New report finds investing in resilience saves jobs and incomes in Sacramento

Every $1 spent on climate resilience and preparedness saves the Sacramento area $10.80 in damages, cleanup costs, and economic impact, according to a new economic study by Allstate, the U.S. Chamber of Commerce, and the U.S. Chamber of Commerce Foundation.

The study, "The Preparedness Payoff: Sacramento," models three Sacramento disaster scenarios (drought, major storm/mudslide, and wildfire) ranging in damage and cleanup costs from $1 billion to $3.4 billion. Each model revealed substantial economic savings resulting from upfront investment in disaster resiliency programs and resources, preserving thousands of jobs and incomes, reducing the number of people displaced from their homes, and maintaining production to help local economies rebound faster. On average, for every $1 spent on resilience, communities in Sacramento save $4.80 on economic costs alone. When also considering the cost savings from damages and cleanup (average of $6 in savings), each $1 invested saves $10.80 in economic savings, damages and cleanup.  

Sacramento's unique geography and emerging disaster cycle of droughts, wildfires, extreme rainfall, and mudslides contributes to steep costs. Persistent droughts have devastated California's agricultural output, leading to billions in economic losses statewide. Plus, California has endured five of the largest wildfires in state history over the past decade, resulting in $25 billion in annual damages.

Business and government leaders convened in Sacramento Tuesday for the Climate Resiliency Forum to discuss the new report findings and tangible steps that businesses, government leaders, and citizens can take to reduce the economic costs of future disasters and create a more prosperous future for the Sacramento region.

"Given our valley terrain, hot summer temperatures, abundance of trees, and being surrounded by rivers, the potential for natural disasters is very real throughout the Capital region and entire Central Valley," said Sacramento Metro Chamber of Commerce President & CEO Robert Heidt. "In fact, the Sacramento Area Flood Control Agency identifies Sacramento as the nation's greatest metropolitan flood risk, and that's in addition to the very real potential for drought and wildfire. We absolutely need to advocate for investment in resiliency and preparedness so we can negate devastating impacts to our businesses and communities. As always, we applaud and actively support efforts to advance climate mitigation and adaptation investment for the future of our region."

The new study found in one scenario that if $83 million is invested in resilience and preparedness before a drought (enough to halve the damages), the Sacramento area would save almost 4,900 local jobs, $618 million in GDP, and $368 million in earned income for residents. If the city didn't make those investments, it would lose nearly 9,700 jobs, $1.2 billion in GDP, and $721 million in earned income for residents.

In addition, communities see gains from preparedness investments even if a disaster doesn't hit. In the drought scenario, Sacramento would create over 900 jobs, increase production by close to $107 million and grow local income by more than $69 million whether a drought occurred or not.

"The economic benefits of investing in resilience are clear. It's also essential to the availability and affordability of insurance for years to come," said Elliot Stultz, Chief Sustainability Officer at Allstate. "As communities struggle with the impacts of more frequent, severe weather, investments in resilience today can empower them to prosper."

The Sacramento research builds on a report earlier this year that analyzed 25 disaster scenarios in cities across the U.S. and found that on average each $1 spent on climate resilience saves $13 in economic savings, damages, and cleanup costs. For more information and a detailed methodology, download the 2024 Climate Resiliency Report here.

"Each scenario we modeled for Sacramento and for cities across the country underscores the business case for investing in resilience, demonstrating remarkable benefits that help communities before disasters occur," said Rob Glenn, Vice President, Global Resilience, U.S. Chamber of Commerce Foundation. "As 2024 ends, we are reminded of the staggering costs of disasters, with 24 billion-dollar events this year alone. This study provides communities with actionable insights to reduce impacts on people, save jobs, retain income, and minimize economic disruption."