The new report by Ceres, a nonprofit representing businesses and investors on climate issues, highlights the cost to taxpayers of subsidies for flood-prone properties and farmers’ crop insurance and other federal disaster aid and chides policymakers for inaction on climate change.
“Taxpayer costs from climate change are getting bigger and bigger. Last year’s extreme weather events alone cost every American more than $300 apiece, or $100 billion altogether – most of it to pay for federal crop, flood, wildfire and disaster relief,” said Ceres president Mindy Lubber.
“Yet, our public disaster relief and recovery programs have been slow to recognize that worsening climate impacts will drive up future losses to unsustainable levels. Instead of encouraging behavior that reduces risks from extreme weather events, these programs are encouraging behavior that increases these risks – such as agricultural practices that increase vulnerability to drought and new development in hurricane- and wildfire-prone areas.”
The report says taxpayers in hurricane-prone states like Florida and Texas are particularly vulnerable because many private insurers have withdrawn, leaving state-run insurance programs on the hook for insured losses from coastal storms. In the past 20 years, the total loss exposure of these state-run insurance plans has risen by 1,550 percent, from about $40 billion in 1990 to more than $600 billion in 2010, according to Ceres. “What’s most troubling about these trends is that so little is being done to control these costs,” said Lubber.
The report, “Inaction on Climate Change: The Cost to Taxpayers,” includes a number of recommendations:
Improving transparency and accounting of the costs of extreme weather events to disaster relief and recovery programs; Boosting research to understand how climate change will impact these programs; Requiring recipients of federal relief and recovery assistance to adopt more stringent building codes and prohibit development in vulnerable areas; Finding ways to increase the level of private insurance market participation to reduce pressure on government relief and recovery programs.
Today only about 50 percent of the damages in the U.S. caused by extreme weather events are privately insured, according to Ceres.
Want to learn more about Cere’s recommendations? The report can be found at: http://www.ceres.org/resources/reports/inaction-on-climate-change-the-cost-to-taxpayers/view.
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