Our world grapples with disasters from every direction. Wildfires spread uncontrollably. Earthquakes with unimaginable magnitudes shake the very foundations. Floodwaters sweep across our cities. Volcanic eruptions melt everything in their path. These natural calamities, however, are only part of the picture.

Beyond the forces of Mother Nature, countless cybercrimes are impacting all corners of the globe. Just think about the looming threat of EMP attacks on critical infrastructures, which add another layer of concern. It seems we teeter on the brink of catastrophe, one large-scale disaster away from an uncertain fate.

Yet, amid the challenges, it’s not too late to alter our course. If we aspire to construct a resilient and sustainable world for future generations, decisive action is required now. To navigate the intricate web of global interdependence and confront the looming threat of disasters, the key lies in unity—coming together and unlocking the potential of global collaboration.

Let’s delve deeper into the transformative power of global collaboration and explore how it holds the key to securing our chances of building a renewable, resilient future.

Addressing Large-Scale, Global Problems

Securing our future with global collaboration.

In the past, our lives unfolded in very different ways. Cities operated autonomously, and the consequences of any disasters were confined to the boundaries of that particular place. However, those days of isolation are now distant memories.

The landscape of our existence has been reshaped by interconnected and interdependent critical infrastructures. In this modern era, the notion of isolated problems has become obsolete. The challenges of today transcend borders, casting their impact across nations and continents alike.

Whether it’s a black sky event or any catastrophe with repercussions that extend far beyond their origin, the call for global collaboration has become more than a recommendation—it’s a necessity. In the face of such challenges, effective preparation and response demand a united front on a global scale. The imperative is clear: only through collaborative efforts can we navigate the complexities of our interconnected world and forge a resilient future.

Sharing the Risk and Responsibility

The Power of Global Collaboration

With a collaborative effort, the risks and responsibilities can be shared and distributed across several entities. For challenges that have an impact on the entire world, it’s unfair to put the burden on a single group or country. After all, if the entire world is at risk, it’s not fair for one entity to carry the responsibility of human continuity. That doesn’t mean the responsibility will be equally distributed. But through the power of collaboration, responsibilities can at least be shared so that one group isn’t taking on too much of the burden.

Fostering Understanding With Global Collaboration

Bringing together experts with global collaboration.

Naturally, no global collaboration comes free from conflict. From different cultures to languages to governmental bodies, our world is very diverse. While we celebrate these differences, it’s important to note that they can lead to misunderstandings and disagreements.

However, by making collaboration a priority, we can learn to understand each other’s differences, see eye to eye, and foster respect for one another.

At the end of the day, when disaster strikes (yes, we said when not if), we only have our neighbors to help us.

Only through global collaboration can we learn the bottlenecks we must overcome, communicate effectively, find common ground on various strategies for disaster preparedness, response, and recovery, and secure our chances of success when the day catastrophe inevitably hits.

Global Collaboration Builds Collective Strength

stonger together

When nations and organizations join forces, their collective strength becomes an influential force, capable of steering the course of positive change on a global scale. This united front is not merely a coming together. It is a fusion of diverse perspectives, expertise, and resources, creating a synergy that surpasses the sum of its parts.

The strength of collaboration lies not only in the shared vision but also in the diversity of the collaborators. The more varied the groups involved, the richer the perspectives, skills, expertise, and experiences contributing to the collective effort. This diversity becomes a wellspring of innovation, enabling solutions to be approached from multiple angles and increasing the likelihood of success.

It could take knowledge and expertise from all corners of the globe to solve some of the challenges the world is facing. It shouldn’t be about competing to find a solution. Collaboration is the best chance to find the answers to our most serious and pressing problems.

Building Partnerships and Trust

Trust and communication

Collaboration builds alliances and trust, even among cultures with differing perspectives. Trust is the foundation of transparent communication, a crucial element in resolving global challenges. As groups commit to collaboration over time, they pave the way for trusting partnerships that can surmount seemingly insurmountable obstacles.

