Buildings may be built to expected 100-year return period flood
(e.g., by requiring a certain elevation), but if changing conditions
mean the 100-year flood is now a 25-year flood, not only will
losses exceed expectations due to more frequent inundation,
but also the effect of mitigation will be less than planned when
more severe events than were designed for occur.
Building code standards need to evolve to consider:
■ economic cost (in addition to life safety);
■ community resilience (in addition to single-building engineering); and
■ a range of future conditions viewed stochastically, including
both hazard and risk concentration.
If building standards were revised in this way, structures
would be required to withstand hazards that can be expected
to arise over their lifetimes. If things we build are designed
for a century of use, then our planning horizon must consider
conditions during the next century. While this consideration
is likely to increase current construction costs, it also will reduce future coastal protection costs and preserve long-term
Potential Loss Costs
Many studies have developed measures of future vulnerability to
coastal flooding. One is summarized in Nature Climate Change
(September 2013), titled “Future flood losses in major coastal
cities.” It was supported by the Organization for Economic Cooperation and Development and the World Bank. It developed
a method to quantify future flood losses in major coastal cities.
The study concluded that flood exposure is increasing in
coastal cities due to a combination of “growing population and
assets, the changing climate, and subsidence.” Present and future flood losses for 136 of the world’s largest coastal cities were
estimated under a range of socioeconomic, climate, and adaptation scenarios. Important findings include:
■ Global flood losses are projected to increase almost tenfold by
2050 due to socioeconomic changes alone.
■ Including climate change and subsidence to 2050, significant
investment will be required in adaptation to avoid “
unacceptable losses of US$1 trillion per year.”
■ Even if adaptation investments maintain constant flood probability, sea-level rise and subsidence will increase global flood
losses substantially by 2050.
■ To maintain present flood risk, adaptation will need to reduce
flood risk below present values due to increased severity of
■ Flood defenses can make a big difference, as is demonstrated
by comparing the world’s best protected cities (Amsterdam)
with cities with relatively poor defenses (e.g., Ho Chi Minh
■ Currently, due to their high wealth, three American cities
(Miami, New York, and New Orleans) explain 31 percent of
global aggregate losses, indicating the United States is “par-
This and other studies show that the United States faces the
potential for significant costs from coastal flooding in coming
decades through direct losses, required investments in adapta-
tion, or both. This is not a cause for panic, but rather a prospect
that calls for careful planning and long-range thinking, similar
to what is used to examine trends with social programs.
Government Exposure to Loss
There are many ways the federal government could incur costs
from coastal flooding. Two obvious examples are through the
National Flood Insurance Program (NFIP; which exposes the
government to loss when covered losses exceed premiums) and
the Army Corps of Engineers (Corps; which is charged with
maintaining levees and other defenses). We have seen recent
instances of how these agencies can be affected by coastal flooding in hurricanes Katrina and Sandy.
Katrina was the largest loss in the history of the NFIP, resulting
in direct losses unadjusted for inflation of over $16 billion on
about 168,000 claims. Sandy was the second largest loss, totaling almost $8 billion from 130,000 claims. Katrina exhausted the
program’s reserves and led to large borrowing from Treasury
to pay claims.
Congress reacted to the NFIP’s experience in Katrina with a
series of reforms, the most significant of which was the Biggert-
Waters Flood Insurance Reform Act of 2012. Biggert-Waters
directed the NFIP to charge “actuarial” premiums reflecting
flood risk and eliminated “grandfathering” of certain rates.
As is sometimes the case when legislative bodies mandate
“actuarial” rates, the ensuing premium increases triggered a
firestorm of opposition. In January 2014 Congress passed the
Homeowner Flood Insurance Affordability Act. It reversed
many of the changes introduced with Biggert-Waters, including
reinstating grandfathering and effectively delaying increases
in flood insurance premiums to obtain risk-based premiums.
By the time the 2014 act was passed, the NFIP was $24 bil-
lion in debt. Biggert-Waters and the reaction to it illustrate the
tremendous difficulty government programs have in achieving
long-term financial solidity and undoing ingrained subsidies.
This experience demonstrates why careful planning and gradual
change is critical in enacting effective public policy.
What will become of the NFIP as sea levels rise? The Big-
gert-Waters experience shows how difficult it is to adjust prices.
If things we build are
designed for a century of use,
then our planning horizon
must consider conditions
during the next century.