WASHINGTON, DC – Congressional inaction on climate change is likely to increase costs to taxpayers for the federal flood and crop insurance programs according to a Government Accountability Office (GAO) report requested by a group of lawmakers including Senators Jack Reed (D-RI) and Sheldon Whitehouse (D-RI). The report concluded that, if left unchecked, climate change and related increases in the frequency and severity of extreme weather will likely greatly increase insured and uninsured financial losses across the country.
Reed and Whitehouse requested the report along with their colleagues Tom Harkin (D-IA), Michael Bennet (D-CO), Tom Udall (D-NM), and Representative Peter DeFazio (D-OR).
“From rising sea levels and coastal erosion to devastating floods caused by historic storms, climate change is having a tangible impact on Rhode Island’s communities. Today’s GAO report provides further evidence that climate change is compounding the risks and costs to individuals and society, not only threatening our environment but our economy, as well. It’s a reminder that we must begin to meet the challenge of climate change without delay,” said Senator Reed.
“Climate change is loading the dice in favor of severe weather, and that puts property and crops at risk all over the country,” said Senator Whitehouse. “In Rhode Island in 2010, we experienced historic flooding that cost the state over $200 million in damage to our homes, businesses, and infrastructure. We need to prepare for catastrophes like the 2010 floods and account for the costs severe weather could impose on important federal programs like flood and crop insurance. It’s time to wake up to the effects of climate change, including the effects on our nation’s finances.”
The report finds that between 2007 and 2013, the risk to taxpayers through the federal flood and crop insurance programs has increased 8 percent to $1.4 trillion and is likely to increase dramatically in the future.
Climate disruptions to agriculture, including drought, flooding, and elevated temperatures, have also increased over the last 40 years and are expected to increase in frequency and severity over the next 25 years. At the U.S. Department of Agriculture, costs to taxpayers for the federal crop insurance program have increased 68 percent since 2007, and actual costs for subsidies and losses have more than doubled since 2001, reaching $7.6 billion in 2012. The expected rise in temperatures and changes in precipitation could substantially increase the risk to taxpayers through the federal crop insurance program.
FEMA is already $24 billion in debt due to extreme weather events like Superstorm Sandy that wreaked havoc along the Eastern seaboard. Additionally, the GAO in 2006 labeled the National Flood Insurance Program as “high risk” for long-term insolvency. According to GAO, hurricane-related fiscal losses due to increased storm severity and climate change could increase up to 50 percent by 2040 and 110 percent by 2100.
The GAO made two recommendations for FEMA and USDA to better manage the risk to taxpayers:
- FEMA should update building standards for floodplain management, including additional flood-proofing for resilience to sea-level rise and extreme weather events.
- USDA should incorporate climate change resilient agricultural practices into their “good farming practices” guidance, such as conservation tillage, water conservation, and modified crop planting dates to sustain long-term production in a changing climate.
In addition to the guidance from the GAO to help address the sustainability of the insurance programs, the lawmakers believe Congress must act to address the underlying problem – climate change – to tackle the immediate and long-term risks to taxpayers.
Click here to download the full report.