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Senate poised to vote on global warming as a consideration in flood insurance

Evan Lehmann, E&E reporter

The nation's sprawling flood insurance program would begin considering the impacts of climate change under a Senate bill that is expected to be voted on this week.

The legislation instructs the 44-year-old program with 5.6 million policyholders to incorporate science's best estimates about future flooding changes into the map-making process that identifies floodplains across the country.

That could have substantial effects on a program that has been criticized for relying on historical records that many observers say fail to narrate the oncoming story of risks that threaten to be exacerbated by higher temperatures. If the provision survives, it will mark the first explicit effort by the flood program to incorporate climate projections into its maps -- and, in turn, its rates, according to several experts.

"That whole mapping section is a pretty big deal," Michael Buckley, who oversaw the National Flood Insurance Program in 2008 and 2009, said of the bill's provisions in Section 118.

The legislation instructs the Federal Emergency Management Agency, which runs the program, to plan for potential "future inundation" by using the latest research on climate change when updating the flood maps that weave through most counties in the country. It pinpoints possible threats from sea-level rise, increased precipitation and intensifying hurricanes.

"I'd say it definitely opens the [climate] issue up for far more consideration than previously," said DavidMaurstad, who ran the flood program under George W. Bush.

The legislative move comes as a wide cross-section of lawmakers support raising the program's rates to help rescue it from the mountain-high debt it incurred during Hurricane Katrina in 2005. Many of those rates have been politically suppressed for years, experts say, promoting development in high-risk areas and fostering a false sense of confidence among homeowners.

The proposed bills, in both the Senate and the House, to reform the flood program over a five-year period call for higher rates among some of the riskier policyholders and for second homes. Democrats tend to support those increases to discourage new development in natural areas, while Republicans say they will save taxpayers from shouldering emergency funding after catastrophes and make private insurers more competitive.

The climate provision in the Senate measure could also have a remarkable impact on the number of homeowners who may have to buy flood insurance and the amount they pay.

Bigger floods, more expensive insurance

If the climate models used by the program project substantial increases in storm surge, flooding related to sea-level rise, and heavier downpours, then the damage-prone land in river valleys, along lakes and on the seashores could expand. As the boundaries bulge, more homes would become located in floodplains known as Special Flood Hazard Areas under the program -- those areas that have a 1 percent chance of being inundated annually.

That could make the purchase of flood insurance mandatory for homeowners whose mortgage lenders are federally regulated.

"I don't see how it couldn't result in a larger Special Flood Hazard Area resulting in more properties being subject to the mandatory purchase requirements that generally result in an increase in the number of policies," Maurstad said of the climate provision. "It would be new to consider this to the extent that I believe is contemplated under the bill."

The program was already moving in that direction. A FEMA study undertaken in 2009, but not yet released, found that climate change could expand floodplains in the United States by up to 45 percent over the course of this century.

The Senate bill says the flood program should use the "best available climate science" being developed by the National Oceanic and Atmospheric Administration and the U.S. Geological Survey. It should also tap into the reservoir of research on climate being pursued by universities and other government agencies, said David Conrad, an expert on the program.

"These are [climate] models that are being developed and used, but don't find their way into FEMA's mapping," said Conrad. He said the language passed by the Senate Banking Committee is "a big deal."

"It's quite a change from how things are done now," he added. "I think what the committee is saying is, 'Let's get real.'"

Do levees eliminate risk?

The House bill, which passed overwhelmingly last July, does not include the Senate's language about global warming. The House version also does not mandate homeowners living behind levees to buy flood insurance, as the Senate requires.

Sen. Mark Pryor (D-Ark.) is expected to offer an amendment next week to strike that provision, to the consternation of some environmental and conservative groups. These advocates believe some communities will push for the construction of additional levees if it subverts requirements for insurance, potentially damaging floodplains and increasing economic damage if levees fail.

"Levees aren't foolproof," said Joshua Saks, legislative director for the National Wildlife Federation. "We are concerned about waiving sort of all [insurance] requirements for those people [behind levees], because you mask the risk."

He says homeowners protected by levees should pay a reduced premium for flood insurance.

Some conservative advocates are in agreement with environmentalists. Requiring insurance behind levees reduces economic risk and government payouts after catastrophes and moves the public program incrementally toward private market principles, said Eli Lehrer, president of R Street Institute.

"Given the realities of climate change and the fact that the levees were built a long time ago with different climatic circumstances, it certainly is a relevant and important addition to the bill," Lehrer said of the levee provision.

House version comes close

Apart from the Senate's language on climate change and levees, the House and Senate bills are generally in agreement: They both require higher rates for policyholders in the most dangerous areas, improved mapping and increased revenue at a time when the program is billions of dollars in debt.

But there are some concerns that House members might target the Senate's climate language if the Senate passes its bill next week.

"It certainly wouldn't surprise me if it was targeted," said Eileen Fretz, associate director of government relations for American Rivers. "But it doesn't specifically say anything about it being human-caused climate change. If you're looking at the future and trying to realistically assess where we'll be and where we should allow development, or encourage development, it doesn't make any sense not to look at climate change."

Several small differences between the chambers' two bills would need to be settled before a final product reaches the president's desk. One environmentalist played down the risk of losing the climate language, saying deeper reforms to the mapping process would ensure that future projections are considered.

Lehrer, meanwhile, provided a message for conservatives that is based on free market principles: If Republicans want the program to be modeled after private insurance companies, then climate has to be considered, he said.

"This is something that the entire insurance industry agrees on," he said of climate. "So I don't see how you can responsibly move the rates toward actuarial accuracy unless there is some accounting for the idea of climate change."

Reprinted from ClimateWire with permission from Environment & Energy Publishing, LLC. 202-628-6500


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Reprinted from ClimateWire with permission from Environment & Energy Publishing, LLC. 202-628-6500.

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