Source of Fiscal Exposure: Environment & Disasters

Environmental sources of risk, such as extreme weather events and nuclear and other hazardous waste, have cost the nation hundreds of billions of dollars over the past decade. The federal government does not budget for the costs of responding to a major disaster and runs the risk of facing a large fiscal exposure at any time. In addition, federal efforts to dispose of high-level radioactive waste and spent nuclear fuel are in flux, and inventories are increasing. Examples of exposures in this area include the following:

Extreme weather events. Disaster declarations have increased over recent decades (see figure below), and the Federal Emergency Management Agency has obligated over $80 billion in federal assistance for disasters declared during fiscal years 2004 through 2011. During the 10 fiscal years from 2004 through 2013, there were 32 percent more presidentially declared major disasters than the preceding 10 fiscal years. Under the National Flood Insurance Program, the annual amount collected in premiums is generally not enough to cover the program's operating costs, claim payments, and principal and interest payments—especially in years of catastrophic flooding. As of December 31, 2014, the program owed approximately $23 billion to the Department of the Treasury to cover insurance claims that exceeded the amount of premiums collected. According to the United States Global Change Research Program, the costs and effects of weather disasters are expected to increase in significance as previously rare events become more common and intense.

Number of Disaster Declarations, Fiscal Years 1953 through 2011

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In addition, as shown in the figure below, costs for the federal crop insurance program increased sharply in recent years.

Federal Crop Insurance Costs, Fiscal Years 2003 through 2012

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Note: In general, the 2010 decline in costs was related to strong yields due to favorable weather conditions and lower crop prices, and the 2011 and 2012 increases reflect crop losses due to drought and higher crop prices.

Hazardous waste. Fiscal exposures occur during the clean up and disposal of environmental contamination resulting from activities in the nation's nuclear weapons production facilities and military installations. The Departments of Energy (DOE) and Defense (DOD) account for about 97 percent of the federal government's reported environmental and disposal liabilities. As of September 30, 2014, DOE's and DOD's reported liabilities were $299.8 billion and $58.6 billion, respectively. All other agencies' combined liabilities were $10.7 billion, creating a government-wide liability of $369.1 billion.


Examples

GAO Reports

Other GAO Resources

Climate change

  • High Risk List Video: Climate Change (February 2013)
  • Federal Emergency Management Agency: Opportunities Exist to Strengthen Oversight of Administrative Costs for Major Disasters (GAO-15-65)
  • Climate Change: Better Management of Exposure to Potential Future Losses Is Needed for Federal Flood and Crop Insurance (GAO-15-28)
  • Disaster Resilience: Actions Are Underway but Federal Fiscal Exposure Highlights the Need for Continued Attention to Longstanding Challenges (GAO-14-603T)
  • Budget Issues: Opportunities to Reduce Federal Fiscal Exposures Through Greater Resilience to Climate Change and Extreme Weather (GAO-14-504T)
  • Climate Change Adaptation: DOD Can Improve Infrastructure Planning and Processes to Better Account for Potential Impacts (GAO-14-446)
  • Extreme Weather Events: Limiting Federal Fiscal Exposure and Increasing the Nation's Resilience (GAO-14-364T)
  • Economic Development: Overview of GAO's Past Work on the National Flood Insurance Program (GAO-14-297R)
  • Federal Disaster Assistance: Improved Criteria Needed to Assess a Jurisdiction's Capability to Respond and Recover on Its Own (GAO-12-838)
  • Disaster Cost Estimates: FEMA Can Improve Its Learning from Past Experience and Management of Disaster-Related Resources (GAO-08-301)

Climate Change Funding and Management

Climate Change Response

Disaster Management

Understanding Climate Change

Nuclear and hazardous wastes

  • Spent Nuclear Fuel Management: Outreach Needed to Help Gain Public Acceptance for Federal Activities That Address Liability (GAO-15-141)
  • Hanford Waste Treatment Plant: DOE Needs to Take Action to Resolve Technical and Management Challenges (GAO-13-38)
  • Nuclear Waste: Disposal Challenges and Lessons Learned from Yucca Mountain (GAO-11-731T)
  • DOE Nuclear Waste: Better Information Needed on Waste Storage at DOE Sites as a Result of Yucca Mountain Shutdown (GAO-11-230)
  • Nuclear Waste Management: Key Attributes, Challenges, and Costs for the Yucca Mountain Repository and Two Potential Alternatives (GAO-10-48)
  • Environmental Liabilities: Long-Term Fiscal Planning Hampered by Control Weakness and Uncertainties in the Federal Government's Estimates (GAO-06-427).

Disposal of High-Level Nuclear Waste

Hazardous Waste

Toxic Chemicals

Other related areas

Farm Programs