Climate Change is a Major Threat to U.S. Government Says GAO (Again)

Every two years since 1990, the U.S. Government Accountability Office (GAO) releases its High Risk List of federal programs and operations that pose a financial threat to the federal government. One major risk the GAO has been emphasizing since 2013, when it was first included in a high risk report, is climate change. In particular, GAO is concerned about the rising number and cost of natural disasters and the increasing reliance on federal assistance for disaster relief and recovery. The costs of natural disasters have spiked since Hurricane Katrina (federal authorities have spent $430 billion in disaster assistance since 2005—almost half a trillion dollars). As rising global temperatures exacerbate the severity of weather impacts, extensive mitigation and resilience measures are becoming a national imperative. Fortunately, the 2018 Disaster Recovery Reform Act (DRRA) will make it easier for the Administration to set aside funds for pre-disaster mitigation and help communities be better prepared for the next weather event. But there is still much to be done to reduce the government's exposure to climate risks.

The 2019 High Risk List flags the following federal programs and operations as particularly vulnerable to climate risks.

National Flood Insurance Program

The top climate-related risk on GAO's 2019 list was the financial viability of the National Flood Insurance Program (NFIP), which provides public flood insurance to households and businesses. As of September 2018, the program was about $21 billion in debt to the Treasury Department, despite Congress having canceled $16 billion of its debt to taxpayers in October 2017.

The Federal Emergency Management Agency (FEMA), which runs the National Flood Insurance Program, is tasked with maintaining affordable flood insurance rates, while keeping the program financially sound. Unfortunately, an emphasis on the affordability of rates has led to premiums that oftentimes do not reflect the full risk of loss, leading costs to be transferred from property owners to taxpayers.

GAO bases its risk assessment on five key criteria: Leadership Commitment, Capacity, Action Plan, Monitoring, and Demonstrated Progress. NFIP's ranking on all five criteria has not changed since 2017, when the last high risk list was released. To demonstrate progress, the GAO recommends that FEMA first complete implementation of the Biggert-Waters Flood Insurance Reform Act of 2012 as well as the Homeowner Flood Insurance Affordability Act of 2014. Complete implementation of these acts would represent significant reforms to the program. In addition, GAO has outlined six areas in which significant progress could be made through Congressional action: addressing the program’s current debt, removing legislative barriers that prevent FEMA from revising premium rates, addressing affordability, increasing consumer participation, removing barriers to private-sector involvement, and protecting the program's resilience efforts. The devastating March floods in the Midwest have only added urgency to these reforms.

Disaster Aid and Resilience

After the unprecedented 2017 hurricane season, during which Harvey, Irma, and Maria were three of the five costliest hurricanes ever to hit the United States, the fall of 2018 brought another flurry of debilitating blows with Hurricanes Florence and Michael, as well as the calamitous California wildfires. Such disasters, which cause billions of dollars in damage, are a major source of federal fiscal exposure. In its report, the Government Accountability Office recommends several measures that could reduce the government's exposure to disaster risk (many of these measures have already been recommended in past GAO reports).

The Disaster Recovery Reform Act is a step in the right direction, as it allows the President to set aside funds for pre-disaster mitigation. The Federal Emergency Management Agency has also drafted a National Mitigation Investment Strategy (NMIS), but it has not been finalized and it is too early to tell whether it will be effective. FEMA has yet to establish a mechanism to track the effectiveness of federal disaster resilience funding nationwide.

Federal Properties and Buildings

To put into perspective just how much risk the federal government faces, one must take into account the considerable amount of land and facilities the federal government owns and manages. The Department of Defense alone runs domestic and overseas infrastructure valued at about $1 trillion.

A great number of federal properties are under a direct threat from climate change, and some are already suffering. In North Carolina, Hurricane Florence ravaged Camp Lejeune and other Marine Corps facilities, causing damages estimated at $3.6 billion. Just a month later, Hurricane Michael devastated Tyndall Air Force Base in Florida, causing an estimated $3 billion in damages. Though climate change does not cause hurricanes, it does make them more likely, and more powerful (a warmer atmosphere contains more energy and can hold more water vapor).

One GAO recommendation is to reinstate Executive Order 13690, which had established a federal flood risk management standard to make federal assets more resilient to flooding (for instance, new federal buildings in floodplains would have had to meet a minimum elevation level).

Technical Assistance to Federal, State Local, and Private-Sector Decision Makers

In addition to managing its own properties, the federal government plays a critical role in funding infrastructure investments that are planned and built by state and local authorities. Such authorities usually do not have the resources to properly evaluate climate change risks, and rely on the federal government's assistance and guidance. It's in the government's own interest to provide such assistance, since its funds are at risk (infrastructure that has been funded—in whole or in part—by the federal government is usually federally insured or eligible for federal disaster assistance). Unfortunately, of the five recommendations made by the Government Accountability Office, three have still not been met and two have actually regressed, from "partially met" to "not met."

The Government Accountability Office has called on the federal government to lead by example, by developing and implementing a National Climate Strategic Plan. Unfortunately, several executive orders that moved in that direction and would have helped the United States become more resilient to the impacts of climate change have been revoked by the current Administration.

Of the 62 GAO recommendations related to climate change risks (including 12 new ones in the 2019 report), 25 (or about 40 percent) have yet to be fully met. In several cases, the government has actually regressed since the 2017 High Risk List.

Author: C.J. Greco