is not often talked about, but you can readily understand that the type of insurance you'd need and the type of risk reduction measures you might want to adopt for someone prone to storm surge versus a few inches of water could be really different. So we've been using the term "right-sizing insurance" actually based off some work we did in Portland, Oregon, where the city has been trying to grapple with these issues to figure out how to better tailor these products to the specific needs of the specific household.

Kristin Hayes: I feel like this is a little bit of a downer question, but I want to ask it anyway. It does sound like that despite everyone's best efforts, I imagine there are in fact times where insurance can't cover the magnitude of cost as these extreme weather events are getting larger and more significant and covering more and more properties. So have there actually been instances where insurance has, for lack of a better term, failed, and where companies have gone bankrupt or not put enough savings aside? And if so, what can we learn those failures?

Carolyn Kousky: That's a really good question. And coming back to the way we were talking about how disasters have a really different loss profile than, say, automobile accidents, there's always been challenges for insurers throughout history in covering things like hurricanes, flooding, earthquakes. More recently things like terrorism and cyber, they all have this challenging profile. But what's really become an important question in the last few years ... and I think part of this was really spurred by the wildfires ... We were talking about flooding, but the wildfires in California in 2017 and 2018 is climate change fundamentally shifting some of these extreme events in a way that's going to make them uninsurable, and that's going to be really problematic because of how important insurance is in recovery as we just talked about. So I think there are some reforms that could help stabilize some of these markets and we could talk through some of those, particularly in the case of wildfire. But when it comes back to flooding and probably other perils as well, there are definitely going to be areas that become fundamentally uninsurable.

I think in the case of flooding, it's easiest to see, if you think about coastal tidal flooding or sometimes referred to as a nuisance or sunny day flooding, which is increasing in some parts of the coast now of sea level rise. So think like Norfolk, Virginia. Some of these really ground zero areas for coastal flood risk. And what's happening there is that flooding is not a risk anymore or it won't be soon, it's becoming more of a certainty. And when you're sure that you're going to get flooding many days a month, that's when insurance starts to not be the right solution. Because the costs of that are going to start to be really, really prohibitive and you can't insure something that you know is going to happen for sure, right?

Kristin Hayes: Sure.

Carolyn Kousky: Because you charge the entire amount of the loss, right? There's no cost savings in that case. And so as we approach that in some of these places, what we really have to focus on is not risk transfer, but actual risk reduction. How do we actually lower the risk of flooding in these cases? And that gets into things like changing our land use patterns, when we need to retreat from the coast, investments in grey and green infrastructure, elevating homes. The whole suite of hazard mitigation measures that we can adopt for these hazards.

Kristin Hayes: Right. That's actually a good lead in too because it does seem like there are ... And I'm going to take a step back from explicitly thinking about flood insurance for a moment, and talk to you a little bit about some of the new policy ideas that are circulating related to paying for resilience in general. A couple of specifics that I wanted to touch on. One was a recent announcement from the State of California that it's hoping to enact a bond that allows the State to borrow money to fund future disaster relief related to climate change and climate driven extreme events. So how do you feel about that sort of instrument? Or is there any insight you can share with our listeners about that sort of instrument as a way to pay for some of these future damages?

Carolyn Kousky: Yeah, I think that's exciting to see the State starting to invest in some resiliency building projects. They're not alone, there's other local governments and states that are starting to see the need for this too. And of course, I mean, we're focusing on climate adaptation, but I feel it's very important to say that the number one thing we need to do is reduce our carbon emissions, right?

Kristin Hayes: Sure.

Carolyn Kousky: To limit climate change. Okay. Now that we ... let's put that on the table. In my mind, the biggest limitation right now with climate adaptation is not bonding capacity. But bonds are what? They're just debt and you have to repay debt. And municipalities have always had the ability to take on debt for their projects. The two big things I think that are really important to put on the table when it comes to climate adaptation are, one, getting states and local governments to prioritize using their dollars to invest in climate adaptation and resilience friendly decisions about infrastructure, and building, and so forth to the extent that like this announcement in California really signals that they are prioritizing that. I think that's really fantastic. But the second thing is how do you pay back the debt? So that's financing.

It doesn't actually get to the funding. Who's actually going to at the end of the day be paying for this? And that gets into the challenging things that always hold up forward progress here, like is this federal state or local tax dollars? Is some of this is going to be imposed on households? Are we going to be assessing fees of different types? And that really gets into where you have a lot of political debate that needs to take place.

Kristin Hayes: I feel like we could easily do a podcast just on that topic. And in fact, maybe we will. I also just wanted to quickly reference a paper that you yourself recently published on disaster insurance for ecosystems in which you and your coauthor, Sarah Light, proposed that natural areas could be insured against possible damage or degredation just like real property. It's an intriguing idea. Can you say a little bit more about the concepts that you explored in that paper?

Carolyn Kousky: Yeah, sure. I think our interest in the topic really grew out of a recognition that ecosystems can provide a range of protective services that can be really important. So, whether it's, mangroves, and dunes, attenuating storm surge, or inland wetlands storing floodwaters, or green infrastructure in cities to manage these heavy rainfall events. There's a lot of ways to make use of natural systems to lower disaster risk, and those also then convey a whole range of co-benefits to communities in terms of recreation, and habitat, and carbon sequestration, and a range of other things. So they often seem like a really important investment and yet they tend to be public goods, so they tend to be underprovided in the market. And so we were really curious about whether insurance could play a role in helping increase the protection and restoration of natural systems that provide these services. And it came out of a case study that got a little bit of attention, which was—there's a coral reef off the coast of Mexico and it's a tourist heavy area. The reef is part of what drives some of that tourism, and yet storms could damage the reef.

