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Three months ago the US Federal Emergency Management Agency made a small piece of history: it finally started to incorporate scientists’ projections about climate change into its aid programmes.
In some senses, this is good news. Hurricanes Helene and Milton have demonstrated the terrible costs of weather disasters, in human and financial terms. It thus makes sense to ensure that Fema does not waste money rebuilding places that could be wiped out again.
However, the bad news is that this decision only emerged a short while ago. Worse, this delay shows why taxpayers have every right to feel angry with their government.
No, it is not because of the false allegations recently hurled by former president Donald Trump suggesting that Fema had given money to immigrants. Nor due to the other conspiracy theories circulating on social media that Fema is trying to debunk — or the agency’s lamentably mixed record in handling past disasters (which partly reflects a dire shortage of funds).
The real reason to feel angry is that America’s leaders have been so slow to acknowledge and plan for the reality of climate change. That has left the public unprepared, particularly since the financial ecosystem has inadvertently encouraged people to settle in dangerous places. And the cost of these policy failures is likely to fall on the poor, not the rich — as the distressing pictures from Florida and North Carolina show.
Why has this happened? It reflects a subtle mix of culture, politics and economics. The cultural element arises because, ever since the pioneers, there has been a temptation to assume that Americans can bend the natural landscape to human will. Thus the rich keep building mansions in dazzlingly beautiful places that are vulnerable to environmental risks (such as beachfronts). And poor communities often get shoehorned into dangerous regions.
Worse, because of this cultural predilection, insurance groups and mortgage providers have offered services to homebuyers in the past at rates “which do not fully account for climate risks”, as a devastating Senate report says. Fema and others have also provided backstop insurance in a manner that also underplayed these risks.
And that reflects another problem: politics. Climate change denial by parts of America’s right has left the debate highly polarised, making it hard to develop holistic policies. Indeed just two months ago, Trump told voters not to worry about climate change, arguing this would merely create more “oceanfront propert[ies].”
As a result, millions have moved into climate-vulnerable regions in the south in recent years, seemingly oblivious to the risks. These homeowners are now discovering that (at worst), private sector insurance companies are starting to withdraw coverage, or (at best) drastically raising the fees, amid a wave of insurance failures.
A cynic might argue that this is just how markets force adaptation. Perhaps so. But the pattern means that many poor households are now financially vulnerable to weather shocks. When Hurricane Harvey hit Texas in 2017, it later emerged that most of those affected were not insured. And while Fema is supposed to offer a safety net, the agency has almost exhausted its $42bn annual budget — even before Milton.
So what should the next president do? Five key changes are needed. First, and most obvious, the government must shout about climate change risks and bake these into all policies, not just those of Fema. It must tell voters the unpalatable truth that almost half of all American houses — or $22tn of stock — are now exposed to extreme weather events.
Second, the government needs proactive adaptation policies. That means building defences such as sea walls in regions that can be protected — and encouraging populations to leave when that is unfeasible. This involves tough moral choices: “moving the 20mn people at risk from sea-level rise alone appears daunting”, says the New America think-tank. But it will be far easier if long-term planning starts now.
Third, creative measures will be needed to fund Fema — and some government backstop for uninsurable risks is essential.
Fourth, it is crucial that aid is distributed in a transparent and equitable way. While Fema claims it is supporting poor communities, research by Federal Reserve economists — among others — suggests that compensation and relocation policies favour the rich, risking political backlash.
Fifth, politicians and business leaders must channel the current shock into support for climate mitigation policies such as green tech. It would be scandalous if this shock simply fuels conspiracy theories like those Trump peddles.
There are challenges: insurance and housing is regulated at the state, not federal, level; the wealthy are adept at capturing policymaking processes; and, if Trump wins the election next month, there may be more climate change denial.
But without policy change, America’s long-range weather forecast looks grim. Milton and Helene should be a wake-up call; let us hope voters listen.
gillian.tett@ft.com
