Affordability of Flood Insurance
This year, the Biggert-Waters Act of 2012 will remove the subsidies from many home flood insurance policies to reflect “the full ‘risk-based’ rate,” triggering significant rate increases for many homeowners. This has caused business groups, politicians, and others to call for a delay of “some of the largest increases until the 2015 fiscal year.”
In a new RFF issue brief, RFF Fellow Carolyn Kousky and co-author Howard Kunreuther of the University of Pennsylvania’s Wharton Risk Management and Decision Processes Center write that the National Flood Insurance Program (NFIP) “must address affordability, but that this should not be done through discounted premiums.” They propose a new approach: creating a voucher program coupled with financing risk reduction measures through low-interest loans. “By requiring hazard mitigation,” they write, “future disaster losses would be reduced for both the NFIP and for the low- and moderate-income families.”
Carbon Tax Referendum
Prime Minister-elect of Australia and Leader of the Liberal Party Tony Abbott said that the parliamentary election in his country was a “referendum on the carbon tax.” In the United States, however, perception is split. Rep. Earl Blumenauer (D-OR) was quoted saying that he doesn’t think it’s “an international referendum on a carbon tax,” while Rep. Corey Gardner (R-CO) said “I think it’s very much a warning.” And Sen. Sheldon Whitehouse (D-RI) feels that “ultimately a [US] fee on carbon pollution is inevitable.”
Although political debates will continue, RFF’s Raymond Kopp, senior fellow and director of RFF’s Center for Climate and Electricity Policy, believes that “it’s time to end the discussion of the impact a carbon tax would have on US economic growth . . . it has no substantial impact.” He cites new analysis by RFF researchers showing that a “broad-based, revenue-neutral tax on carbon dioxide emissions would have imperceptible effects on macroeconomic growth as measured by GDP.” Read the full report here or watch a video discussion of the findings here.
