A climate resilience road map for the new administration

Resources for the Future

By Carolyn Kousky

Revitalized efforts to prioritize climate change adaptation in a new administration could help set the United States on a path toward climate resilience, with strategies that include rethinking development in risky areas and ensuring that recovery efforts are accessible to lower-income households. RFF University Fellow Carolyn Kousky shares her ideas for how to get there.

The risk of wildfires, storms, hurricanes, floods, and heat waves is growing as the planet continues to warm—and the costs are growing as well. Since 2005, the United States has suffered $1.24 trillion in economic losses from 173 weather and climate disasters, each one inflicting at least $1 billion in damages. These events disproportionately harm lower-income and minority households and communities. In addition, climate has been recognized as a threat multiplier, with climate disasters leading to cascading consequences projected to threaten all aspects of life, including worldwide peace and security.

Public policy plays a critical role in either mitigating or magnifying the economic costs of climate change. It is time to put the United States on a path toward climate resilience.

To build a new culture of resilience, we need a complete suite of resilience policies that complement each other. The Biden administration and the new Congress have an opportunity to put in place solutions that address these long-standing policy deficits. To inform this work, I propose the following eight-part federal policy agenda for building climate resilience:

  1. Provide equitable disaster mitigation and assistance
  2. Make recovery from climate catastrophes easier
  3. Improve the financial resilience of households, small businesses, and communities
  4. Fund actions to reduce climate risk on an annual basis
  5. Rebuild for the future, not the past
  6. Strengthen US infrastructure
  7. Harness nature for risk reduction
  8. Pay for resilience investments while fighting climate change and inequality

1. Provide Equitable Disaster Mitigation and Assistance

Lower-income and minority households and communities are at greater risk and suffer disproportionately from disasters. Despite this reality, our federal policies currently do not provide equitable support; instead, programs often favor more affluent and white households and communities.

For an administration and Congress committed to fair and equitable disaster relief, some commonsense solutions can be adopted. For example, Federal Emergency Management Agency (FEMA) grants, from mitigation grants to recovery assistance, can be “means-tested,” a method that would target federal dollars at those who fall below certain income thresholds. This step would help provide greater assistance to people who need it the most. Congress also can subsidize lower-income families for flood or other disaster insurance on a means-tested sliding scale. A larger share of recovery grants from the Department of Housing and Urban Development (HUD) and mitigation grants from FEMA’s new Building Resilient Infrastructure and Communities (BRIC) program can be made available specifically to frontline communities with greater needs. Funds also can be increased for the Low Income Home Energy Assistance Program to help low-income families with utility bills after a disaster.

Renters sometimes lose homes or possessions, or both, as a result of natural disasters, and the federal government can do more to help.

Renters sometimes lose homes or possessions, or both, as a result of natural disasters, and the federal government can do more to help. Momentum has grown in recent years for action; Senator Elizabeth Warren (D-MA) has proposed a federal commitment to replace any damaged affordable housing, which could occur through a new program within HUD or achieved with dedicated funding from the Community Development Block Grants Disaster Recovery (CDBG-DR) program. Existing mitigation grant programs in FEMA and HUD could be harnessed to allow communities to use funds for the establishment of public-private partnerships that can provide parametric microinsurance, a type of insurance that targets lower-income households to provide fast and flexible funding after a disaster—an approach that could be particularly beneficial for renters.

2. Make Recovery from Climate Catastrophes Easier

Navigating the system of federal aid after a disaster is confusing and time consuming at best, and a serious impediment to recovery at worst. Recovery for households generally is provided through three different federal agencies—FEMA, HUD, and the Small Business Administration (SBA)—each with their own application procedures and timelines. Many programs also have inconsistent application requirements and qualifying criteria. Rules restrict households from receiving duplicate benefits, but agencies generally do not coordinate on guiding applicants through the process of navigating multiple agencies, which can generate confusion for those seeking assistance.

Priorities for the new administration should include making recovery from natural disasters easier, reducing the stress of receiving assistance, and helping more people get needed funds sooner—and a variety of policies would further those goals.

