Climate change poses 'high risk' to federal spending: GAO

Climate change poses 'high risk' to federal spending: GAO
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Climate change poses a high risk to federal spending, the Government Accountability Office (GAO) re-affirmed in a biannual report on the subject released Tuesday.

The GAO, which has placed climate change in the “high risk” category – reserved for programs most in need of transformation – since 2013, noted the threats to American fiscal policy came from three primary categories: disaster aid, federal insurance for crops and property, and the costs associated with managing federal land.

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“Climate change is playing a role in the increasing frequency of some types of extreme weather that lead to the billion-dollar disasters,” the report found. 

The study found that federal spending on disaster assistance since 2005 had reached at least $450 billion. Flood insurance alone was estimated to cost the government $8 billion a year. Repairs from Hurricane Michael to Tyndal Air Force Base in Florida amounted to $3 billion.

Coastal damage to cities from sea level rise and more frequent and intense storms would reach $4 to $6 billion a year.

But Congress does not have an adequate mechanism to put funds aside for these predictable costs, according to the report.

“The federal budget, however, does not generally account for disaster assistance provided by Congress or the long-term impacts of climate change on existing federal infrastructure and programs,” the report said.

Disaster aid bills, such as the $19.1 billion one approved earlier this month, are seldom offset with spending cuts or revenue increases, and simply add to deficits and debt.
 
According to the Congressional Budget Office, debt held by the public is projected to grow from just under $16 trillion, or 78 percent of GDP, to $28.5 trillion, or 92 percent of GDP.

The GAO also estimated that “for every dollar invested in designing new buildings to particular design standards, society could accrue benefits amounting to about $11 on average.” 

To prepare, the government should create a strategic plan on climate change, estimate and incorporate potential costs, and provide lawmakers with better information about the issue.

In March 2019, the GAO reported the federal government had not made measurable progress since 2017 to reduce fiscal exposure to climate change.