SACRAMENTO, CA – 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.”
Supporting Communities and Small Businesses
This research was produced jointly by the U.S. Chamber of Commerce, Allstate and the U.S. Chamber of Commerce Foundation to strengthen community resilience to increasingly severe weather.
The partnership builds on Allstate’s work to strengthen communities to empower people so they can thrive and the U.S. Chamber and Chamber Foundation’s disaster response and resiliency solutions, which include training and resources to help businesses and communities prepare for and recover from disasters.
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About the U.S. Chamber of Commerce
The U.S. Chamber of Commerce is the world’s largest business organization representing companies of all sizes across every sector of the economy. Our members range from the small businesses and local chambers of commerce that line the Main Streets of America to leading industry associations and large corporations.
They all share one thing: They count on the U.S. Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, we have advocated for pro-business policies that help businesses create jobs and grow our economy.
About the U.S. Chamber of Commerce Foundation
The U.S. Chamber of Commerce Foundation harnesses the power of business to create solutions for the good of America and the world. We anticipate, develop, and deploy solutions to challenges facing communities—today and tomorrow.
About Allstate
The Allstate Corporation (NYSE: ALL) protects people from life’s uncertainties with a circle of protection including cars, homes, electronic devices, benefits and identity theft. Products are available through a broad distribution network including Allstate agents, independent agents, major retailers, online, and at the workplace. Allstate is famous for the slogan You’re in Good Hands with Allstate®. For more information, please visit: https://www.allstate.com/ or https://www.allstatecorporation.com/.
About Sacramento Metropolitan Chamber of Commerce
The Sacramento Metropolitan Chamber of Commerce advocates for and supports the inclusive economic prosperity of our Capital Region by leading efforts for business. Established in 1895, Metro Chamber is the largest, most prominent, and established voice for business representing members and their workforce in El Dorado, Placer, Sacramento, Sutter, Yolo, and Yuba counties. The Metro Chamber provides businesses and individuals with the programs, services and advocacy needed to build vibrant communities, a ready workforce, connected region and strong business. For more information, please visit www.metrochamber.org.
