Taxpayers Get Nearly $100 Billion Bill for 2012 Extreme Weather, Equivalent to One-Sixth of Non-Defense Discretionary Spending

Dan Lashof, Program Director, Climate & Clean Air, Washington, D.C.

With all the debate on the federal budget in Congress, climate change rarely gets mentioned as a deficit driver. Yet dealing with climate disruption was one of the largest non-defense discretionary budget items in 2012. Indeed, as NRDC shows in Who Pays for Climate Change?, when all federal spending on last year's droughts, storms, floods, and forest fires are added up, the U.S. Climate Disruption Budget was nearly $100 billion, equivalent to 16% of total non-defense discretionary spending in the federal budget-larger than any official spending category.

2012 U.S. Federal Non-Defense Discretionary Budget (in Billions)
Source CRS, BEA, OMB (Table 8.7), NRDC estimates
Education, training, employment and social services	$95
Transportation	$91
Housing assistance and other income security	$65
Health	$60
Veterans benefits and services	$57
Administration of Justice	$54
International Affairs	$50
Natural Resources and Environment	$40
Science, Space and Technology	$29
Energy	$13
Other Non-Defense Discretionary	$61
Total FY2012 Non-Defense Discretionary Spending	$616
Federal Climate Disruption Costs, CY2012 Impacts	$96

That means that federal spending to deal with extreme weather made worse by climate change far exceeded total spending aimed at solving the problem. In fact, it was eight times EPA's total budget and eight times total spending on energy.

Overall the insurance industry estimates that 2012 was the second costliest year in U.S. history for climate-related disasters, with over $139 billion in damages. But private insurers themselves only covered about 25% of these costs ($33 billion), leaving the federal government and its public insurance enterprises to pay for the majority of the remaining claims. As a result, the U.S. government paid more than three times as much as private insurers did for climate-related disasters in 2012.

That reflects a major shift in liabilities with respect to climate change away from private insurers to public alternatives that began in earnest following the $72 billion hit the industry took in 2005 from hurricane Katrina.

Federal spending related to climate disruption falls into two major categories: Storms and droughts.

Spending related to storms includes appropriated funds for the Federal Emergency Management Agency (FEMA) as well as emergency supplemental appropriations following major disasters, such as Superstorm Sandy. It also includes the National Flood Insurance Program, which is supposed to be self-supporting, but is increasingly under water.

Drought-related spending includes the federal crop insurance program as well as the government's share of higher food costs (see this post for more details).

The figure below shows how the federal climate disruption budget breaks down.

While some of these federal programs-such as forest fire prevention, crop insurance, flood coverage, and disaster preparedness-offer wider benefits to the country, it should be noted that these liabilities have largely been assumed by the public sector due to a lack of private sector alternatives. The true scorekeepers of climate risk-the insurance industry-realizes it can't win when the dice are increasingly loaded with carbon pollution, so it's walking away from the table, leaving taxpayers holding the bag. Last year that cost amounted to over $1100 per taxpayer, and we can expect to see even higher costs in future as CO2 concentrations continue to soar past 400 parts per million.

Even as the budget to clean up climate disruptions hit a record high in 2012 and is expected to continue to grow, the budget for programs to fight climate disruption-such as environmental enforcement, energy efficiency, clean energy vehicle research, and ARPA-E-suffered cuts of more than $100 million the "sequester" that went into effect in March and remain under continued pressure from the budget-cutting process.

Our climate plan is, in effect, to cut critical investments now for the sake of small short-term deficit reductions and send our children the tax bills to clean up the mess.

That's colossally short-sighted, even by Washington standards.

http://switchboard.nrdc.org/blogs/dlashof/post.htm

President Obama Vows Action on Climate; Latino Groups Support Swift Action

Adrianna Quintero, Senior Attorney, Director, La Onda Verde de NRDC, San Francisco

In his second inaugural speech yesterday, President Obama presented his vision for the future of our country, calling on us to seize the moment and highlighting the strength of our country's diversity. For Latinos across the nation there was much to cheer for, and much to hope for.

Answering the concerns of so many families, the President affirmed his commitment to ease the path to citizenship for immigrants, improve outdated education programs, and create greater equality in our workforce. And in a bold pledge to protect the health of our families and communities, President Obama declared that his administration would work to address climate change--a commitment strongly supported by Latinos nationwide.

With communities still recovering from the flooding and devastation left by Hurricane Sandy, the President's call for action to curb climate change could not come soon enough. 2012 saw thousands of records broken in the U.S. for heat, rain, and snow across the country, with American families suffering the consequences. From devastating droughts in the Midwest that ruined crops and the livelihoods of American farmers, to violent storms that left thousands without power or water along the East Coast, 2012 proved to be a shockingly dangerous--and deadly--year of extreme weather events.

Ready or not, our climate is changing, and we're witnessing the consequences in our backyard. The National Oceanic and Atmospheric Administration reported that 2012 was the hottest year ever recorded in the continental United States. A warmer climate fuels more heat waves, downpours, floods, fires, and other extreme weather events--just what we've seen across the country over the past few years.

The President got it right when he stated that we will all be affected by a changing climate. As the President stated, "Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms."

We can't afford to wait any longer. That's why leading Latino groups, along with small business owners and environmental organizations, are urging President Obama to act quickly to address the growing climate threat. In a new letter to the President, Voces Verdes, the National Hispanic Medical Association, the League of United Latin American Citizens (LULAC), and over a dozen other leading Latino organizations, called on President Obama to curb harmful carbon pollution from existing coal-fired power plants.

The President has already acted to reduce pollution from new power plants. But we can't stop there. Coal-fired power plants are the nation's largest source of global warming pollution. Implementing new standards for existing power plants will put us on a path toward climate stability, unleash investment in new clean energy technologies, and help stem the devastating storms, droughts, and floods worsened by climate change. And, even while Congress remains gridlocked, the President can act now to implement these new standards, using the authority already given to the Environmental Protection Agency (EPA) to clean up our air.

For Latino communities, action on climate change now means a healthier and more prosperous future for our children. Half of all U.S. Latinos live in places where air pollution often makes the air unsafe to breathe. Cutting pollution from existing power plants will not only clean up the air in communities near the plants, but will also help reduce the health impacts of climate change--like increased asthma attacks that come with warmer air. And with unemployment still hovering around 10% for Latinos, jobs in areas like construction, home weatherization, solar panel installation, and energy efficiency retrofits, will help get our workers back on their feet.

President Obama faces a long, difficult road in his second term, but his commitment to confront climate change could be a defining part of his legacy. The President has the opportunity now to drive global action on climate change, showing that we are committed to creating a healthier environment for all.

As President Obama outlined in his inaugural address, "America cannot resist this transition. We must lead it." Mr. President, the Latino community, and Americans across the nation, stand ready to support your actions to respond to the threat of climate change and protect our children and future generations.

http://switchboard.nrdc.org/blogs/aquintero/president_obama_vows_actio