By Clay Dillow
June 25, 2013

FORTUNE — When Hurricane Sandy slammed into New York City last October, city planners knew they weren’t just looking at a freak natural occurrence — they were looking at the future. Thanks to an unfortunate coincidence of very high tides that were nearly peaking when Sandy struck, sea levels were slightly higher than average when the storm came ashore, a circumstance that not only exacerbated flooding and damage but also provided a glimpse of what it looks like when two of the predicted effects of global climate change — increased incidence of severe weather and rising sea levels — work in tandem. The result was not pretty.

“To me resiliency is a couple of days, tops,” says Richard Cavallaro, president of civil engineering and construction outfit Skansa USA Civil Inc., invoking the term engineers commonly use to describe a city’s ability to bounce back from a disaster. “Being down seven or eight days — people didn’t have power, no gasoline — these are things that just can’t be. I would say our resiliency was not good.”

Earlier this month, New York City Mayor Michael Bloomberg strode to the podium at the Brooklyn Navy Yard and announced an ambitious $20 billion plan to shore up NYC’s coastal defenses, not only against severe storms like Sandy but against climate change itself — chiefly from rising sea levels, which his office believes could rise four to eight inches by the 2020s, putting hundreds of thousands more residents in the 100-year flood plain. Through a series of engineering solutions — enhanced dune systems along front-line beaches, restoration of natural wetlands for water retention, a series of surge and tidal barriers, levees, bulkheads, and floodwalls, and even a new, built-from-scratch elevated neighborhood similar to Battery Park City in the Lower East Side — the administration is ready to wager billions on the idea that it can engineer its way around climate change and keep the encroaching Atlantic at bay.

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Globally speaking, Bloomberg is not alone. Cities and nations around the world are rapidly coming to grips with the fact that regardless of how one feels about the source of climate change, data show that sea levels are on the rise at an accelerating rate. Meanwhile, global insurance industry group the Geneva Association warned this week that warming oceans are making some coastal regions — including parts of the U.K. and the U.S. — “uninsurable” by industry standards, and that the number of cities meeting that criteria will likely grow as sea levels rise and oceans continue to warm. Resiliency is quickly becoming a requirement for 21st centuries cities, and one that many major global hubs — packed with aging infrastructure laid down in the 20th, 19th, and even 18th centuries — sorely lack.

All of this makes Bloomberg’s plan quite audacious even as the cost of doing nothing could easily eclipse his $20 billion price tag (some estimates say NYC lost more than $1 billion per day in economic activity during the post-Sandy blackouts). There are several cities around the world doing many smart things where resiliency is concerned, Cavallaro says, but there’s no single city that has an ideal, integrated system for managing the risks of sea level rise, extreme weather, and flooding. Now on the downslope of its tenure, the Bloomberg administration appears eager to create such a system for New York, and Sandy has brought enough attention (and federal funds) to the problem to make it a political reality.

The same is true elsewhere in the world, and the growing consensus — largely spawned by a spate of intense natural disasters over the past decade — that governments need to get more involved in mitigating threats related to climate change is giving rise to a new kind of extreme civil engineering and architecture that is well-positioned for a global boom as cities and states attempt to bolster their own resiliency in the face of rising sea levels and increased severe weather activity. Projections indicate that resiliency construction could very well be its own industry worth hundreds of billions of dollars by the end of the decade.

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As if on cue, a number of design competitions have sprung up in the past few months asking for “extreme weather architecture” solutions that could become the new standard for communities building in disaster-prone regions. The U.S. Department of Housing and Urban Development launched a broad initiative on June 20 titled Rebuild by Design seeking novel ideas for resilient building designs and infrastructure specifically tailored for the areas most devastated by Sandy. Designing Recovery, launched by the American Institute of Architects, asks engineers to concept more resilient residential solutions for three specific areas: Joplin, Mo., New Orleans, La., and Queens, N.Y. And 3C for (Comprehensive Coastal Communities) asks a simple yet tricky design question: How do you rebuild a neighborhood several feet higher than it was before without making it ugly?

Integrating these kinds of new solutions with tested civil engineering flood mitigation practices will be New York City’s challenge as it strives to prove that with enough investment and thoughtful planning, cities really can engineer their way around rising sea levels and other climate change-related threats. And, being the first major civic infrastructure overhaul of this magnitude aimed specifically at enhancing the resiliency of a major urban area with respect to climate change, other cities around the globe will be watching to see how New York manages the politics and implementation of such a vast and complex new system — and whether the investment pays off.

“There’s going to be some tough choices to make,” Cavallaro says. “At some point you’re going to protect certain areas probably to the chagrin of other areas. But we’re finally going to put some money ahead of the damage. I believe that a little bit of money up front will save a lot money when storms hit.”

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