First, a universal federal dashboard could clearly explain and help disaster survivors navigate through the aid process. The Hurricane Sandy Rebuilding Task Force identified this need, suggesting a user-friendly tool to navigate all the programs, through what they called a “no wrong door” approach to information access. In addition, funding could be made available to community groups and nonprofits to help survivors navigate the process. This means that data for all applicants (including those denied) would be shared with designated partners, which could further support survivors and help them access necessary resources.

Second, this integrated approach could be linked to one single application for all federal assistance. SBP, a disaster recovery nonprofit, has suggested one idea, which they call OneApp. Through OneApp, disaster survivors could complete just one application and be simultaneously considered for both FEMA and SBA programs. This type of solution could be facilitated further by aligning eligibility rules, integrating the application process, and establishing a modernized data-sharing platform. As US Secretary of Transportation Pete Buttigieg has said, “We need to figure out how to bring aid to people, not make people figure out how to access the aid they need.”

Third, any required documentation to apply for disaster relief would have to be tailored quickly to the circumstances of the disaster. For instance, in some places, such as Puerto Rico and many rural communities, appropriate title documentation for homes does not exist or may be lost in the disaster, preventing survivors from receiving aid. Clear policies, like FEMA accepting sworn affidavits, would help people in this situation, as would linking datasets across FEMA and other agencies.

We need to figure out how to bring aid to people, not make people figure out how to access the aid they need.

- US Secretary of Transportation Pete Buttigieg

Fourth, Congress could make amendments to the Stafford Act to better support people who are recovering from a disaster. One important change could be to remove the limitation that FEMA provide only “temporary” housing, which has led to the provision of trailers at extreme cost instead of more cost-efficient solutions such as repairing homes or quickly establishing cheaper and longer-term housing, such as innovative modular designs that can be expanded over time.

Finally, Congress increasingly has been using the HUD CDBG-DR program to send flexible recovery dollars to communities that have been devastated by severe disasters. This program, however, is not a standing program, and its impermanence creates unnecessary delays with each disaster appropriation. We could resolve some of these challenges by making the CDBG-DR program a permanent program. If also given annual appropriations, HUD could vastly speed delivery of recovery dollars to communities.

3. Improve the Financial Resilience of Households, Small Businesses, and Communities

Repairing disaster damage can be incredibly costly for households. To cover these expenses, households often draw from four primary sources of funds—savings, credit, aid, and insurance. Unfortunately, the majority of American families have very little in liquid funds that can be used to cover disaster losses. Credit may be burdensome or impossible to access for those without sufficient income or credit scores. Aid from neighbors, family, and friends may be difficult when an entire community is hit simultaneously. And government assistance typically is insufficient or too delayed. Insurance provides the needed funds for repair and rebuilding of property, but most households lack disaster insurance—often because it is too expensive.

Several federal policy changes could allow more at-risk households to harness the benefits of insurance, which guarantees the ability to repair and rebuild after a disaster, with positive impacts on their communities and their well-being.

Many natural disasters, such as floods and earthquakes, are not included in standard homeowners policies, which leaves people exposed. Other perils tend to come with coverage limitations, such as higher deductibles. This peril-by-peril approach to insurance in the United States confuses homeowners and leads to a persistent number of at-risk households without disaster insurance. We can learn from other countries and create, through new legislation, a federal program that provides bankruptcy protection to insurers who agree to include all natural perils in homeowners policies. Additional help from the federal government could come in the form of grants to pilot novel public-private disaster insurance solutions, such as community-based insurance or parametric microinsurance.

Since home values are not reflected in most premiums, lower-valued homes are paying too much and higher-valued homes too little.

We also can future-proof the National Flood Insurance Program (NFIP). Financial protection against floods is not currently provided in standard homeowners insurance. While separate policies can be purchased through the NFIP (housed in FEMA), the NFIP itself is billions of dollars in debt and in need of reform. Repaying this massive debt is not possible, and the debt should be forgiven. To prevent unsustainable debt going forward, Congress could formalize a backstop for catastrophic losses while modernizing rates to better reflect risk.

