Worst-case scenario: Almost 13,000 federal facilities could be harmed by flooding

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The Biden administration is looking at how the climate crisis will impact the federal budget and revenue.

Under the worst-case scenario, nearly 13,000 federal facilities may be at risk from rising sea levels due to the climate crisis. 

That is one of several points included in various documents released by the Office of Management and Budget on Monday related to climate risks in the federal budget and federal revenue going forward. This follows an executive order President Biden issued in May 2021 ordering such calculations. 

“At the upper end of that range, climate change could lead to an annual federal revenue loss at the end of the century of 7.1%, which in today’s dollars would equal $2 trillion per year,” Candace Vahlsing, associate director for climate, energy, environment, and science at OMB, and Danny Yagan, chief economist at OMB, wrote in a blog post. “Furthermore, the analyses found that the federal government could spend between an additional $25 billion to $128 billion annually on just six types of federal expenditure: coastal disaster relief, flood insurance, crop insurance, healthcare insurance, wildland fire suppression, and flooding at federal facilities.” This is the first time OMB is formally accounting for climate risks in the federal budget, they added. 

While there isn’t a comprehensive dataset of all federal buildings and structures, the Federal Real Property Profile Management System is the closest thing to that and thus can provide some insight into the financial risks to the federal government as a result of climate change, said a white paper accompanying OMB’s assessment

Using the system, OMB identified more than 40,000 federal buildings and structures that have a total replacement cost of about $81 billion (in 2020 dollars) that are in the current 100-year floodplain, which are areas that have at least a 1% chance of flooding annually and considered “high risk” by the Federal Emergency Management Agency. 

Also, there are about 60,000 structures that have a total replacement cost of $493 billion that were identified as part of the current 500-year floodplain, which are areas that have at least a 0.2% chance of flooding annually. 

“As global warming continues to exacerbate sea level rise and extreme weather, our nation’s floodplains are expected to grow by approximately 45% by century’s end,” the Natural Resources Defense Council, an environmental advocacy group, said in April 2019. “Among other things, FEMA’s floodplains determine how and where homes and other structures are built, as well as who is required to purchase flood insurance (coverage is mandatory if you live in a floodplain and have a federally backed mortgage).” It also noted that some of the flood maps have been found to be inaccurate, according to a Bloomberg story from 2017. 

Additionally, OMB and the National Oceanic and Atmospheric Administration “identified 10,250 individual federal buildings and structures, with a combined replacement cost of $32.3 billion, that would be inundated or severely affected by typical high tide under an eight-foot sea level rise scenario,” the white paper said. “Under a ten-foot ‘worst case’ sea level rise scenario…12,195 individual federal buildings and structures would be inundated, with [a] total combined replacement cost of over $43.7 billion,” which was in 2020 dollars. This was also reviewed using the Federal Real Property Profile Management System. 

The white paper noted that some of these federal facilities appeared to be outside of the 100-year floodplain “reinforcing the expectation that sea level rise will appreciably expand the number and value of federal facilities facing flood risk in the coming decades.” 

There are other potential climate related risks for federal facilities that were not assessed here and there were also data limitations in assessing the full extent of flooding risks, said the paper. 

In order to mitigate these effects, last year, Biden reinstated the Federal Flood Risk Management Standard, which President Obama established and President Trump revoked, to encourage agencies to consider and manage present and future risks of floods as well as established a working group to coordinate implementation of it. Additionally, in 2020 the General Services Administration did a high-level assessment of flood vulnerabilities for venues within its jurisdiction and has started integrating climate considerations into its decision-making processes, said the documents. 

The assessment also lays out potential direct and indirect climate risks and costs to the federal government’s mortgage insurance programs and Medicare and Medicaid spending, wildfire response, infrastructure services and expenditures, and national security environment. 

Biden’s budget proposal for fiscal 2023, which he released last Monday, lists several budgetary needs for the near term that will “both help reduce the federal government’s long-term fiscal exposure to climate-related financial risk and reduce future climate risks for all Americans,” OMB’s assessment said. “In total, the budget invests a historic $44.9 billion in discretionary funding to tackle the climate crisis,’ which is almost a 60% increase from the fiscal 2021 enacted level.”