Economic impacts could help feds identify climate risks: GAOReprints
The U.S. federal government should use information on the potential economic effects of climate change to help identify significant climate risks and craft appropriate federal responses as these costs — already in the billions — are expected to continue to climb, according to the U.S. Government Accountability Office.
Extreme weather and fire events have cost the federal government over $350 billion over the past decade, including $90 billion for crop and flood insurance, according to the Office of Management and Budget.
“Climate change impacts are already costing the federal government money and these costs will likely increase over time as the climate continues to change,” the GAO said in a report published on Tuesday.
“Even though existing information on the potential economic effects of climate change … is imprecise, it could help identify significant potential damages for federal decision makers — an initial step in the process for managing climate risks.”
In February 2013, GAO included limiting the federal government’s fiscal exposure by better managing climate change risks on its high-risk list after identifying several areas in which the federal government faces fiscal exposure from these risks, including its role as the owner and operator of extensive infrastructure and federal property vulnerable to climate impacts, the insurer of property and crops vulnerable to climate impacts, and the provider of disaster aid.
The GAO has now recommended that the appropriate entities within the Executive Office of the President, including the Office of Science and Technology Policy, use information on potential economic effects to identify and respond to climate risks.
“Under the National Academies’ 2010 leading practices, climate change risk management efforts need to be focused on where immediate attention is needed and by prioritizing federal climate risk management activities well, the federal government can help to minimize negative impacts and maximize opportunities associated with climate change,” the GAO said. “By using information on the potential economic effects of climate change to help identify significant climate risks and craft appropriate federal responses, such as establishing a strategy to guide federal investment to enhance resilience against future disasters, the federal government could take an initial step in establishing government-wide priorities to manage significant climate risks. To help prioritize and guide federal investments, such a strategy could include developing more comprehensive information on the potential benefits and costs of different adaptation options.”
Existing research indicates that infrastructure in coastal areas faces high financial risks relative to the risks posed to many other sectors or geographic regions, according to several experts interviewed by the GAO. In addition, projections about adverse economic effects in coastal areas, when considered with other information including disaster costs already incurred such as the roughly $50 billion appropriated for Superstorm Sandy recovery, could help decisionmakers better understand the potential magnitude of risks to coastal areas and identify vulnerable coastal infrastructure as a source of potentially high fiscal exposure, according to some experts.
“Such a first step in risk assessment is consistent with leading practices for climate risk management and federal standards for internal control,” the GAO said.