GAO "High-Risk Series" Report Identifies Climate Change as a Key Risk to Government Programs
In its biennial high-risk series reports, the Government Accountability Office (“GAO”) identifies government programs and operations that are potentially vulnerable to a variety of risks and makes recommendations for mitigating those risks. In 2013, GAO added “Limiting the Federal Government’s Fiscal Exposure by Better Managing Climate Change Risks” to its high-risk list. Last week, GAO released “High-Risk Series: An Update” (“2015 Report”). Although the 2015 Report acknowledges some progress in managing climate change risks, it concludes that climate change continues to present significant financial risk to the federal government.
According to GAO, although many Federal climate-related efforts are underway, a number of overarching strategic challenges persist. For example, in November 2013, the President issued Executive Order 13653 on “Preparing the United States for the Impacts of Climate Change,” in response to which, agencies developed climate change adaptation plans to evaluate the most significant climate change related risks to agency operations and objectives. However, according to the 2015 Report, most of the agencies have yet to implement many aspects of their plans, and it remains unclear how the diverse plans across agencies will relate to one another. The 2015 Report also indicates that many existing efforts fail to clearly define the roles and responsibilities of the various federal, state, local, and private-sector actors involved.
The 2015 Report also states that programs to monitor the effectiveness and sustainability of existing efforts are lacking. For example, public insurers have taken steps to mitigate the fiscal risk to federal insurance programs, such as the National Flood Insurance Program: they have commissioned climate change studies in order to better understand and prepare for the potential impacts of climate change on federal insurance programs; FEMA is working to phase out subsidies for flood insurance that create inaccurate price signals; and FEMA is planning to incorporate some projected effects of climate change, such as sea level rise and erosion into its flood maps. However, there is no system in place to monitor and verify the effectiveness of these efforts. According to GAO, to create sustainable programs with lasting high-level support, implementing programs to track and monitor progress will be crucial.
In addition to these overarching challenges, the 2015 Report also identifies specific areas requiring improvement, including:
- Federal property and resources.
The federal government owns and operates thousands of facilities and manages nearly 30 percent of the land in the United States. The 2015 Report notes that these resources are potentially vulnerable to climate change impacts. For example, NASA's real property holdings include more than 5,000 buildings and other structures, many of which are located in coastal areas. According to GAO, such facilities are potentially vulnerable to sea level rise and erosion, among other potential impacts, while other federal land is potentially vulnerable to severe drought and wildfires. To mitigate risk to federal property and resources, the Report urges the federal government to better incorporate climate change information into infrastructure planning processes and documents, such as technical guidelines and design standards and National Environmental Policy Act (“NEPA”) planning documents.
In general, professional associations, rather than federal agencies, develop technical guidelines and design standards to ensure the safety and reliability of infrastructure. These sorts of design standards determine how different elements are incorporated in the planning process and project-level design. However, because they often fail to account for climate change impacts, GAO recommends that agencies, such as the Department of Transportation and the Environmental Protection Agency, work with professional associations to incorporate climate change information into design standards.
GAO also recommends that the Council on Environmental Quality (“CEQ”) and other relevant actors work to determine how to incorporate climate change considerations into NEPA analysis for proposed federal actions, such as infrastructure projects. On February 18, 2010, CEQ issued draft guidance on incorporating climate change impacts into NEPA analysis. Rather than finalize the guidance, CEQ issued a “Revised Draft Guidance on the Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in NEPA Reviews” in December 2014. The 2015 Report urges CEQ to finalize the guidance so that agencies can begin to consistently consider climate change when implementing NEPA.
- Federal disaster aid.
According to the 2015 Report, “multiple factors, including increased disaster declarations, climate change effects, and changing development patterns” increase the federal government’s financial exposure in its role as provider of disaster aid. According to the Report, the problem stems in part from difficulty (and inconsistency) in determining which disaster-preparation and -response costs should be borne by federal, state, or local governments, and which costs should be borne by the private sector. Consequently, GAO recommends that FEMA develop a procedure to more accurately assess a jurisdiction’s capacity to respond to a disaster on its own. GAO also recommends that FEMA study past events to improve upon disaster cost estimates going forward.
- Federal flood and crop insurance programs.
The Report highlights the considerable financial risks to the National Flood Insurance Program and the United States Department of Agriculture's Federal Crop Insurance Corporation. The Report suggests that financial risk to the programs stems in part from the fact that the agencies responsible for the programs have not incorporated climate change impacts into their risk-management practices. For example, they have done little to analyze the potential impact of increasingly frequent and severe weather-related events on their programs. As such, GAO emphasizes the need to develop the resources and information needed to better understand and manage the programs’ exposure to climate change, noting for example that projected impacts of climate change, such as sea level rise, need to be incorporated into updated flood maps.
Additionally, premium subsidies mean many federal crop insurance policyholders do not receive accurate price signals or bear the true risk of loss associated with weather-related events. This, in turn, could impact farming decisions. GAO recommends that the Secretary of Agriculture direct the federal crop insurance program to work with experts to develop guidance on resilient agricultural practices.
The 2015 Report touches on a broad range of risks posed by climate change. And although the Report makes numerous program-specific recommendations, the 2015 Report repeatedly emphasized the need for: (1) more-effective coordination across agencies and different levels of government, as well as between the public and private sectors; (2) incorporation of climate change data into planning and development processes; and (3) programs to monitor and track progress.