Crop insurance, disaster relief spending expected to skyrocket

Without “ambitious action” to reduce greenhouse gas emissions, the long-term effects of climate change may cost the U.S. government and American taxpayers tens of billions of dollars per year, a federal report released earlier this month has found.

The report — jointly published by the Office of Management and Budget and the Council of Economic Advisers — used different global change models to forecast the fiscal consequences of climate change. While the report acknowledged there are still too many unknowns to fully understand climate change’s impact, it predicted that crop insurance, healthcare, wildfire suppression and disaster relief programs will likely see sharp spending increases.

Federal spending in those four areas could increase by as much as $112 billion per year toward the later part of this century, the report found.

“This is a very valuable study,” said David Doniger, director of the climate and clean air program at the Natural Resources Defense Council, a not-for-profit advocacy organization based in New York. “This study shows the actual, real-life, long-term economic problems for the federal government, for the taxpayer and for the economy as a whole.”


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Climate change is caused by a buildup of carbon dioxide, methane and other greenhouse gases in Earth’s atmosphere, according to the U.S. Environmental Protection Agency. The accumulation of those gases traps heat and prevents the planet from cooling off.

In the United States, experts say that the effects of climate change will likely bring drought to some areas and wetter winters to others. Worldwide, effects will likely include rising sea levels, more intense heat waves and unpredictable extreme weather.

On top of steep spending increases, federal revenue is also projected to take a severe hit because of climate change, the report found. With continued global warming, the U.S. government could see a loss in revenue between $340 billion to $690 billion annually.

“The cost that taxpayers would bear is probably just the tip of the iceberg when you also take into account the costs to the economy,” Doniger said.

Failing crops, flooding and fires

The U.S. Department of Agriculture’s federal crop insurance program — administered by the Risk Management Agency — helps protect farmers from financial losses caused by poor crops or low prices.

Although crop insurance has become a cornerstone for keeping farmers in business in down years, critics argue the program has become far too costly. In 2015, USDA data shows that more than 1.2 million individual crop insurance policies were sold covering more than 120 crops across 300 million acres.

The cost to the federal government — which subsidized the premiums farmers pay — was more than $6 billion.

In their joint report, the Office of Management and Budget and the Council of Economic Advisers found that climate change will likely cause crop insurance to increase by “billions of dollars each year” by late-century, as farmers deal with reduced yields and environmental uncertainty. The report found that subsidies for soybeans could increase by more than 60 percent, while subsidies for corn could increase by more than 40 percent.

Impacts to agriculture will also affect food security overall, the report found.

“This is not just crop insurance,” said Doniger, who has worked for the Natural Resources Defense Council since 1978. “It’s bigger than that.”

In addition to insuring farmers’ crops, the U.S. government also provides funds for when natural disasters such as hurricanes and wildfires destroy communities.

Spending for disaster relief in the aftermath of coastal hurricanes has exceeded $200 billion since 2000. By 2075, annual economic damages could be about $120 billion more compared to 2016, the report found.

Climate change has led to fire seasons that are now on average 78 days longer than they were 50 years ago, according to federal statistics. That increase has been caused by a combination of warmer temperatures and less precipitation.

The report found that future fire seasons could last up to 300 days in “many areas of the country.”

A new U.S. Department of Agriculture aerial survey brought the total number of dead trees in California up to more than 102 million across 7.7 million acres of drought-stricken forests. In 2016 alone, about 62 million trees have died.

“These dead and dying trees continue to elevate the risk of wildfire, complicate our efforts to respond safety and effectively to fires when they do occur, and pose a host of threats to life and property across California,” said USDA Secretary Tom Vilsack in a statement.

To lessen financial impacts, Doniger said it’s important that policymakers and international leaders “take action now.” He said that doing so would be “a very smart thing to do,” though he’s doubtful the incoming administration under President-elect Donald Trump will take any meaningful steps to mitigate the effects of climate change.

“You think that people who profess to be concerned about the future of the economy and restoring American greatness wouldn’t ignore this stuff, but I suspect that it will be tough to get the new administration to take seriously this threat,” Doniger said.


See related: “Climate action up in air after Trump victory”

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