Extreme Weather Events: Limiting Federal Fiscal Exposure and Increasing the Nation's Resilience (GAO-14-364T)

This report represents the testimony provided by Mark Gaffigan, the Managing Director of Natural Resources and Environment for the U.S. Government Accountability Office (GAO) before the Committee on Homeland Security and Governmental Affairs of the U.S. Senate. This testimony is based on reports the GAO issued from March 2007 to November 2013.

The GAO finds that climate-related impacts will result in increased fiscal exposures for the federal government from many areas, primarily in the role of (1) the insurer of property and crops vulnerable to climate impacts, (2) the provider of aid in response to disasters, (3) the owner or operator of extensive infrastructure such as defense facilities and federal property vulnerable to climate impacts, and (4) the provider of data and technical assistance to state and local governments responsible for managing the impacts of climate change on their activities.

The financial risks from two federal insurance programs - the National Flood Insurance Program administered by the Federal Emergency Management Agency (FEMA) and the Federal Crop Insurance Corporation (FCIC) - create a significant fiscal exposure. In 2012, the NFIP had property coverage of over $1.2 trillion and the FCIC had crop coverage of almost $120 billion. As of December 2013, FEMA's debt from flood insurance payments totaled about $24 billion. GAO is currently examining the extent to which private and federal insurance programs address risks from climate change.

The federal government does not fully budget for recovery activities after major disasters, thus creating a large fiscal exposure. GAO reported in 2012 that disaster declarations have increased to a record 98 in fiscal year 2011 compared with 65 in 2004. Over that period, FEMA obligated over $80 billion for disaster aid. GAO's past work recommended that FEMA address the federal fiscal exposure from disaster assistance.

The federal government owns and operates hundreds of thousands of facilities that a changing climate could affect. For example, in its 2010 Quadrennial Defense Review, the Department of Defense (DOD) recognized the risk to its facilities posed by climate change, noting that the department must assess the potential impacts and adapt. GAO plans to report later this year on DOD's management of climate change risks at over 500,000 defense facilities.

The federal government invests billions of dollars annually in infrastructure projects that state and local governments prioritize, such as roads and bridges. Total public spending on transportation and water infrastructure exceeds $300 billion annually, with about 25 percent coming from the federal government and the rest from state and local governments.

GAO's April 2013 report on infrastructure adaptation concluded that the federal government could help state and local efforts to increase their resilience by (1) improving access to and use of available climate-related information, (2) providing officials with improved access to local assistance, and (3) helping officials consider climate change in their planning processes.

Publication Date: February 12, 2014

Author or Affiliated User:

  • Mark Gaffigan

Related Organizations:

  • U.S. Government Accountability Office (GAO)

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Resource Category:

Resource Types:

  • Assessment

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