This is Adaptation: The Elimination of Subsidies Under the National Flood Insurance Program

Abstract

This article analyzes the ongoing debate over amendments to the National Flood Insurance Program (NFIP) in the broader context of adaptation to climate change. In the fifty years since its enactment, the NFIP has proven to be a financial and environmental disaster. The availability of flood insurance through the NFIP has encouraged an unprecedented population surge along the coasts, and, as this population has become increasingly vulnerable to hurricane activity and flooding from sea level rise, the federal government has paid billions in insurance claims and disaster relief. Moreover, the increased coastal population has jeopardized the ability of coastal ecosystems to adapt to rising sea levels, putting both humans and the natural environment at risk. The Biggert-Waters Flood Insurance Reform Act of 2012 was intended to correct some of the these problems in the NFIP by eliminating subsidized premium rates and updating insurance rates to more accurately reflect risk. Those amendments, however, have been met with bitter opposition from those now facing increased premium rates for flood insurance. Several recent pieces of legislation have called for significant delays in the rate increases. Much of the opposition to the NFIP amendments can be traced to a broader resistance to lifestyle changes that may be required by a changing climate. Adaptation to climate change is still in its infancy in the United States, and has not yet had an impact on the lifestyles of most individuals, including lifestyles made possible by substantial government subsidies for everything from flood insurance to roads to water. But as certain land use patterns and other behaviors become increasingly unsustainable, the elimination of subsidies that encourage environmentally harmful behaviors is likely to become an appealing first step toward adaptation. The elimination of those subsidies will work tremendous changes on communities that have relied upon them for decades, as is currently happening in coastal communities reliant on flood insurance. Consequently, prior to their elimination, it is important to understand whether the provision of subsidies in the past creates any future obligation on the part of the government to those people who have built their lives around subsidies. After considering several different legal frameworks through which such legal obligations might be imposed, my article concludes that the government is under no obligation to continue its subsidies of environmentally harmful behaviors. Despite the controversy and reluctance likely to accompany any measures that force changes in lifestyle, these are the kinds of changes that adaptation will require.

Keywords: adaptation, climate change, flood insurance, sustainable growth