The federal government, unlike the private insurance industry, is constrained by federal statutes in its capacity to incorporate climate change preparedness strategies into disaster relief and funding decisions. To date, U.S. domestic disaster relief spending for fiscal year 2011 exceeds $32 billion. On July 28, the Senate Appropriations Subcommittee on Financial Services and General Government heard testimony from witnesses representing both government and the private sector on the current state of U.S. climate adaptation policy and whether the government is capable of preparing for potential increased weather-related natural disasters and relief spending.
Post by Jamal Knight and Rick Piltz
The need for climate change adaptive preparedness policy is not new. It remains a politically divisive issue, and our lack of a cohesive national policy to address the adverse economic, financial, and environmental impacts of climate change are evidenced by decades of Congressional and Executive inaction.
The need for U.S. climate change preparedness policy was formalized back in 1998 with the Federal Emergency Management Administration’s (FEMA) “Project Impact” Initiative. In June 1998, then FEMA Director, James Witt remarked, “Our weather is getting worse. The number of storms have increased, and the storms have become more unpredictable and they’ve become more destructive. Scientists warn that this trend could intensify as a result of global warming. We have seen weather patterns change. Now instead of 50 year floods or 100 year floods, we are getting 300 and 500 year floods.”
The Project Impact Initiative was FEMA’s response to record disaster costs and predictions of exponential increases in disaster relief spending in the coming decades. According to Mr. Witt in 1998, “the events we are having now are much larger and much more devastating. That has driven the disaster costs up. That is the part – the prevention side of it – that we need to change. I don’t think you have to take an anti-development stance. I think you have to use a little bit of common sense.”
Now, more than a decade after Mr. Witt’s observations, and FEMA’ Initiative – a decade that has seen failure to follow through by the Bush-Cheney administration, massive reorganization at FEMA, oversight abuses, and failures to respond effectively with domestic disaster relief – Chairman Richard Durbin (D-Illinois) of the Senate Appropriations Subcommittee questioned witnesses about the lack of effective federal policies for addressing and adapting to climate change, at a hearing titled “Federal Disaster Assistance Budgeting: Are We Weather ready?”
The private insurance sector has responded to weather-related disasters, which are in part a result of changing climate. The industry, through risk-based premiums, has in a number of instances decided to deny or not re-issue coverage. Because profits are the bottom line, the industry, as noted by Chairman Durbin, must assess the potential economic and financial impacts of climate change and increased disasters, because a failure to do that could put them out of business.
David Trimble, Natural Resources and Environment Director for the Government Accountability Office, stated that the federal government, unlike the private insurance industry, is constrained by federal statutes in its capacity to incorporate climate change preparedness strategies into disaster relief and funding decisions.
The practice for determining the amount of disaster relief in the budget has used a federally mandated methodology. Essentially, it consists of a rolling average of the disaster spending in the previous ten years, excluding the highest and lowest amounts from the analysis.
Frank Nutter, President of the Reinsurance Association of America, expressed concerns with the government’s methodology for assessing future spending on disaster relief. “The insurance industry learned a long time ago that the [government’s] system was not adequate,” said Mr. Nutter. “You can’t take past events and overlay it on probabilistic models. Federal budgets have not set aside adequate resources for disaster relief.” Mr. Nutter said this was a sign of poor preparedness at a time when weather-related disasters are expected to further increase.
Chairman Durbin noted that taxpayers and the public at large would benefit if the federal government were better able to gauge, monitor, and predict future disaster spending costs – and more so, if the government would take additional steps to prepare itself as costs continue to rise. Federal disaster response appropriations have been unpredictable and add to the budget deficit.
April 2011 ranks as the most active tornado month on record with 875 tornadoes, which stands well above the previous record of 542 set in 2003. The U.S. has sustained eight different billion dollar disasters already this year, and we are less than half-way through the hurricane season. The record for billion dollar disasters in a single year is nine.
Amid the current climate of fiscal uncertainty, the costs of U.S. lack of preparedness for global climate disruption and weather-related disasters are becoming a burden that the government will find it increasingly difficult to carry. Accordingly, coherent adaptation policies must be adopted that allow for better monitoring and prediction of weather- related events, and for developing greater resilience to disaster-related impacts, to ensure the necessary protections for Americans. Record drought, flooding, and wildfires are having real and significant consequences. A lack of preparedness at the federal level is simply not an acceptable option.
Hearing webcast: “Federal Disaster Assistance Budgeting: Are We Weather ready?” hearing webcast, July 28.
Written testimony of David C. Trimble, Director, Natural Resources and Environment, Government Accountability Office
Written testimony of Dr. Kathryn D. Sullivan, Deputy Administrator, National Oceanic and Atmospheric Administration