To solve global disasters we need trust, transparency, and communication. While it won’t happen overnight, by committing ourselves to global collaboration, we open the door for trusting partnerships to be created.

The Big Picture

Needless to say, a narrow viewpoint isn’t going to help prevent global catastrophes or solve a global challenge. By working with diverse partners, individuals, or groups, we gain a broader understanding of the world’s needs. Collaboration compels us to look beyond individual interests. It fosters a mindset that is essential for preventing global catastrophes and solving complex challenges.

Let’s put it this way, hoping for the best is not a plan. It’s time to actively embrace collaboration, recognize its potential to address challenges, build resilience, and forge a sustainable tomorrow. In the face of global issues, collaboration isn’t just an option; it’s our best chance for a better world.

Want to do your part in global collaboration? Why not join EARTH EX, our global disaster preparedness exercise that brings together experts from around the world to brainstorm disaster preparedness and resilience solutions? Register today to be a part of a better tomorrow.

When critical infrastructures such as power grids, transportation systems, and water supply networks fail, the consequences reach far beyond mere inconvenience. The economic ramifications can be devastating, rippling through industries, communities, and households, with costs that often soar into the billions. In today’s world, where the economy depends heavily on resilient and reliable infrastructure, the cost of infrastructure failure preparedness is one that society can no longer afford to overlook.

While natural disasters like earthquakes, floods, and hurricanes remain significant threats to infrastructure, other emerging dangers such as cyber-attacks and aging systems compound the risks. The economic impacts of infrastructure failures—whether caused by physical destruction or technological disruption—underscore the critical need for proactive measures and infrastructure failure preparedness strategies to avoid crippling financial losses.

The High Stakes of Infrastructure Failures

Infrastructure forms the foundation of modern economies, supporting the flow of goods, services, and information. When this foundation is compromised, entire sectors can be paralyzed, leading to widespread economic disruption. Infrastructure failure preparedness can prevent the long-term economic consequences associated with a lack of readiness. Infrastructure failures can result from a variety of causes, including natural disasters, neglect, cyber-attacks, and aging equipment.

A prime example of the catastrophic costs associated with unpreparedness is Hurricane Katrina in 2005. The storm, which caused over $125 billion in damage, revealed glaring vulnerabilities in New Orleans’ levee system, resulting in widespread flooding and destruction. Critical infrastructures, such as power grids and transportation networks, were knocked offline, exacerbating the disaster and extending the timeline for recovery. In such cases, the economic consequences were not limited to physical damage but also included significant losses in business revenue, a decline in tourism, and skyrocketing insurance claims—all of which highlight the necessity of infrastructure failure preparedness.

The 2023 Ohio train derailment incident is a more recent example of the cost of unpreparedness. A freight train carrying hazardous materials derailed, leading to a massive chemical spill and evacuation orders for nearby communities. The economic cost was not limited to environmental cleanup; it included disruptions to local businesses, long-term health risks, and loss of public trust in safety regulations.

For more information on safeguarding infrastructure from disruptions, explore our comprehensive guide on critical infrastructure protection against disruptions here.

Economic Impact Breakdown of Infrastructure Failure

Repair and Reconstruction Costs: Direct damage to infrastructure, such as collapsed bridges, flooded roads, or downed power lines, requires immediate financial resources for repair and reconstruction. Governments often have to reallocate funds from other critical areas to manage these repairs, disrupting public services in the process. According to the American Society of Civil Engineers (ASCE), the U.S. needs to invest an estimated $2.59 trillion in infrastructure by 2029 to avoid further economic losses, making infrastructure failure preparedness even more vital.

Business Interruption: Infrastructure failures frequently disrupt business operations, causing companies to lose revenue and productivity. For example, when power outages strike or transportation routes are blocked, businesses cannot operate, leading to lost sales, delayed production, and broken supply chains. Companies that rely on just-in-time manufacturing are particularly vulnerable, as delays in transportation infrastructure can cause costly production stoppages.