The reef provides protection as well as recreation, all these other things. But it can be damaged by the very same storms that it's providing protection against. And it turns out ... This is not my area, I'm not a restoration ecologist, but that apparently you can send in divers right away afterwards and they can reattach some of the broken coral and it can help make sure that the reef is able to restore and thrive despite the storm event. But of course you need funding right away to be able to pay all those people to go out. And so a group of hotels and the local government got together and formed an association where they could pool money to help with, well, several things including maintenance of the reef, but also to purchase an insurance policy so that they'd have funds whenever a bad hurricane came through to rebuild the coral reef. So in our paper, we look at that concept and whether it's scalable. I think it's a very intriguing idea and points to a lot of ways in which people are starting to think creatively about risk transfer and climate.

This particular example, while interesting, I think has limitations in how widespread it can be because it's really for a type of situation where you need a lot of money after a disaster to restore a system. And often, you could pay for restoration out of other sources. It might be cheaper to self-insure. Or some ecosystems also don't need a lot of investment in restoration, they heal themselves. So I think [there are] pockets where it could be useful. But where it would be useful, it's definitely an important tool in the toolbox. We also looked at whether traditional property insurance ... so ensuring the built structures, whether you could incorporate into pricing of property insurance, the protection provided by natural systems as another way to incentivize protecting these ecosystems.

Kristin Hayes: Interesting.

Carolyn Kousky: Starting to think about insurance in new ways.

Kristin Hayes: Yeah. And also, the value of thinking out of the box around these types of solutions I think is really ... The need for creative thinking in this space is clear, and so I like it.

Carolyn Kousky: Absolutely. And I think there's a lot of room for ... I know this is something that RFF supports is getting ecologists, those people who understand ecosystem restoration and conservation together with people who understand insurance markets and the economics and the finance to come up with the right types of solutions that really requires this interdisciplinary thinking.

Kristin Hayes: So Carolyn, I thank you again for sharing all this information with us. I have learned a ton. And again, I feel like there are nine more podcast embedded in this one podcast. But given the time we have, I do want to wrap this one up with our regular closing feature called Top of the Stack, and ask you to recommend something for our listeners that speaks to these issues or more generally to natural resources, energy, environment, climate issues. Whether it's something to read, or listen to, or watch. Anything that you'd recommend to our great listening public.

Carolyn Kousky: Sure. On the topic of disasters, there's a book I really like. It's several years old now, but it's called The Cure for Catastrophe. It's written by Robert Muir-Wood of RMS, and it gives a really nice overview of the history of dealing with natural disasters from all perspectives, the need to create a holistic approach to risk management and what we can learn from the history of this globally. There's one anecdote in the book and it's full of these lovely illuminating stories that I'll just share with you because I really liked it, and it's on a different disaster topic than we've covered so far in the podcast. He talks about a girl who was in Thailand on vacation with her parents when the large tsunami came. They were out walking on a beach and she looked at the ocean and she had just been through a curriculum in the UK that was a disaster education curriculum. She looked out and she said to her parents, "I think a tsunami's coming, the ocean's not supposed to look like that."

But her parents were dismissive and were like, "No. No. Calm down. It's fine. There are all these people out here." And they kept walking and she got more and more insistent and actually quite agitated and was like, "No, this is not okay. We really have to get out of here." So to calm her down, her dad still not fully, I think, believing her, took her into the hotel where they were staying and went up to the desk and there was someone else. As it turned out, a gentleman from Japan checking in. But he interrupted, said, "My daughter's really concerned. Can you just assure her this is okay." And the gentleman from Japan looked out at the ocean and said, "I've actually lived through a tsunami in Japan and that is absolutely a tsunami coming. You have to clear the beach immediately." And the hotel ran down and cleared everyone from the beach, and it was one of the only places in the country where no one died. I think that is such a profound story for how important it is to raise awareness about these issues, even from the age of young children. Right?

Kristin Hayes: Mm-hmm (affirmative).

Carolyn Kousky: And maybe also a story about trusting our kids and when they have knowledge. So the book is full of those types of anecdotes.

Kristin Hayes: Interesting. Yeah, it is a good lesson. This is ... So many things. The next generation will almost inevitably know more about these challenges than we do, so it is a good-

Carolyn Kousky: Yes. And it behooves us to listen to them.

Kristin Hayes: That's right. That's right.

Carolyn Kousky: Yeah. Anyway, thank you for having me on. This was great.

Kristin Hayes: Yeah. Thank you so much, Carolyn. It's been a pleasure. You've been listening to Resources Radio. Thanks for tuning in. If you have a minute, we'd really appreciate you leaving us a rating or a comment on your podcast platform of choice. Also, feel free to send us your suggestions for future episodes. Resources Radio is a podcast from Resources for the Future. RFF is an independent nonprofit research institution in Washington DC. Our mission is to improve environmental energy and natural resource decisions through impartial economic research and policy engagement. Learn more about us at rff.org. The views expressed on this podcast are solely those of the participants. They do not necessarily represent the views of Resources for the Future, which does not take institutional positions on public policies. Resources Radio is produced by Elizabeth Wason with music by Daniel Raimi. Join us next week for another episode.