Several additional improvements to the NFIP are long overdue, such as the “Risk Rating 2.0” effort to modernize pricing so that rates better reflect risk, which effectively would send accurate price signals to housing markets. This effort also would undo a regressive cross-subsidy in the current program: since home values are not reflected in most premiums, lower-valued homes are paying too much and higher-valued homes too little. In addition, the continued practice of underwriting repetitive-loss properties is too risky. These properties cost more to continually rebuild than they are worth. Potential buyers also need to be aware when a property has previously flooded: publicly mapping areas with repetitive flood claims could inform development and the housing and mortgage markets.

4. Fund Actions to Reduce Climate Risk on a Regular Basis

Actions can be taken to reduce the damages from natural hazards when disaster strikes. For example, retrofitting buildings can lessen the impacts from hurricanes, earthquakes, wildfires, and floods. Green roofs can combat urban heat. Microgrids can limit wildfire risk from power lines. And in the riskiest areas, buildings can be removed and the land returned to open space.

Right now, roughly 90 percent of the federal dollars that are earmarked to reduce disaster damages are appropriated off budget in supplemental legislation that’s tied to specific large disasters. This approach fails to prevent damages before a disaster hits, leads to less dependable streams of funding, and neglects the reality that a changing climate escalates disaster risk.

The establishment of a new climate adaptation grant program—perhaps overseen by an interagency group with representatives from HUD, FEMA, and the National Oceanic and Atmospheric Administration (NOAA)—could develop strategic priorities for investing in climate resilience, encourage proposals that cross local departments, think holistically about adaptation, and set aside a specific percentage of funding for innovative pilot programs. Such a program likely would need to devise incentives for state and local governments to improve disaster building codes, so that all new construction can withstand the growing risk of climate disasters and save billions of dollars in future losses.

5. Rebuild for the Future, Not the Past

In some areas of very high risk, the presence of people and property is not cost-effective—and soon will not be safe, as climate risks grow and sea levels rise. If we fail to address these escalating climate risks in our rebuilding—both in terms of where we build and how we build—we will be doomed to repeat the past. We can prevent continued escalation of disaster costs by using disasters as an opportunity to build back better, retrofitting buildings, curtailing development in the highest-risk areas and assisting with relocation for people who live in those places, and implementing new models of resilient community design.

Many tools can help support this process. For example, some federal rules currently prohibit upgrades during post-disaster rebuilding that are actually important for safety, resilience, and sustainability. After Hurricane Harvey, HUD rules prohibited the use of CDBG-DR funds to incorporate sustainability or resilience retrofits into rebuilding, and similar Stafford Act regulations need a second look, as well.

We can eliminate federal subsidies in areas where disasters occur repeatedly by requiring that any private landowner choosing to build in an extreme-risk area bear the full costs of that decision.

Former President Obama instituted the Federal Flood Risk Management Standard to guarantee that post-disaster federal dollars would help rebuild to a higher standard, using the best available science on climate impacts. Former President Trump rescinded this order mere days before Hurricane Harvey devastated Texas; reinstating the order across federal agencies can help the federal government prepare for the future.

We can eliminate federal subsidies in areas where disasters occur repeatedly by requiring that any private landowner choosing to build in an extreme-risk area bear the full costs of that decision. This can be done by expanding the Coastal Barrier Resource System—areas in which federal spending on infrastructure, insurance, and post-disaster relief is prohibited—to areas that are at extreme risk for multiple hazards. Government-sponsored enterprises, such as Fannie Mae and Freddie Mac, could be empowered by their regulator to price climate risk, which would send financial signals to housing and mortgage markets about the risks inherent to certain properties.

Finally, the federal government can help facilitate managed retreat through financial incentives for relocation, conservation of coastal ecosystems, and legal and regulatory approaches for transferring ownership to the public sector as rising sea levels threaten private property.

6. Strengthen US Infrastructure

US infrastructure consistently gets failing grades, prompting frequent calls for reform. Both major political parties have proposed infrastructure legislation in recent years. A large expenditure on infrastructure now could create jobs, pump money back into an economy that’s still reckoning with the pandemic, and improve our infrastructure so it can withstand future climate impacts.