Insurance Payouts: Major infrastructure failures lead to enormous insurance claims. For instance, following Hurricane Sandy in 2012, insurance companies faced claims totaling over $25 billion, significantly impacting the broader insurance industry. The increasing frequency and severity of such failures compel insurers to raise premiums, passing the added economic burden onto businesses and consumers.

Job Losses: Infrastructure failures often result in the temporary or permanent closure of businesses, leading to job losses across multiple sectors. When roads, bridges, or power lines are down, it becomes difficult for people to get to work or for goods to be delivered, further disrupting local economies. In severe cases, such as large-scale floods or earthquakes, entire communities may be displaced, leading to long-term unemployment and economic instability.

Health, Public Safety and Environmental Costs

Infrastructure failures can also compromise access to healthcare and essential services, leading to increased medical costs and public safety risks. For example, when power grids fail during extreme weather events, hospitals and emergency response teams may be left without the necessary resources to provide adequate care.
The long-term health impacts of these disruptions, such as outbreaks of disease or mental health crises, can further strain public health systems and inflate healthcare costs. When infrastructure fails, it often leads to significant environmental damage. For example, a rupture in a pipeline could result in oil spills, contaminating water sources and causing long-term ecological harm.

The Psychological Cost – Unseen but Significant

When infrastructure fails, the costs go far beyond physical repairs and immediate economic losses. Hidden expenses, particularly the psychological toll on affected populations and the erosion of public trust, often amplify the total burden. The psychological effects of infrastructure failures manifest as stress, anxiety, and long-term mental health issues. For example, Hurricane Katrina’s aftermath brought not only $125 billion in damages but also a mental health crisis, with nearly half of the survivors showing signs of post-traumatic stress disorder (PTSD) or major depression. Treating these conditions added around $4.5 billion in costs over two years.

More recently, the 2021 Texas power crisis left millions without heat during a severe winter storm, heightening stress levels for 63% of residents and contributing an estimated $1.6 billion in mental health expenses over the following year. Extended exposure to risks, such as after the Fukushima nuclear disaster, saw PTSD rates reach 15% among residents, compared to the general population’s 3-4%, showing the severe impact of prolonged infrastructure disruptions on mental health.

The Price of Lost Trust

Infrastructure failures also erode public trust, leading to additional economic costs. In Flint, Michigan, after the 2014 water contamination, even years after officials declared the water safe, residents spent an estimated $140 million annually on bottled water due to lingering distrust. The 2011 Christchurch earthquake in New Zealand resulted in a 25% drop in property values in some areas, driven by fears of ongoing infrastructure vulnerabilities. Such failures push people to invest in private solutions, as seen with the 200% surge in home generator sales following the 2021 Texas blackout, reflecting a cost shift to individuals who no longer trust public systems to ensure safety.

The Overlooked Burden

These hidden costs, encompassing mental health treatments, increased insurance premiums, and private investments, add billions to the overall economic impact of infrastructure failures. Addressing them requires more than immediate repairs; it demands proactive investments in resilient infrastructure to prevent these deeper, often unquantifiable, costs from undermining recovery. Preparedness is about safeguarding not just physical assets but also the social and psychological stability crucial to resilient communities.

To further understand how infrastructure failures affect not just economies but also individuals, explore our in-depth analysis of the psychological impact of infrastructure failures here.

infrastructure failure preparedness

Lessons Learned from Around the World on Infrastructure Failure Preparedness
Proactive investment in resilience and preparedness significantly reduces the cost of infrastructure failures. Countries and regions that have prioritized infrastructure resilience have reaped the benefits, both in terms of minimizing damage and reducing economic fallout.

In contrast, countries or regions that fail to invest in infrastructure failure preparedness often suffer devastating economic consequences. The 2021 Texas power grid failure, which left millions without electricity during a severe winter storm, serves as a stark reminder of the cost of unpreparedness. The state’s energy grid, unprepared for extreme cold weather, collapsed under the pressure, leading to widespread outages and an estimated $195 billion in economic damage.

