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The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
 

Senate gets back to climate science

The Senate Environment and Public Works Committee holds a hearing tomorrow called “Update on the Latest Climate Change Science and Local Adaptation Measures.” This is the first Senate hearing focused directly on climate science in the 112th Congress, and we hope it won’t be the last. Climate change is happening, the news from peer-reviewed science is increasingly daunting, and the public needs to hear what credible scientists are learning about the risks and potential solutions.

Congress Finally Reforms Flood Insurance

Late last week, in a heartening display of bicameral and bipartisan harmony, Congress passed a bill reauthorizing the National Flood Insurance Program (NFIP) and taking steps to steer it toward solvency. Among those steps is ensuring that climate impact projections are factored into future calculations of flood risk.

The Climate Stewardship Acts

The Climate Stewardship Acts were a series of acts introduced in the 108th United States Congress. Senators Joseph Lieberman (D-CT) and John McCain (R-AZ) introduced the first bill in 2003. It was followed in 2004 by a House companion of the bill introduced by Representatives Wayne Gilchrest (R-MD) and John W. Olver (D-MA). Starting in 2010, the bills would have capped greenhouse gas emissions of the electricity generation, transportation, industrial, and commercial economic sectors at the 2000 level, while providing for market-based trading of emission allowances.

 

Understanding the Climate Stewardship Acts

 

Additional Resources

Legislation in the 112th Congress Related to Global Climate Change

More than 100 bills, resolutions, and amendments focusing on climate change were introduced in the 112th Congress (2011-2012). Many more touched on energy, environment, transportation, agriculture and other areas that would have an impact on climate change. The list below, however, contains only those bills whose authors thought it was important to explicitly reference climate change or related terms, such as greenhouse gases (GHG) or carbon dioxide. (For brevity, all legislative proposals are referred to here as "bills.")

Reflecting an anti-regulatory mood on Capitol Hill, there were nearly as many proposals in the 112th Congress to block efforts to curb carbon emissions as proposals to strengthen them. And, reflecting the general state of gridlock in Congress, virtually none of the bills proposed were enacted.

A closer look:

  • 113 climate-specific bills were introduced in the 112th Congress. This compares with 263 such bills introduced in the Congress before this one, 235 in the Congress before that, and 106, 96, 80, 25, and seven, respectively, in the Congressional terms before that.
  • 57 of the bills (52 percent) supported climate action in some way. However, for the first time since the introduction of the McCain-Lieberman greenhouse gas cap-and-trade bill in 2003, not a single greenhouse gas cap-and-trade bill was introduced. Most took much smaller steps, such as preparing the United States to adapt to climate change or preserving voluntary greenhouse gas reduction programs in a bill that would otherwise block the Environmental Protection Agency's climate change work. The two bills that proposed a comprehensive approach to reducing U.S. greenhouse gas emissions would have established a carbon tax. (Two of the bills mentioned greenhouse gases without clearly supporting or hindering climate action.)
  • 55 bills would have blocked or hindered climate action – 40 of which would have prohibited or hindered regulation of greenhouse gas emissions, primarily by preventing EPA from regulating under the Clean Air Act. Four of these passed the House, with no prospects for movement through the Senate. For its part, the Senate voted on four bills to prevent, delay or modify EPA's authority to regulate greenhouse gas emissions, all of which failed.

Perhaps the most significant law enacted by this Congress addressing climate change is not on the list below because it does not mention the words "climate change" at all – the reauthorization of the National Flood Insurance Program. Among other things, the bill, signed into law by President Obama, seeks to ensure that "the best available science regarding future changes in sea levels, precipitation, and intensity of hurricanes" are factored into future calculations of flood risk. Our blog notes that the bill is a good first step toward comprehensive reform that will bring the program back to solvency.

In addition, a bill that would combine House and Senate energy efficiency measures passed the Senate on its last day before the elections and was signed by President Obama in December 2012.

The bills, resolutions, and amendments of the 112th Congress dealing with climate change are divided into the following categories:

A Green Light for Regulating GHGs under the Clean Air Act

In a resounding victory for sound science and policy, the US Court of Appeals decided unanimously this week to uphold both EPA’s finding that greenhouse gases endanger public health and welfare and the agency’s initial set of regulations limiting emissions from vehicles and major new and modified industrial sources.

Given the choice, we’d much prefer to see a new law establishing a comprehensive market-based program to reduce greenhouse gas emissions. But until Congress gets its act together, regulating emissions under the Clean Air Act is really the only option.

Eileen Claussen Comments on Appeals Court Ruling Upholding EPA's Greenhouse Gas Rules

Statement of Eileen Claussen
President, Center for Climate and Energy Solutions

June 26, 2012

Today’s decision reaffirms sensible science-based regulation and takes an important step to protect the American people from dangerous climate change.

We’ve always maintained that the best way to reduce U.S. greenhouse gas emissions is through new legislation establishing a comprehensive market-based approach. But in the face of Congressional inaction, EPA has no choice but to move forward under the existing Clean Air Act—not the best tool, but for now the only one available.

