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Dr. Greg Characklis is the Philip C. Singer Distinguished Professor in the Department of Environmental Sciences and Engineering at the University of North Carolina at Chapel Hill. He also serves as director of the Center on Financial Risk in Environmental Systems, which spans both the Gillings School of Global Public Health and the UNC Institute for the Environment.
His primary research interests involve developing solutions to environmental challenges through systems-based approaches that integrate consideration of engineering and economic principles. Specific areas of interest include the development of improved strategies for managing water supply and treatment systems, exploration of the economic and environmental trade-offs associated with energy production — such as hydropower and biofuels — and the management of environmental financial risks.
“The purpose of the center is to help a lot of groups and businesses that experience financial risk as a result of extreme environmental events,” said Characklis. “We’re talking about things like flood, drought, high winds, extreme temperatures. So, a lot of these organizations experience big fluctuations in their revenues or costs as a result of these events and because we don’t know exactly when these things will happen or how bad they’ll be, it causes a lot of uncertainty. That leads to financial risk.”
According to Characklis, assessing and managing that risk involves a coordinated interdisciplinary effort across several different departments and professions.
“So, this work is very interdisciplinary and involves individuals from across Carolina’s campus,” said Characklis. “Engineers, scientists, economists, finance professionals, as well as policy specialists. One of the things that makes Carolina such an ideal place to do this work is the ease with which these sorts of cross-campus connections can be made.”
Recently, one of the focal points of Characklis’ work has been eastern North Carolina. After experiencing severe flooding, many communities — and the businesses that thrive within them — have an unclear path to recovery and reconstruction.
“While public safety is always the first concern with flooding, recovering financially after a flood can also be a difficult and lengthy process,” said “So, one of the challenges is understanding exactly who holds the financial risks of flooding — and once you know that, you can come up with some better ways to help them recover.”
According to Characklis, the complicated network of insurance and ownership can prove financially hazardous to even the most well-equipped of communities. As titles and policies change hands and equity is affected by natural disasters, the question of who will ultimately foot the bill becomes a complicated — and potentially further damaging — question.
“It leads to many problems for local government because they need to not only pay to maintain these properties, but they also see reductions in their property tax revenues, so our models help them understand who holds the risk and once we do that we can target solutions to help them recover,” said Characklis. “This could be encouraging greater insurance coverage, insurance uptake in some areas, buy outs of homes in frequently flooded areas — or even helping community banks better understand and assess their risks. All of these steps can help the community recover more quickly in the wake of some of the catastrophic flooding events that we’ve seen, particularly in the Eastern part of the state.”
Featured image via Jon Gardiner/UNC-Chapel Hill