By Karen Savage
Federal programs intended to aid U.S. residents harmed by floods, crop failures and other disasters are not prepared for likely widespread climate damages, an economic expert told Congress on Thursday.
“These are growing federal fiscal exposures that the federal government faces and they’re unsustainable,” said Alfredo Gomez, director of the Natural Resources and Environment team in the Government Accountability Office.
The hearing, which focused on current and future economic impacts, was the fourth in a series on climate change held by the House Committee on Oversight and Reform’s Environment Subcommittee. The goal of this phase of the hearings is to help lawmakers and the public understand how climate change is currently impacting the nation and how to better prepare for future impacts.
“We have already had hearings where testimony and evidence was provided showing that Shell and Exxon knew in the late 70s and early 80s about the impact the extensive burning of fossil fuels would have on CO2 emissions and the impact on the environment as well as climate change and more severe weather events,” said Rep. Harley E. Rouda (D-Calif.), chair of the committee.
The nation is already feeling the economic effects of climate change and future impacts will likely be both significant and unevenly distributed, Gomez told the committee.
“For example, the Southeast, Midwest and Great Plains regions will likely experience greater combined economic effects largely because of coastal property damages in the southeast and changes in crop yields in the other two regions,” Gomez said, adding that the federal government must prioritize managing climate change risks in order to soften their financial impact.
While future damage estimates are imprecise, Gomez said because property and crops are vulnerable, the National Flood Insurance Program and the Federal Crop Insurance Corporation are both facing increased financial risk.
Programs to elevate homes, strengthening building codes and the passage of the Disaster Recovery Reform Act of 2018 have helped the federal government become more resilient, Gomez said, but what’s needed is a clear focus and better coordination of efforts.
“The federal government has made limited investments, however it does not have a strategic approach for investing in climate resilience projects,” Gomez said. “No one is in charge when it comes to identifying and prioritizing climate resilience projects across the federal government.”
California wildfire victims must remain insured, Dave Jones, former California insurance commissioner and senior director for environmental risk at The Nature Conservancy, told the subcommittee.
Wildfires resulted in $12 billion in insurance losses in 2017 and $13 billion in losses during 2018. Insurance companies have raised premiums and often exclude or limit coverage in areas where wildfire risk is high.
Jones said it is important that the federal government and insurance companies work together to make insurance accessible for California residents, but that alone won’t eliminate future risk.
“More fundamentally, it is the underlying drivers of these risks that need to be addressed,” Jones said.
Ultimately, the only way to reduce future risk is to provide incentives to reduce greenhouse gas emissions said Dr. Michael Greenstone, Milton Friedman distinguished service professor in economics at the University of Chicago.
“The surest way to achieve inexpensive reductions today is to price CO2 emissions with a carbon tax or by implementing a cap and trade program,” Greenstone said.
Greenstone said passing the current bill to implement a carbon tax of around $50 per ton will be a good first step.
“As we learn more, the 50 is going to look a little small and we’re going to need to have space to increase that,” Greenstone said.
Exxon has known for decades that a carbon tax would have to be at least $75 per ton to be effective in combating climate change and newly released research indicates that figure could be as high as $200 per ton.
“The most important thing is getting it above zero, which it is right now,” Greenstone said. “There’s very little innovation in response to no market. Until there’s a price signal, I think we’re just hoping for the best in terms of innovation.”
Stephen Benjamin, mayor of Columbia, S.C., and the president of the U.S. Conference of Mayors, said for many cities and municipalities, climate change is more than a policy discussion, it is a matter of survival.
The remnants of Hurricane Joaquin dumped nearly 30 inches of rain on Columbia in 2015, causing wide-spread catastrophic flooding to city infrastructure and damaging nearly 400 homes and 60 businesses.
“Mayors and cities have been pragmatic because we have no choice. Climate change is already impacting our communities and testing our infrastructure,” Benjamin said.
Future subcommittee hearings will continue to examine current impacts and will examine different future climate change scenarios, one “nirvana” and one “apocalyptic,” Rouda said, making sure lawmakers and the public can make informed decisions.
“Knowing that if we do nothing what type of a world we will be leaving for our children, our grandchildren and future generations. On the other hand, if we do take action now, how we can dramatically impact what our world will look like for future generations – knowing also that even if we take dramatic action now, there’s going to be impact from climate change that we can’t stop immediately, that we are going to experience negative consequences for our past inaction.”