Several related actions can further these goals. Congress and agencies have the authority to establish higher standards for any new, federally funded infrastructure, based on climate projections. Grant and loan funding (e.g., through an infrastructure bank) can be expanded so that states, local governments, and tribes can complete needed maintenance and upgrades to guarantee that infrastructure is built according to safety standards that account for climate change. Public transportation systems can play an important role in building climate resilience. New investments in transit, to reduce greenhouse gas emissions and with related infrastructure that can withstand climate impacts, will help.

Investments in green infrastructure can grow, potentially through permanent and expanded appropriations to the Land and Water Conservation Fund. Dams and levees need to be evaluated and, when necessary, upgraded to maintain safety—with government funding for dam removal. We can further bolster preparedness by supporting the adaptation of water and electric utilities to climate risks such as salinization of drinking water from sea-level rise or grid failure from wildfires and storms. Priority funds can be made available to communities through the Clean Water Act and Safe Drinking Water Act.

7. Harness Nature for Risk Reduction

Conservation and restoration of natural areas can make people more resilient to natural disasters. For example, coastal wetlands and mangroves can buffer storm surge, while vegetation can stabilize slopes. In addition to reducing our risk of disaster damages, natural areas provide an array of other benefits: carbon sequestration, beautiful areas for recreation, habitats for native species, improved air and water quality, and higher property values. Unfortunately, we do not sufficiently conserve natural areas. We pollute and degrade many ecosystems, which also get stressed by climate change, and we rarely prioritize nature-based solutions.

The year 2021 marks the start of the UN Decade on Restoration, so there’s no better time to shift course. In line with the goals of this effort, and to harness the power of nature to promote climate resilience, the new administration can consider launching a Restoration Corps. Inspired by Franklin D. Roosevelt’s Civilian Conservation Corps and our modern AmeriCorps program, such a corps could help young adults find meaningful employment during the economic downturn precipitated by COVID-19, provide training and education on environmental restoration, and help restore North American ecosystems. Some portion of the restoration work could focus explicitly on efforts that help manage climate risks, such as expanding urban forests in US cities and thinning fire-prone forests in the American West.

Other federal actions can explicitly prioritize nature-based approaches; for instance, NOAA’s Coastal and Estuarine Land Conservation Program would benefit from more funding, while the public and private sectors can cooperate more often to finance approaches that can be scaled successfully. Finally, we must imagine new ways of living that heighten our climate resilience while enhancing our well-being, such as a Florida community that lives behind its mangroves, benefiting from recreation, storm protection, and the full beauty of the beach and mangrove ecosystem.

8. Pay for Resilience Investments While Fighting Climate Change and Inequality

Many of the actions that can improve our climate resilience require public funds. Our revenue-raising approaches will either enhance or undermine our resilience goals. Taxes are more than just a tool to raise revenue; taxes can discourage destructive activities and promote beneficial practices.

For example, we need to mitigate our carbon emissions as quickly as possible to prevent the devastating intensification of climate change impacts. A tax on carbon would increase the expense of emitting carbon, thereby creating a powerful incentive for polluters to emit less. The revenue raised by a carbon price can in turn support climate resilience efforts.

In addition, inequality in the United States is at its highest peak of the past 50 years. Inequality in income and wealth spills over to create inequality in health and disaster recovery. Lower-income families suffer disproportionately from climate disasters and lack the needed resources to invest in resilience. Current levels of inequality are not inevitable; they’re the result of public policy choices. Alternative tax policies—like implementing a wealth tax on the ultra-rich (a policy supported by a growing chorus of stakeholders) or undoing the 2017 tax cuts—would address inequality and generate substantial funding, which could be put toward the resilience-enhancing policies discussed here, including policies that target those who are most in need.

Next Steps

Too much time has been wasted already. As we begin the urgent work of transitioning to a low-carbon economy, we also can begin the task of building equitable climate resilience across the country.

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