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Is Heightened Concern about Preparedness a Sign of Being on the Lunatic Fringe?

NO IT ISN'T — and here’s why...


Safeguarding a household’s safety against all risks is impossible. Spending more money to guard against potential disasters makes sense only if there is evidence that there is more risk.

And the experts are saying risks to our water supplies are going up.

“Stationarity is Dead”

“Stationarity” is the assumption that, statistically speaking, the future looks like the past. It can apply to any prediction about the future.

Hydrologists are the experts on water supply risk. They have the unenviable job of planning for the future of our water supply. Their forecasts play a major role in the decision-making about everything from dams to agricultural investments.

Stationarity says that the average annual rainfall for the next 50 years, and how much it varies from year to year, will hold to the patterns of the last 50 years. Planning is much easier when this assumption is valid. If stationarity is a valid assumption, then, if there is enough data for the last 50 years, the size of dams needed, to take one example, can be predicted with a high degree of confidence.

Hydrologists have known since they first started using stationarity as an assumption in their models (in the 1950s) that human activity ensured that the future would be different from the past. However, in their models, they could account for measurable factors, like changes in runoff due to increased development.

But now, the changes are becoming more drastic... more unpredictable. However, prominent hydrologists say that changes in our weather are rendering stationarity invalid, in ways that cannot be accurately adjusted in their models. So a completely different approach to forecasting water needs must be found.

The Problem Goes Beyond Water Supply

Stationarity has been a bedrock assumption in planning models, in everything from building codes to home insurance. Making matters worse is something that has always been a problem with predicting the future from the past — we have data for only a few past decades.

Huge floods up and down much of the Mississippi are happening far more frequently than models assuming stationarity predicted. The levies, canals and gates build by the U.S. Army Corps of Engineers were all designed based on such models. But conditions have gone way past what was predicted.

Is this really a problem? A big Problem?

On this issue, we go with the smart money. Investor Vinod Kholsa and Google have invested millions into a new breed of insurance company, Weatherbill, They push the edges of software technology to address the increasing need to insure farmers against crop loss, because of more erratic weather.

In other words, TRADITIONAL RISK ASSESSMENT (i.e., underwriting) NO LONGER WORKS. Only with new technology can insurance companies responsibly insure crops against bad weather. This is millions of dollars of investment taking as a given the fact that our old models will fail us, and new ones created.

Heightened concern about the future of our water supplies is NOT the thinking of any lunatic fringe; it's just a sensible response to what is ACTUALLY HAPPENING. Since the one thing we know is that we DON'T know what is going to happen, we need to plan accordingly.


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