Flooding is the costliest natural disaster in the United States, yet few communities are adequately prepared when a flood strikes. Although communities do commit resources and funding to resilience measures after floods, additional measures are necessary to adapt to climate change.
Flooding costs the United States between about $180 billion and $496 billion each year, according to a recent government report. Damage to public infrastructure, housing, and businesses contributes the bulk of these financial losses. Given that climate change is increasing the frequency and severity of flooding events, the economic toll of floods in the future largely will depend on the extent to which communities can adapt. Will they be up for the task?
A new working paper presents a nuanced answer. Overall, “communities that are damaged by floods routinely take measures to build resilience in the aftermath of flooding disasters, even if those measures are costly or politically fraught,” says Yanjun (Penny) Liao, a fellow at Resources for the Future (RFF) and an author of the paper.
Liao and her coauthors gathered data from the Community Rating System, a federal program that incentivizes flood preparedness, to estimate the effects of a flood on a community’s investments in flood resilience. The program awards a given community a specified number of points depending on the resilience measures that the community invests in, and these points count toward a score that earns residents discounts on insurance provided by the National Flood Insurance Program. The 22,000 US communities that are eligible for the National Flood Insurance Program can earn points by adopting more stringent regulatory standards, building levees and dams, and investing in stormwater management, among other measures. Communities also can lose points, along with the accompanying discount on insurance, if the federal government deems a community’s resilience measures insufficient.
If a community’s score increased after a flood, the authors analyzed the measures the community undertook to increase that score. These analyses also reveal how responses to floods varied based on characteristics of a community.
Credit: Wil Tilroe-Otte / Shutterstock
Communities that already were enrolled in the Community Rating System responded to floods with increasingly diverse resilience measures, including measures that tend to be expensive (e.g., improvements to infrastructure) or politically unpopular (e.g., stricter building codes). And if a community was not enrolled in the Community Rating System, they were more likely to join after a flood.
“Our findings suggest that community leaders are willing to put in the work once they’ve experienced disasters firsthand,” says Liao. “Even if community leaders are aware of the cost of flooding, actually seeing the impact of a flood can make the public more aware of the benefits of resilience measures and be enough to change policy decisions. This is ultimately a good thing: communities are becoming more resilient.”
Yet another layer of the findings in the working paper is that the measures taken by communities after floods are not the most cost-effective option for improving resilience, and US communities still are not as resilient as they need to be. Few communities are investing in resilience measures to the degree that they significantly increase their score under the Community Rating System; any gains are relatively small. Most enrolled communities earn a small discount on insurance premiums—usually about 5–15 percent—but few earn a discount of 25 percent or higher. (The system’s maximum discount is 45 percent.)
Notable differences also exist between the communities that make the largest post-flood investments and the communities that invest less. Communities with the greatest capacity to respond, which are typically high income and close to urban centers, have the strongest responses after a flood; on average, these communities amassed three times as many Community Rating System points as lower-capacity communities. A community’s proximity to an urban center was a key driver of this response.
Instead of waiting until after the storm, policymakers need to incentivize communities to make changes before they’re affected in the first place.
Yanjun (Penny) Liao, RFF Fellow
“Communities are unequally equipped to adapt to floods,” says Liao. “Communities with more resources can adapt in ways that lower-capacity communities cannot. Because these lower-capacity communities also tend to be communities of color, lower income, or rural, they can be disproportionately vulnerable to the impacts of flooding.”
An implication of the paper is that the incentive—discounted insurance—offered by the Community Rating System may be insufficient motivation for a community to adapt before disaster strikes. For context, the take-up rate for flood insurance offered by the National Flood Insurance Program has been low and continually declined in the past decade. Complementary policies and incentive structures beyond premium discounts could provide stronger motivation, and, to ensure equity, these policies will need to target vulnerable communities with limited capacity and resources to adapt.
“Post-flood adaptation is not as efficient or cost-effective as proactive adaptation,” says Liao. “Instead of waiting until after the storm, policymakers need to incentivize communities to make changes before they’re affected in the first place.”
