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Don Paul: The cost of flood insurance rising as fast as water levels

A new article from the Yale School of Forestry & Environmental Studies reveals very disturbing trends in the federal flood insurance program. Most of the problems are linked to ongoing and future sea level rises due to global warming, but these problems threaten the existence of the entire program across the nation. Sea level rise in combination with coastal storms are forcing the National Flood Insurance Program/NFIP to pay out many billions in damages.

The appeal of living by the sea continues to grow despite the inevitably increasing threat to coasts, barrier islands and the properties on them. The rebuilding and repairs following such disastrous impacts on flood-prone islands and coasts and the new property developments going up on these lands means damages will continue to rapidly increase.

Sea levels are not going to level off in the next century or beyond. Meltwater from Greenland, Antarctica, and expansion in sea water volume due to warming assure a yet uncertain amount of sea level rise will persist well into the 22nd century. The Yale article cites Long Beach Island, a barrier island on the New Jersey shore, as a classic example. It has $15 billion in properties on it, and it was utterly devastated by Sandy in 2012.

The Army Corps of Engineers has pumped more than 10 billion cubic yards of sand to repair Long Beach Island's beaches. This is not to suggest such repairs shouldn't be undertaken. However, adding new properties to such at-risk locations means future flood damages will continue to skyrocket in costs well beyond the unsustainable expenses already faced.

Of the $52 billion in flood claims since 1978, $38 billion (73 percent) has been tied to coastal flooding. Of that total, $35 billion is tied to just six huge storms, including Sandy and Katrina. All of those storms have occurred in the last 15 years.

The federal government, according to the Yale article, got into flood insurance with reluctance. Private insurers fled this market because of high risk and unpredictability. NFIP has had to rely on taxpayers to fund claims, and is now $25 billion in debt to the Treasury Department. In other words, NFIP is facing potential bankruptcy because it is the insurer of last resort.

Looking just at the New Jersey shore, property value has gone from less than $1 billion in 1960 to more than $170 billion today. And properties on the Atlantic and Gulf coasts in total are now worth more than $3 trillion. Yale author Gilbert Gaul reports much of that value is insured through NFIP.

Data estimates 100,000 people have been impacted by coastal flooding who would not otherwise been in danger were it not for the warming-related sea level rise which has already occurred. Nothing can be done about that. But the future rate of sea level rise still has high uncertainty.

At the current average level, a 2013 study predicted a major hurricane striking the Tampa metro area could produce $175 billion in damages. Other metro areas including Miami, Norfolk, and New Orleans are especially vulnerable due to porous rock and sinking land, as I touched upon in an earlier article.

A 2016 Rutgers study predicts New Jersey sea level rises could range between 1 and 1.8 feet by mid-century with lower carbon and methane emissions. However, the rate of future rises is quite "rangy," and a worst case scenario could bring a 4.5 foot rise with higher emissions. A recent National Oceanic and Atmospheric Administration study has a global mean rise of as high as 8 feet by the end of the century if carbon dioxide and methane emissions continue at their current levels.

While that extreme is less than likely, it is not so unlikely as to not merit consideration. Sea level rises have exceeded climate model projections at a number of spots around the globe.

The real estate firm Zillow funded a study which estimates as much as $900 billion worth of U.S. coastal homes could be under sea level by 2100. Florida and New Jersey are the two states at greatest risk. In Florida, 1 million homes are at risk and in New Jersey, the total is 190,000 homes.

If you haven't figured it out yet, the enormous debt and skyrocketing future debt for NFIP impacts everyone depending on the program across the country, including flood plains in our region. NFIP is heavily subsidized, otherwise premiums would be unaffordable for many homeowners who hardly are in the upper income range, and for small businesses.

I haven't found much in the way of potential fixes for this NFIP fiscal crisis. It appears the best we can hope for is reduced human-caused greenhouse emissions to mitigate the extent of ongoing warming. There is a vast difference between the impacts from a 1-1.8 foot sea level rise and a 4-8 foot average rise.

The warming climate can't simply be turned off. The longevity of the extra carbon dioxide in the atmosphere is a matter of physics. But the rate and extent of future warming can be mitigated. Just how much mitigation we can achieve depends on societal and governmental action in the near future.

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