Key Issues > U.S. Government's Environmental Liability - High Risk Issue
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U.S. Government's Environmental Liability - High Risk Issue

The federal government’s estimated liability for environmental cleanup activities has been growing for the past 20 years and is likely to continue to increase. When addressing these environmental liabilities, it is important to reduce risks to the public and the environment in cost-effective ways.

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Federal Government’s Environmental Liability

When federal government activities contaminate the environment, various federal laws, agreements with states, and court decisions put the government on the hook for the cleaning bill. The federal government’s environmental liability has been growing for the past 20 years and is likely to continue to increase as agencies continue to better understand the complexities of the clean-up mission.

The combination of this growing financial liability and the risk to public and environmental health has propelled the issue of federal environmental liabilities onto the High Risk list.

For fiscal year 2016, the federal government’s estimated environmental liability was $447 billion—up from $212 billion for fiscal year 1997. The Department of Energy (DOE) is responsible for by far the largest share of the liability (83 percent or $372 billion in fiscal year 2016) and the Department of Defense (DOD) is responsible for the second largest share (14 percent or $63 billion). However, these estimates do not reflect all of the future cleanup responsibilities facing federal agencies.

Total Reported U.S. Environmental Liability, Fiscal Year 2016

Total Reported U.S. Environmental Liability, Fiscal Year 2016

Note: We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

Department of Energy

Over the past 2 decades DOE has spent billions on environmental cleanup, but DOE’s environmental liability has roughly doubled from $176 billion in fiscal year 1997 to the fiscal year 2016 estimate of $372 billion. Moreover, DOE’s estimated liability does not include billions in future costs. For example, DOE has not yet developed a cleanup plan or cost estimate for the Nevada National Security Site and, as a result, the cost of future cleanup of this site is not included in DOE’s fiscal year 2015 reported environmental liability. DOE needs to take a nation-wide approach to cleaning up these sites—one that identifies which risks pose the greatest threat to human health and the environment and prioritizes addressing them accordingly—which could reduce costs while also reducing environmental risks faster.

Total Reported Department of Energy Environmental Liability, Fiscal Years 2000 to 2016

Total Reported DOE Environmental Liability, Fiscal Years 2000 to 2016

Note: We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

Department of Defense

DOD is responsible for the second largest share of the federal government’s reported environmental liability—$63 billion in fiscal year 2016. DOD’s total reported environmental liability has remained relatively constant over the past 2 decades. However, DOD’s environmental cleanup costs are likely to exceed its current estimate because a number of activities are not fully included in its estimate; the activities are not included because, among other things, their scopes are not yet known. Notably, DOD’s inability to estimate with assurance key components of its environmental liabilities was a material weakness noted in recent audits of the government’s consolidated financial statements.

Other Agencies

The remainder of the U.S. government’s estimated environmental liability (about $12 billion in fiscal year 2016) was managed by numerous departments and agencies and, similar to the DOE and DOD portions, is likely to increase. Federal agencies with large reported environmental liabilities in fiscal year 2016 included NASA, USDA, and the Departments of Transportation, Veterans Affairs, and Interior. Since 2000, the reported environmental liability for most of these agencies has also increased.

Next Steps

Because of the lack of complete information and the often inconsistent approach to making cleanup decisions, federal agencies cannot always address their environmental liabilities in ways that maximize the reduction of health and safety risks to the public and the environment in a cost effective manner. Future progress in addressing the U.S. government’s environmental liabilities depends on how effectively federal departments and agencies set priorities, under increasingly restrictive budgets, that maximize the risk reduction and cost-effectiveness of cleanup approaches. As a first step, some departments and agencies may need to improve the completeness of information about long-term cleanup responsibilities and their associated costs so that decision makers, including Congress, can consider the full scope of the federal government’s cleanup obligations. As a next step, certain departments, such as DOE, may need to change how they establish cleanup priorities and select cleanup remedies.

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  • portrait of David Trimble
    • David Trimble
    • Director, Natural Resources and Environment
    • trimbled@gao.gov
    • 202-512-3841