Climate change puts communities around the world at increasing risk of catastrophic climate disasters. Last year, the floods caused by Storm Daniel wiped out entire villages in central Greece and then devastated the Libyan city of Derna within a span of a week. More recently, Spain witnessed Europe’s deadliest flash floods in at least half a century, reminding us that the impacts of climate change are here to stay.

In the short term, rescue authorities are looking for survivors, and residents are asked to wait for the immediate dangers to go away. When the dust settles, however, the challenges are different. As cities and communities are faced with unprecedented damage to infrastructure, and businesses struggle to reopen, the question is how to ensure economic recovery from such catastrophic events.

A recently published article grapples with this question and with the long-term implications of catastrophic climate disasters. Inspired by the use of narrative scenarios—storylines that depict ‘plausible accounts’ of the future—in environmental science and policy planning, researchers from the University of Amsterdam developed a scenario of a catastrophic flood hitting the Dutch coast. The lessons that emerge are relevant not just for the Netherlands but also for policymakers and disaster planning authorities around the world.

A scenario of a catastrophic flood

In research, narratives are conventionally used to understand the physical risks of climate change. Our research used them to anticipate the reactions of private companies to a major flooding disaster, and how these reactions would affect the future of cities. The researchers first built predictions for how companies would react to a mega-disaster taking place in the Netherlands, and used a narrative scenario to place these predictions in context. To develop the scenario, they relied on multiple data sources and accounts from real floods, such as the 1953 North sea flood in Zealand that took the lives of nearly 2,000 people as well as flooding disasters in other locations around the world, where sufficient time passed to observe long-term developments, such as New Orleans.

The study found that companies’ reactions rest largely on the sensemaking of the disaster situation by managers and employees. Specifically, on how they make sense of time and place, their (actualized and potential) losses, and the chances of recovery. Because companies draw on different and often idiosyncratic experiences, identities, resources and capabilities, they vary markedly in how to make sense of and respond to new situations. In the scenario depicted in the study, many firms ‘freeze’ in the wake of the disaster. Others quickly reopen and ‘fight’ back. And yet other firms ‘flee’ and set up shop elsewhere.

This difference matters, because how companies react in these extreme contexts could affect how well their communities recover. In our scenario, differences in companies’ initial reactions to the catastrophic flood result in important differences in long-term community resilience. This is compounded by companies’ tendency to observe other – typically larger and more prominent – companies in the face of uncertainty. As a result of these dynamics, some communities bounce back from climate disasters while others never fully recover.

Lessons for policy-makers

To varying extents, city governments have started to prepare for the potential risks associated with interrelated climate change trends such as sea-level rise, higher river discharges, and extreme weather. One part of the preparation efforts involves investments into building and strengthening locks, dikes, dams and sluices. At times it may include giving up land areas to the sea to make it more manageable to ‘live with the water’ by relocating in neighboring cities and towns.

As well as preventative measures such as these, it is also important for them to consider adaptation efforts after such unthinkable events take place. Authorities need to consider how communities can bounce back, but many public scenarios and policy documents on crisis management ignore the critical role of companies in responding to disasters or rely on unrealistic assumptions about how managers make decisions in extreme contexts. Research suggests that it is critical to infuse policy scenarios with more accurate depictions of companies’ decisions to stay or leave a disaster-hit location, and of how interactions between companies can trigger city recovery or retreat.

Infusing policy scenarios with more accurate depictions of firms’ reactions can help municipalities better prepare for the future consequences of climate change. It may also help them proactively influence companies’ reactions, and eventually the chances of community recovery.

A wider policy implication of this study relates to climate change communication. Fictional narratives can shape public discourse and policy because, in contrast to facts, stories heighten affective processing and increase the chances that people will take action.

Further, public authorities’ plans for post-disaster communication are often delimited to communication to private citizens. Feeding in to discussions about how to account for non-governmental actors in climate policy and crisis planning, this research suggests that targeting private companies is paramount, as their reactions may lead recovery efforts to spiral in different directions.