It’s time to reduce taxpayer burdens from natural disasters
WASHINGTON (March 17, 2021)—The value of coastal property continues to rise despite the increasing risk from extreme weather events. The current annual economic impact from hurricanes and storm-related flooding is $54 billion, $17 billion of which are direct costs to the federal government. But due to the combination of increasing coastal wealth and climate change’s intensification of extreme weather events, costs will continue rising. Prudent policy should dictate that the federal government revisit its coastal resilience efforts and identify opportunities to mitigate the cost and suffering inflicted by natural disasters.
In a new policy study from R Street and C3 Solutions, R Street’s senior fellow for energy and environment Philip Rossetti examines the failing National Flood Insurance Program (NFIP) and how climate change is rapidly increasing natural disasters in flood-prone areas.
“Ultimately, the combination of rising coastal property value and the impacts from climate change means we can expect the damage from future storms and floods to increase. As taxpayers shoulder significant burdens from disasters, emphasis should be placed on government accountability that allocates resources efficiently to mitigate long-term risk,” said Rossetti.
“Our study shows that more people are at risk of flooding than ever before. Congress needs to act now to reform this costly and ineffective program and encourage private sector solutions before costs increase even further,” said Drew Bond of C3 Solutions.
The R Street Institute and C3 Solutions recommend several policy changes, with the aim of mitigating the costs and harm that result from natural disasters, including:
- End NFIP subsidies and grandfathered rates for new construction in high-hazard areas.
- When possible, transfer risk to the private insurance markets that are better equipped to mitigate risk.
- Update flood maps to better identify risk.
- Consider how urban development exacerbates flood risk by creating impermeable surfaces and reducing groundwater absorption potential.
- Where reasonable, consider if natural systems can more efficiently mitigate risk than artificial ones.
- Designate project coordination to a single entity to more efficiently allocate the considerable resources already invested by the federal government in resilience.
Read the full policy study here.