How Preparedness Pays Off

Preparedness is not just about responding to disasters; it is about building resilient systems that can withstand them. As global infrastructure continues to age and climate change intensifies, the importance of proactive investment in resilience becomes even more critical.

Governments, businesses, and communities must work together to prioritize infrastructure failure preparedness to safeguard both economies and lives. Investing in robust infrastructure—whether through upgrading power grids, improving transportation networks, or enhancing cybersecurity—provides a significant return on investment by minimizing future economic losses. The World Bank estimates that investing $1 in resilient infrastructure can save up to $4 in future recovery costs.

Resilience also creates opportunities for economic growth by encouraging innovation and the development of new technologies. Smart infrastructure, which integrates digital tools and advanced materials, can help predict and prevent failures, reducing downtime and increasing efficiency.

Conclusion: The Cost of Inaction

The economic impacts of infrastructure failures are vast and far-reaching, affecting everything from small businesses to global supply chains. While the cost of preparing for disasters and upgrading infrastructure may seem steep, the cost of doing nothing is far greater. By investing in infrastructure failure preparedness today, we can avoid the staggering economic losses of tomorrow.

What are carbon credits?

Carbon credits are certificates that permit a company to emit one tonne of CO2 or other greenhouse gases (GHG) and the permissions reduce every year. There is a reduction quota within the schemes so businesses cannot emit unlimited GHGs into the atmosphere. The carbon credits are then used towards carbon offsetting projects to remove CO2 from the residual emissions organizations have left over in conjunction with reductions.

Key points about carbon credits

Carbon credits are market-oriented to reduce GHG emissions.
The amount of carbon credits allocated to each company is reduced over time.
A carbon credit is worth one tonne of CO2 equivalent (tCO2e) emissions which is equivalent to 556.2m³ of volume.
“Carbon dioxide equivalent (tCO2e)” is the standard unit for counting greenhouse gas emissions whether they’re from carbon dioxide or another GHG.
Some say carbon credits are an excuse to emit more carbon but in reality, the point of carbon credits is to permit a certain amount of greenhouse gas emissions, namely carbon dioxide, to be emitted in a longer scheme to then be reduced over time while implementing measures to sustain the environment, the economy, and the industry responsibly. It’s limiting, with the amounts permitted being reduced every year.

As we can agree the goal is to eliminate CO2 emissions, fossil fuels will not be eradicated overnight. Until they are responsibly replaced, carbon credits allow a limited amount of CO2 to be emitted, and every year that allowance decreases usually by 2-3%.

In this article, we’ll tell you all about what carbon credits are, answer common questions about them, talk about various trading schemes, and give some examples of international acts to keep you informed.

Types of carbon credits

There are two types of carbon credits:

Voluntary emissions reduction (VER): A carbon credit from an offsetting project that has a third-party certification standard such as the Gold Standard and many others, but isn’t certified by the UN schemes such as the Clean Development Mechanism (CDM). It is exchanged in the over-the-counter voluntary market for credits. This can’t be used to achieve obligations under the Kyoto Protocol. VER projects are certified but are not traded through a central government system.
Certified emissions reduction (CER): A carbon credit that is backed by the UN and issues a permit for one unit (tonne) of carbon emissions. They are issued to UN member states for offsetting projects through the CDM, regulated by the Kyoto Protocol, which is an offset scheme that allows a member state to offset emissions in another country because internationally, it is offset in the atmosphere anyways.
How do carbon credits work?
Carbon credits can be purchased with the intention of contributing to offsetting projects. Companies are to set lower emissions targets every year so they can reduce the emissions and not only purchase offsets. After mitigating carbon emissions, they offset the residuals. Contributing to offsetting projects is important so you can remove the carbon already in the atmosphere, fund projects for a carbon-free future, and offset the present residuals.

Where can businesses buy carbon credits?

