Taxpayers bear the brunt of climate change costs

May 27, 2013

The impact and severity of weather events like the tornado that hit Oklahoma City are increasing due to a changing global climate, according to research from the National Resources Defense Council (NRDC).

“We get more extremes everywhere, so really it’s climate disruption, the term global warming is not really the best term to use because what we’re seeing, and what we’re expecting to see from all the models, is a lot of extreme events. Not per se the number, but the extremity of them,” says Laurie Johnson, chief economist for the NRDC’s climate and clean air program.

And, she says, more of the related economic fallout from these disasters is being carried by taxpayers.

In 2012, federal spending directed toward disaster response for storms, wild fires, floods and drought reached nearly $100 billion the NRDC report says, beating out funding for education and transport.

Johnson says not only is the damage from severe weather increasing, but those costs are being met with federal dollars.

“Increasingly the insurance industry is getting out of the business, because it’s not good business. So, as the private insurance industry has been pulling out of the market, starting with Katrina really, the government has had to step in and to take care of these disasters.”

In 2012, she says, the costs averaged out to roughly $1,100 per tax payer, including those not directly affected by disasters.

Tim Dodge from the Independent insurance agents and brokers of New York says it’s true that in the national context, insurers are less likely to cover damage from weather disturbances.

But, he says it’s different in upstate New York.

“Upstate has its vulnerabilities but we’re not as vulnerable as other parts of the state and other parts of the country and so insurance companies, all things being equal, will be more inclined to continue writing insurance policies up here that they might not be so eager to do in other parts of the country.”

Dodge says as weather events grow increasingly severe, and with the Atlantic hurricane season beginning on June 1, people in the Northeast need to get insurance and be prepared.

The NRDC’s Laurie Johnson says people do need to be prepared, but work also needs to be done to prevent weather disturbances from becoming more severe.

“We of course have to actually start planning for the changes that we can’t avoid, but we don’t want to make them worse,” she says.

Johnson says the increasingly warmer climate has the effect of "turbo-charging" storms and other weather events.

She says converting some of the nation’s older, dirtier power plants to natural gas, and working on getting more renewable energy on the market will go a long way to cutting emissions.

“Some of the oldest and dirtiest plants it wouldn’t even be worth keeping going. So what you would need to do is replace them with cleaner generation,” Johnson says.

New York state is home to some of the oldest power plants in the country, and is currently facing the challenges of a changing energy landscape.