Create a fund to protect against disasters instead of spending on the aftermath
“A version of this article appeared in DesMoines Register”
By: James L. Witt and Carl Pope*
The last three years should have taught Americans an important lesson:
With Western wildfires, heartland flooding and hurricanes becoming more frequent and more severe because of climate change, the time has come for the federal government to establish a trust fund with a dedicated funding source that provides communities around the country reliable funding for risk reduction and hazard mitigation investments.
And at a time when Washington cannot agree on how to finance badly needed programs, it’s a remarkable truth that protecting communities against such risks and hazards not only pays for itself, but would reduce, not increase the federal deficit.
Massive 2019 flooding in Iowa found many levees unrepaired from the previous high-water season, putting some communities underwater for months.
In the West, the fire season has expanded by months. In 2018 the entire town of Paradise, California burned to the ground, 86 people died, and millions of acres were scorched. Then two years later the worst fire season in history swept the West.
In 2017, Hurricane Harvey dropped unprecedented inland rainfall over the entire Houston area, greatly expanding our understanding of “hurricane alley.” Then three years later an unprecedented number of Atlantic hurricanes hit the Southeast and Gulf of Mexico; hurricanes ran through the alphabet past Z.
From 2017 to 2019, there were 44 billion-dollar disasters in the U.S., resulting in $460.8 billion in losses and 3,569 deaths. In the first 10 months of 2020, there have been 16 billion-dollar disasters nationwide, including the August derecho event that slammed multiple states, including Iowa, causing an estimated $7.5 billion in damage.
According to the Congressional Research Service, the “increase in the frequency and severity” of major disasters in recent years has significantly driven up federal government disaster relief costs.
Scientists now have documented that climate change has directly contributed to this increased frequency and severity of natural disaster events and will continue to do so in the future.
At the community level, these major disaster events have resulted in lost jobs, small-business closures, damage to critical infrastructure, environmental degradation and destruction, lost school days, and population displacement.
And, as the dust settled from the 2020 election, Washington appeared headed for more gridlock over whether — and how — to pay for even the most urgently needed investments in American recovery and prosperity.
Investing in risk reduction at the community level not only can generate substantial economic growth and job creation, but also result in lower federal disaster relief costs and less damage and disruption at the state and local level. Under today’s economic conditions, it would actually reduce the federal deficit.
In 1998, the city of Napa, California, initiated the 20-year, $200 million Napa River Flood Management Plan designed to reduce the impacts of future floods. The project implemented a combination of both structural measures (construction of a flood diversion channel, improved flood walls protecting the downtown space, raising bridges to allow debris flow during a flood) and non-structural measures (restoring 650 acres of wetlands, property buyouts) that vastly reduced damage from subsequent flood events.
This investment by Napa not only helped the community to become more flood resilient but also contributed to the economic and social revitalization of the city resulting in the “creation of an estimated 1,373 temporary construction jobs and 1,248 permanent retail and administrative jobs” and nearly $1 billion in new public and private investments in the community.
The combination of accumulated high-risk infrastructure repairs and enhancements with very low federal costs of borrowing mean that investments in disaster risk reduction, funded with federal borrowing, will more than pay for themselves in reduced federal payments for post-disaster relief.
Creation of a dedicated trust fund would finance projects with high federal, state and local savings on future disaster relief costs, like dam and levee repairs, floodplain buyouts, elevating sewage plants and other grid facilities above rising sea level and would generate a flow of greatly reduced federal relief costs over 20 years.
These savings could then be used to repay the initial investments, with enough left over to finance the costs of a subsidized revolving fund from which cities and states could borrow going forward to help reduce the magnitude of yet another generation of disasters for which they would otherwise have to pay the recovery costs.
Since the federal government in most cases, pays about half of disaster costs, a $500 billion initial trust fund could be allocated 50% to federal risk reduction projects, and 50% to loans to cities and states for their resilience investments. At today’s federal borrowing rates, such borrowing is interest free, so there is no cost to the taxpayer in repaying these loans over 20 years. This is, truly, a lunch we get paid to eat.
Making $500 billion in these kinds of disaster prevention infrastructure investments immediately available and guaranteeing that the trust fund will provide an ongoing and reliable source of city and state funding for risk reduction and hazard mitigation actions, would generate jobs in the manufacturing, construction and government sectors and reduce the economic and social impacts of disasters on our communities.
In addition, these funds will support community-based efforts to implement disaster risk reduction and climate change adaptation actions that will reduce the impacts of future events on their people, economy, environment, and vulnerable populations while at the same time reducing federal disaster relief costs.
And while the $500 billion initial investment is precisely what the COVID-devastated economy needs, the Trust Fund’ revolving fund will guarantee that once the economy recovers, there will remain an automatic mechanism to finance ongoing and desperately needed infrastructure and risk reduction investments in the face of an accelerating, changing climate.
The opportunity is now, in the face of increasing occurrences of climate-driven disasters, to implement a Trust Fund to support our states and communities to Build Back Better for our future.