WASHINGTON, DC—Resources for the Future (RFF) today released a new installment of Resources Radio: "Managing Flood Risk under Climate Change."
In this episode, host Kristin Hayes talks with Carolyn Kousky, an RFF university fellow as well as the executive director at the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania. An expert in disaster insurance markets, Kousky discusses some challenges for contemporary flood insurance programs, from ensuring that low-income communities can afford insurance to incorporating the long-term risks of climate change into decisionmaking. Advocating a focus on “risk reduction” rather than mere “risk transfer,” Kousky discusses how natural infrastructure—such as mangroves or wetlands—can mitigate flooding damages, and how risk management tools like insurance can be leveraged to protect these pivotal ecosystem services.
Notable quotes from the podcast:
- The disproportionate impact of flooding on low-income communities: “44 percent of Americans don’t have $400 in liquid funds for an emergency. And so, if you don’t have $400 for an emergency, you certainly don’t have the thousands, tens of thousands, or even much more that you need to rebuild your home [after a flood] … What do you do?” (4:12)
- The need for federal flood insurance: “To be covered for flood, you actually have to purchase a separate flood insurance policy. For a long time, the private sector wasn't willing to offer flooding because it's such a catastrophic and difficult risk, so the federal government stepped in over 50 years ago and set up the National Flood Insurance Program.” (7:19)
- Limitations of insurance in covering extreme weather events: “Insurance typically is a one-year product, so it only prices for this year. So, it's really important that insurance pricing be able to take account of all the climate changes that have occurred to date. We're seeing impacts from climate right now, already. This isn't a future issue anymore—it's a today issue … But insurance is never going to be a tool to send price signals on the risk in 10 or 50 years down the line … It is limited in its ability to bring future climate into decisionmaking.” (12:29)
- Using green infrastructure to mitigate threats posed by floods: “Whether it's mangroves … or inland wetlands storing floodwaters, or green infrastructure in cities to manage these heavy rainfall events, there's a lot of ways to make use of natural systems to lower disaster risk, and those also then convey a whole range of co-benefits to communities in terms of recreation, and habitat, and carbon sequestration.” (26:06)
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