How States Are Adapting Disaster Recovery Amid Climate Change

This summer has starkly highlighted the urgent need for states to rethink their approach to disaster recovery. From the devastating impacts of Hurricane Beryl in Houston to the relentless wildfires sweeping through California, the increasing frequency and severity of climate-related disasters are reshaping how recovery is approached. In an era where climate change is driving more extreme weather events, the focus is shifting from merely returning to normal to proactively preparing for future crises. This new paradigm in disaster recovery reflects both a growing recognition of the need for climate-resilient infrastructure and the pressures from evolving federal policies and insurance industry trends.

Historically, the Federal Emergency Management Agency (FEMA) has relied on a standard definition of floodplains as areas with a 1 percent chance of significant annual flooding. This measure has guided decisions on how and where to rebuild after flooding disasters. However, as climate change accelerates and flood risks intensify, this old standard has proven inadequate. In response, the Biden administration issued an executive order on July 10, mandating that FEMA update its floodplain assessments to account for the increasing risks posed by climate change. Under this new policy, FEMA will require that construction projects funded by the agency be built at higher elevations or relocated out of high-risk areas entirely. This shift aims to enhance resilience in flood-prone communities by incorporating future flood risks into rebuilding efforts.

FEMA Administrator Deanne Criswell emphasized that this policy will improve resilience by considering future flood risks, potentially saving the agency significant costs in the long term. Although the estimated additional cost of $150 million over the next decade may seem substantial, it is a relatively small investment compared to FEMA’s annual disaster spending of $3 billion. The anticipated savings could offset these costs if future flood-related damages are reduced. However, the policy has faced some opposition, particularly from home builders concerned about increased construction costs. Additionally, the recent overturning of the Chevron doctrine could complicate FEMA’s ability to enforce such mandates, but Criswell remains confident in the agency’s authority.

In addition to addressing flood risks, FEMA has also increased funding to support the installation of energy-efficient technologies in disaster recovery efforts. This includes solar panels and heat pumps, which are intended to accelerate the transition to clean energy and contribute to more sustainable rebuilding practices. John Podesta, senior advisor to the president for clean energy innovation and implementation, highlighted that communities not only seek to rebuild but also want infrastructure that can withstand future extreme weather events.

The insurance industry is also playing a crucial role in this evolving landscape of disaster recovery. Insurers are increasingly withdrawing from high-risk areas or raising premiums in response to the escalating costs associated with climate-related disasters. In states like Florida, which has been battered by intensifying storms and rising sea levels, insurers are pulling out or significantly raising rates. This trend reflects the economic realities faced by insurance companies, which have struggled to balance the high cost of claims with premium income. For example, insurers paid out $29 billion in claims related to California wildfires from 2017 to 2018, while only receiving $15.6 billion in premiums during the same period.

California is addressing this insurance crisis through legislative reforms. A proposed insurance reform bill aims to incorporate forward-looking climate models into insurance pricing, allowing insurers to better account for future risks. However, the proposal also mandates that insurers offer policies to at least 85 percent of homeowners in wildfire-prone areas. Governor Gavin Newsom has endorsed this reform as a critical step toward modernizing California’s insurance system, which has remained largely unchanged for decades despite the intensifying climate crisis.

In parallel, the Insurance Institute for Business and Home Safety, a nonprofit supported by over 100 insurance companies, is advocating for new building standards to enhance fire resistance. This initiative aims to promote the construction of homes that are more resilient to wildfires. Experts recommend using non-flammable materials for vulnerable parts of homes, such as roofs, windows, siding, and vents. Additionally, managing the area around homes is crucial; removing flammable mulch, plants, and other materials can significantly reduce the risk of fire damage.

The aftermath of the 2018 Camp Fire in Paradise, California, serves as a stark reminder of the importance of fire-resistant construction. The town has spent years rebuilding according to stringent fire-resistance standards, a strategy that is being adopted by other disaster-affected communities across the country. This approach reflects a broader trend towards integrating resilience into rebuilding efforts, aiming to create infrastructure that can better withstand future disasters.

In summary, as states grapple with the increasing impacts of climate-related disasters, the focus is shifting from merely recovering to proactively preparing for future events. Federal policies, insurance reforms, and new building standards are all part of a broader effort to enhance resilience and sustainability in disaster recovery. By investing in climate-resilient infrastructure and adopting forward-looking approaches, communities can better protect themselves against the escalating risks posed by climate change.