As expected, the Court affirmed EPA’s interpretation of the overwhelming scientific evidence that climate change endangers America’s environment and economy. It also affirmed common-sense steps by EPA to tailor the somewhat cumbersome provisions of the Clean Air Act to the particular challenges of regulating greenhouse gases. 

The ruling significantly reduces the regulatory uncertainty facing major emitters so they can begin factoring carbon reductions into their investment decisions. Far from the draconian scenarios painted by opponents, the greenhouse gas standards for vehicles will deliver huge fuel savings for consumers,

Hopefully we can now move past the false debate over whether or not climate change is real, and continue the hard work of building common ground for common-sense solutions.

Contact: Rebecca Matulka, 703-516-4146, matulkar@c2es.org

 

Reforming National Flood Insurance Program

With the Senate set to vote today on fixes to the ailing National Flood Insurance Program (NFIP), a new C2ES brief explains why the program is chronically in debt to the U.S. Treasury, and how to make it solvent. We urge, among other things, that Congress allow federal underwriters to begin taking into account rising flood risk due to climate change.

The 44-year-old federally-backed NFIP covers 5.6 million American households and more than $1 trillion in assets in flood-prone areas along rivers and coasts. Flooding is not an easy risk to insure, so historically private insurers chose not to. But in assuming that role, the NFIP has at times served to encourage rather than contain risk, and has racked up $18 billion in debt in the process.

Our Comments on EPA's Proposal to Regulate GHGs from New Power Plants

This week, C2ES filed comments on EPA’s proposed greenhouse gas (GHG) emissions standard for new power plants. 

Let me start by saying I would prefer to be working on the implementation of a market-based program to reduce GHG emissions. For years, C2ES has believed that a market-based policy—whether a cap-and-trade program, an emissions tax, emissions averaging among companies, or a clean energy standard with tradable credits—would be the best way of reducing GHG emissions and spurring clean energy technology. Market-based policies create a good division of labor, with the law setting the goal, and private industry deciding how best to achieve it. 

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Fixing A Broken National Flood Insurance Program: Risks And Potential Reforms

Fixing A Broken National Flood Insurance Program: Risks And Potential Reforms

June 2012

by Dan Huber

Download the full brief (PDF)

Read the related blog post


The National Flood Insurance Program (NFIP) insures 5.6 million American homeowners and some $1 trillion in assets. For many years, however, the premiums collected have not been sufficient to cover losses, resulting in a current debt to the U.S. Treasury of more than $18 billion. A number of factors, including increased flooding as a result of climate change, are likely to further widen the gap between revenue and risk. Reforms are needed to put the NFIP on the path to solvency and to reduce homeowners’ exposure to chronic and catastrophic flooding risk. Ideally, such reforms should fully account for the increased risks posed by climate change. At a minimum, steps are needed to adjust premiums, improve flood mitigation measures, and prepare for the catastrophic risk of events like Hurricane Katrina. 
 

Introduction

With government budgets still reeling from the effects of the recent recession, and ongoing debates over the future costs of Medicare and Social Security, unfunded public liabilities are of growing concern. The National Flood Insurance Program (NFIP) is one such liability that is often overlooked. The NFIP is already significantly in debt due to premiums that have not reflected the true risk of flood damages. Looking forward, the risk of further losses only increases, as demographic trends place more infrastructure in harm’s way, watersheds are developed and climate change increases flood risk over time.[1]

This paper explores the structural issues underlying the growing gap between flood insurance premiums and actual flood risk. It also examines reforms that can put the program on a more sound financial footing and the incentives needed to reduce the potential costs of future flooding. A report by the American Enterprise Institute found that insurers have “a huge opportunity today to develop creative loss-prevention solutions.” [2] Using both adaptive and financial tools to manage the rising risks posed by climate change will be critical to preventing losses and maintaining the insurability (and therefore property values) of trillions of dollars in at-risk property assets.

Between 1980 and 2005, U.S. insurers paid out a total of $320 billion in weather-related insurance claims.[3] While not all weather-related claims are flood claims, losses from weather events are increasing.[4] Today, the NFIP covers over $1.2 trillion in assets, representing more than a fourfold increase since 1980.[5] If providing this coverage is to remain affordable, Congress must provide FEMA with the tools to accurately price and manage risk.
 

References

1. Kousky and Kunreuther, (2010, March 1). Improving Flood Insurance and Flood-Risk Management: Insights from St. Louis, Missouri. Natural Hazards Review, Vol. 11.

2. Kunreuther and Michel-Kerjan, (2009, January 15). Market and Government Failure in Insuring and Mitigating Natural Catastrophes: How Long-Term Contracts Can Help. Washington D.C., USA: American Enterprise Institute Conference on Private markets and Public Insurance Programs

3. Stephenson, John B., (2007). Financial Risks to Federal and Private Insurers in the Coming Decades Potentially Significant. Washington D.C., USA: United States Government Accountability Office

4. Kunreuther and Michel-Kerjan, Market and Government Failure in Insuring and Mitigating Natural Catastrophes: How Long-Term Contracts Can Help. Op. Cit.

5. Michel-Kerjan, Forges and Kunreuther, (2011). Policy Tenure Under the U.S. National Flood Insurance Program (NFIP). Risk Analysis. 

 

Daniel Huber
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