It’s unequivocal: climate-related natural disasters are happening more often and becoming more severe. As of September 2023, the U.S. has experienced 23 confirmed weather/climate disasters with losses exceeding $1 billion — a huge spike compared to even the most recent years. On average, there were 8.1 disasters per year in the U.S. from 1980 to 2022, but in the last five years alone, the average has risen to 18.0 disasters. If we zoom out to a global scale, there were nearly twice as many major recorded disaster events (7,348) between 2000 and 2019, with more than 1.23 million lives claimed compared to the two decades before that (4,212 disasters).
With the astronomical cost of natural disasters, there should be market forces driving solutions
Since 1980, the U.S. has sustained hundreds of extremely high-cost weather and climate disasters — including hurricanes, fires, floods, and storms — and the loss of dollars, infrastructure, and lives is almost unfathomable:
- Since 1980, there have been at least 357 weather and climate disasters in the U.S. where the cost in damages for each event reached or exceeded $1 billion (including Consumer Price Index adjustment to 2023)
- The total cost of those events was $2.5 trillion
- Over the last seven years alone, 122 separate billion-dollar disasters have killed at least 5,000 people and cost more than $1 trillion in damage
Natural disasters embody the tragedy of the commons, posing significant damage and danger to every possible stakeholder — like local residents, businesses, insurers, and governments of all ranks — no one is immune. Unregulated emissions from industrialized areas may help generate prosperity in specific regions, but inflict harm to our ecosystems and everyone on the planet. Typically, when so much is at stake, we see the market forces shift into action with entrepreneurs, investors, and governments stepping up to produce solutions. Not only is it necessary, but there are clear opportunities for those stakeholders to reduce losses and benefit, financially or otherwise.
One of the leading market forces is generally policy, which plays a critical role in not only distributing relief, but incentivizing private and public activity to build innovative solutions that are mutually beneficial. Take the Inflation Reduction Act (IRA), which includes $2 billion in direct funding for hazardous fuels treatments, forest thinning, and vegetation management in national forests. It also offers $100 million in grants for landowners with fewer than 2,500 acres of forestry to participate in emerging private markets for climate mitigation and forest resilience. State governments are also taking action. For instance, the Florida Senate budget includes $4 billion for hurricane relief aid, infrastructure repair, and coastal resiliency. California also recently signed a bill that provides more than $1.3 billion over the next two years to accelerate forest health and wildfire resilience projects. These efforts are shifting public funding opportunities and escalating the pace of procurement and deployment.
The opportunity for disaster mitigation across the spectrum
Mitigating a natural disaster encompasses a chain of events: prevention, prediction, detection, and response. Advances in weather prediction and early-detection systems, as well as the deployment of technology designed to prevent disaster from striking once an event may be on the radar, have been the predominant focus areas for VCs and climate entrepreneurs. The technology in this space is showing strong promise. Tomorrow.io, a company powering weather insights around the world, and Pano.ai, a company delivering actionable intelligence for wildfire management, have built significant businesses and raised large rounds of capital. Even forest fuel management is attracting great entrepreneurs: Burnbot, for example, created a fleet of heavy-duty forestry masticators and a robotic perimeter-generator for executing controlled burns precisely. Eclipse invested in Gravity, a preventive decarbonization platform that measures the carbon emissions of industrial businesses across a wide-range of sectors, and Circular, a platform that connects buyers and sellers of post-consumer resin. Similar companies are also raising significant rounds and closing deals with commercial and government customers.
There is undoubtedly a need for solutions to predict and prevent climate-related issues — and there’s more work to do here — but there is a disproportionate focus on prevention and detection technologies, with a significant gap in investment and innovation on the response side. Ideally, it would be great if homes weren’t lost due to natural disaster destruction and a devastating fire or flood didn’t endanger lives. But we don’t live in a digital world, we live in a physical world where atoms still need to be moved — and quickly — when disaster strikes. Preventative technologies will never be enough, and in the meantime, climate patterns are only worsening. Digital solutions, alone, won’t extinguish real-world flames. We need action over abstraction — and a modern approach to disaster response yesterday.
Response is a less developed market because it is highly complex — it requires a full stack approach, and there are extensive nuances with external factors like the insurance industry, policy-makers, utilities, and coordination across the national ecosystem. However, the market opportunity to develop scalable solutions for disaster response is expansive. It’s tragic that despite all the incredible progress and technological advancement that the world has made in so many fields, today’s disaster response solutions are the same as they were hundreds of years ago. Take the Great Fire of London in 1666, for example:
The portrayal of how first responders worked to put out that fire appears eerily similar to what we see today:
It’s not too late to save our planet from the devastation that comes with climate disasters
Despite industry hurdles, however, closing the gap in disaster mitigation is attainable.
I grew up amidst frequent wildfires in the Okanagan Valley in British Columbia, Canada, and what was once an occasional event every few years has now escalated to a 4x annual recurrence. Our changing climate has made large swaths of the Valley dangerous, uninsurable, and frequently toxic, with particle pollution at extreme levels for days and even weeks. This type of devastation is happening around the world and, at this point, the scope is innumerable.
The Eclipse team is looking to bring our collective skills and experience to find entirely new technological solutions to develop better emergency response systems. If we can efficiently stop fires or floods once they start, we can save lives and critical infrastructure and reduce the need for humans to be at risk in the throes of disaster zones.
If you are on the cusp of developing a solution for disaster mitigation (whether prediction, prevention, or response), I’d love to hear from you: aidan@eclipse.vc.
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