The easiest way to buy credits comes from an emissions management platform. With Net0, you can purchase credits in the platform to offset emissions with any of our 140 + certified climate programs in the same place. The credits in our platform are equivalent to money to contribute to certified offsetting projects so you don’t need to deal directly with agents and government markets to trade carbon credits and you still succeed in fulfilling the regional obligations for reporting and offsetting accurately under the Greenhouse Gas Protocol Standards.

How much does a carbon credit cost?

Carbon prices are different depending on what you want to contribute to. They can go from roughly $10 to hundreds depending on the offsetting project and the market that it’s bought from.

VERs go from about $10 to $100 per tonne on average
CERs are over $300
We’ll discuss the trading programs below. Fortunately, Net0 emissions management software includes carbon credit purchasing and offsetting directly in the platform so you wouldn’t need to get involved with complicated markets and outside agents yourself. You can do it in minutes with Net0 which complies with the GHGP and localized regulations, automatically providing organizations a legal certificate with the offset tonnage that has been made.

nature based carbon offset price
Above is an example of carbon pricing in the Voluntary Market. If you would like to see “live” details with frequent updates, you can check out the link, but with Net0 it isn’t something you would need to study or continue monitoring in order to purchase credits and make certified offsets. Net0 offers all VER projects on our platform. For CERs entities would need to deal directly with that market, but we could help.

How large is the carbon credit market?

There isn’t one carbon credit market which we will explain below. There are regional markets. For example, GlobeNewswire reports, “Global Voluntary Carbon Offsets market size is projected to reach US$ 700.5 million by 2027, from US$ 305.8 million in 2020, at a CAGR of 11.7% during 2021-2027.” The voluntary market is certified but not traded through government systems. The offsetting projects Net0 offers are certified in the voluntary market.

The larger market is the Mandatory Compliance Market which is for CERs. This market exists to enable organizations to fulfill the obligations of the Kyoto Protocol. An example would be liable entities under the EU Emission Trading Scheme.

Carbon credit regulations

Compliance offsets are put together and regulated by government carbon reduction schemes like the CDM.

VERs are independent and not regulated by the UN or government but are certified by third-party auditors.

Trading programs

There are 17 emissions trading programs in the world, operating in 35 countries, 12 states, and 7 cities. Trading programs/systems/schemes are a regional effort that normally uses a cap-and-trade system that allows a certain amount of carbon credits to be bought and that number decreases yearly to lower emissions. Trading can happen between entities if one uses less and another needs to utilize more. Overall, the systems as a whole are designed so there are checks and balances for integrity and that decreases are successful every year. We’ll go into detail about some of the largest trading systems here and give a brief overview of some others below.

The EU Emissions Trading System

The EU Emissions Trading System (EU ETS) is the world’s first major carbon market and the biggest. It operates in all EU nations plus Iceland, Lichtenstein, and Norway. It covers about 40% of the area’s GHG emissions and limits emissions from the power, manufacturing, and airline industries. It operates under a cap and trade system meaning entities are allowed a certain amount of emissions allowances or carbon credits and they can trade them within their market.

California Cap-and-Trade Program

California has the fourth largest cap-and-trade program in the world which applies to large electric power plants, industrial plants, and fuel distributors, covering 85% of the state’s GHG emissions. The cap means there are a certain amount of credits each business is given.

The California Air Resources Board (CARB) Trading Program required that GHG levels return to those of 1990 by 2020 per Assembly Bill 32, established in 2008. The level was achieved before the desired date.

The cap also declines 2-3% every year, making carbon credits less available and in turn lowering the dangerous levels of carbon in the atmosphere. Additionally, entities covered must turn in 30% of allowances and offsets for the previous year. The trade means if they don’t hit their ceiling they can trade the credits to another company. There are also fines of four credits to one unit emitted if they aren’t turned in on time.

More restriction and trade programs today
Here are some of the additional schemes going on in the world:

The Regional Greenhouse Gas Initiative (RRGI) is made up of 9 states on the east coast of the United States. It was the first mandatory cap-and-trade emissions program in the United States.

