How One Company, AT&T, Is Using Models to Prepare for Natural Disaster Costs

By | March 28, 2019

By 2050, residents of southern Florida could become familiar with storms borne on 90-mph winds. Water levels during floods will rise by an average of 5 percent across the Southeast. And it will not be out of the ordinary for swaths of southeastern Georgia to be inundated under waters as much as 10 feet deep.

Those predictions, prepared by researchers at the U.S. Department of Energy’s Argonne National Laboratory in Illinois, aren’t intended to protect residents. Rather, they were commissioned by AT&T Inc. to help the company tame its own rising natural disaster costs, by building its infrastructure with local climate change in mind.

AT&T paid Argonne $375,000 to model flooding, hurricane and wind storms at the neighborhood level in Florida, Georgia, North Carolina and South Carolina, according to Charlene Lake, the company’s chief sustainability officer and senior vice president for public affairs.

She said the next step is to try to predict droughts and wildfires, and potentially expand that analysis for the rest of the country.

“This tool will help us understand the potential impacts of climate change up to 30 years into the future,” Lake said in a phone interview. She said that so far as she knows, AT&T is the first telecom company to use such a model.

Lake said that AT&T is looking at how it can share that data with municipalities, universities and others who might be able to use it.

The decision to start building with climate change in mind follows a string of high-cost disasters. From 2016 to last year, the company spent $874 million on natural disasters, including $626 million in 2017 alone.

AT&T is the latest example of large companies bracing for the effects of global warming. That preparation is in stark contrast to the Trump administration, which has dismissed the threat of climate change, and even reversed a policy of incorporating future flood risk into federal infrastructure designs.

Energy Secretary Rick Perry, whose department oversees Argonne, said in 2017 that he doesn’t believe carbon dioxide is causing global warming.

Major U.S. companies appear not to share that view. Of the 30 largest publicly traded U.S. companies by market capitalization, 20 say they have identified “inherent climate-related risks with the potential to have a substantial financial or strategic impact” on their businesses, according to reports provided to CDP, a U.K. nonprofit.

AT&T will use the modeling from Argonne to guide its $20 billion annual capital investment spending, according to Scott Mair, the company’s president of operations. That includes deciding whether to elevate their cell towers and other infrastructure in anticipation of land going underwater, or protect them with berms or other barriers. It also means knowing which towers to fortify against high winds — and how high — and burying additional telephone lines.

Wildfire Models

If AT&T also starts modeling wildfire data, it can use those projections to decide how much land to clear around its cell towers and other facilities.

“Historically, our engineering teams have used data from experience,” Mair said. “What’s unique about this work effort is, it’s not just history. It’s using history and projecting it forward, to anticipate essentially what climate change will bring to us in the next 25 or 30 years.”

One thing that AT&T won’t do with the data, Mair said, is project which parts of the Southeast U.S. will no longer have customers in 20 or 30 years because of rising seas and severe flooding — and where the company should therefore stop investing in new infrastructure that nobody will be around to use.

“We serve our customers where they are today,” Mair said. “We are not trying to forecast where people are not going to live.”

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