Quebec’s cap-and-trade system is similar to California’s in that it applies to power plants, industrial facilities, and fuel distributors. Power plants and fuel distributors must buy their allowances at auction or secondary market. In fact, they share an auction with the California system. Some industries in the Quebec system get a number of free allowances that will diminish eventually.

Ontario, Canada joined auctions with Quebec and California in 2018, one year after they established their scheme. They have a similar program to both aforementioned.

The UK Emissions Trading System (UK ETS) emphasizes that the polluter is the one who pays for installation permits so they can emit. If entities exceed the height of their allowances they can buy more emissions allowances (EUAs) on the open market. Excesses can be saved for other years or must be traded. It has replaced the UK’s participation in the EU ETS.

The Tokyo Metropolitan Government began Japan’s mandatory emissions reduction program in 2010. It is called The Tokyo Cap-and-Trade Program. It covers fuel, heat, electricity (at a volume of 1500 kiloliters per year of crude oil equivalent), and large-scale office buildings which make up about 40% of the country’s GHG emissions.

China National Emissions Trading Scheme (ETS) opened in July of 2021 and it is recently rumored to be the new largest market. China plans to peak carbon dioxide emissions by 2030 and eliminate them by 2060 which is later than the rest of the world and has not shared a plan on how they are going to do it. The scheme is run by the Shanghai Environment and Energy Exchange and covers 40% of emissions which are more than 4 billion tCO2e emissions, as they are the highest producers with over 10 billion tCO2e emissions. There also isn’t any system of checking their numbers with other systems and countries to ensure integrity like there are with other markets.

Unlike with other trading systems, there is no cap on emissions so experts are questioning the efficacy. China’s Ministry of Ecology and Environment made public monitoring and reporting rules but what is reported and what is done is not the same when there is a lack of checks and balances without outside sources.International acts for carbon reductions
US Clean Air Act
In 1967 the Air Quality Act or The Clean Air Act (CAA) was established in the United States for the benefit of public safety and a healthy environment.

Since 1990 the US has been regulating emissions after the acid rain problems of the 80s. The Environmental Defense Fund has given the act recognition for reducing sulfur dioxide emissions drastically from coal-fired power plants.

The UN Kyoto Protocol

In 1997 the Kyoto Protocol was made and committed to by 192 countries to reduce GHGs. It operationalizes the United Nations Framework Convention on Climate Change. It creates targets for industrialized countries and economies to lower GHGs and report periodically.

In 2012 the Doha Amendment was made as a second commitment period and at the end of 2020, finally, 147 parties (of the 144 needed to enforce it) deposited their acceptances.

International credits are generated by two mechanisms operating under the Kyoto Protocol:

Clean Development Mechanism (CDM) for certified emissions reductions (CERs) where industrialized countries can opt for cheaper reductions in developing countries.

Joint Implementation (JI) in which industrialized countries can pay for reduction projects in other industrialized countries and provides for the creation of emission reduction units (ERUs).

The Paris Climate Accords

The Paris Agreement is an international treaty about climate change that was negotiated by 196 parties at the 2015 United Nations Climate Change Conference (COP21) near Paris, France. The premise of the agreement is that climate change is not to exceed 2°C above pre-industrial levels but really should be limited to 1.5°C. It’s the first legally binding agreement of its kind. The idea is to peak emissions as soon as possible to begin decreasing them thereafter.

Final takeaways

Net0 is an AI-first sustainability solution that streamlines emissions management so businesses need no external source to buy carbon credits or get involved in trading schemes. While it’s necessary to have knowledge about where your money is going and that the projects are getting done, it isn’t necessary to go further than Net0 to manage and offset your emissions.

Getting to net zero can seem complicated but it is simple to do with Net0’s AI-first sustainability solution. Book a call with us today and we’ll show you how easy it is to plan your reduction strategy, set lower targets every year with our simulator, and contribute to offsetting projects for the residual emissions on your journey.