A New York City-based research nonprofit has developed a tool to quantify the risk residential properties face from wildfires, such as those currently ravaging the West Coast.
The First Street Foundation Wildfire Model predicts that 71.8 million homes currently have some level of risk and due to climate change, that number will increase to 79.8 million homes by 2050 — an uptick of 11.1%. The organization also has a tool to assess flood risk.
First Street’s free online model supports residential homes and apartment buildings. When attempting to search an address that is mixed-use or commercial, the model provides a message identifying the property as such and will not currently identify a risk level.
Two kilometers inland from Hawke’s Bay on the North Island of New Zealand, a dark-red gate just off the highway marks the entrance to the Tangoio Marae. This marae (meeting place) is where a local Māori hapū (community) holds regular gatherings and ceremonies. The location seems perfect: surrounded by lush green hills, close to the city of Napier, and just a stone’s throw from the ocean. But there is one problem: the marae is at very high risk of flooding. The hapū of Tangoio Marae have a serious decision to make about this place that is so central to their community, and one of their decision-making tools is unorthodox: a board game.
Called Marae-opoly, the Māori community designed the game in partnership with researchers from New Zealand’s National Institute of Water and Atmospheric Research (NIWA) with the explicit goal of helping the hapū decide how to manage the flood risk to their marae. While the researchers from NIWA contributed scientific data about known flood risks and projected climate change effects, the hapū brought their own experiences and values to the table during game development brainstorming sessions.
Disclosing, assessing and ultimately taking action to tackle climate risk has steadily marched into the mainstream of the financial and corporate world in recent years, with the guidelines set out by the Taskforce on Climate-related Financial Disclosures (TCFD) widely regarded as a critical tool for any forward-thinking company’s corporate strategy.
That much is evidenced by growing pressure on boardrooms in the upcoming AGM season to disclose climate threats, and increasingly stringent legal and regulatory requirements for businesses to disclose their climate risks and develop credible net zero strategies coming into force in the U.K., EU, and beyond.
So, fast forward a few years from now, could the same trend be repeated for nature-related risks such as biodiversity loss and habitat destruction?
To remove household hazardous waste—some items that can catch fire, react, or explode under certain circumstances or that are corrosive or toxic—after the 2018 and 2020 California wildfires, the Environmental Protection Agency (EPA) took steps that followed its emergency response policy. For example, EPA led coordination efforts between federal, state, and local agencies and established incident management teams. These teams developed plans for assessment, removal, transportation, and disposal of the waste. EPA removed waste from three counties in 2018 and seven counties in 2020. See figure below.
Following its wildfire responses, EPA conducted lessons learned activities, such as gathering feedback from staff to identify lessons and developing corrective actions. Lessons learned provide a method to share good ideas for improving work processes, quality, and cost-effectiveness. Key practices of a lessons learned process include collecting and sharing information on positive and negative experiences and developing and tracking corrective actions.
However, GAO identified additional lessons learned activities that may have been useful. For example, GAO found that EPA does not track corrective actions in a formal, centralized way, and EPA has not implemented all of the needed corrective actions. After the 2018 wildfires, for example, EPA found that it needed to develop a proposal to increase the number of EPA On-Scene Coordinators responsible for overseeing disaster responses, but the agency did not do so.
EPA conducts lessons learned activities on a case-by-case basis and does not have a formal lessons learned process in place for wildfire or other disaster responses that specifies when and what lessons learned activities should be conducted. The National Response Framework—which describes how the federal government, states, and others should respond to disasters and emergencies—states that planning for disaster response should include a feedback loop, including through lessons learned processes. Developing a formal lessons learned process that includes key practices, such as tracking corrective actions, will help EPA be better prepared to respond to future disasters, including those that involve removing household hazardous waste.
Why GAO Did This Study
In 2018 and 2020, California experienced record-setting fire seasons, resulting in the damage to or destruction of over 20,000 structures. EPA plays a significant role in responding to some wildfires and coordinates federal efforts to assist with the removal of household hazardous waste. Following a fire, EPA recommends special handling and disposal for these products, particularly if their containers are compromised.
The Additional Supplemental Appropriations for Disaster Relief Act, 2019, includes a provision for GAO to review a range of response and recovery issues following the 2018 disaster season. This report examines (1) the steps EPA took to remove household hazardous waste after the 2018 and 2020 wildfires in California and (2) the extent to which EPA conducted lessons learned activities following its wildfire responses. GAO reviewed relevant agency documents related to household hazardous waste removal after wildfires and applied criteria for planning lessons learned activities. GAO interviewed representatives from federal agencies, as well as state and local officials involved in the response to the 2018 and 2020 wildfires.
Across the nation, the federal government regulates approximately 11,000 facilities that make, use, or store extremely hazardous chemicals in amounts that could harm the public if accidentally released. The Environmental Protection Agency (EPA) requires these facilities to develop a risk management plan to prevent or minimize the consequences of an accidental release.
Climate change may increase the frequency and intensity of certain natural hazards, putting these facilities at greater risk of damage and releasing chemicals into surrounding communities. According to federal data, approximately 31% of the facilities we analyzed (3,219 of 10,420) are located in areas impacted by some natural hazards, such as wildfires and flooding.
Want to find out if any of these facilities are close to where you live or work? Check out our interactive map for details on these facilities and whether they are in areas with known natural hazards, such as flood zones.
Researchers found a high probability of flood damage — including monetary damage, human injury and loss of life — for more than a million square miles of land across the United States across a 14-year period.
In a new study, North Carolina State University researchers used artificial intelligence to predict where flood damage is likely to happen in the continental United States, suggesting that recent flood maps from the Federal Emergency Management Agency do not capture the full extent of flood risk.
In the study, published in Environmental Research Letters, researchers found a high probability of flood damage – including monetary damage, human injury and loss of life – for more than a million square miles of land across the United States across a 14-year period. That was more than 790,000 square miles greater than flood risk zones identified by FEMA’s maps.
Better information leads to better decisions – this is the idea behind a regulatory device known as “mandated disclosure.” Mandated disclosures are all around you, from calorie counts on fast food restaurant menus to conversations with doctors around informed consent.
But the biggest experiment yet in mandated disclosure may be an expected U.S. Securities and Exchange Commission proposal to extend these ideas to climate impacts facing U.S.-listed companies. The disclosure rule, expected to be proposed soon, would require publicly traded companies to release information to investors about their emissions and how they are managing risks related to climate change and future climate regulations.
While it is easy to spot risks facing companies like ExxonMobil, which produces and sells fossil fuels that contribute to global warming, more hidden vulnerabilities exist for businesses across the U.S. economy.
Investor pressure for better information about climate impacts comes from two directions.
First, some investors want to avoid companies that will be affected by climate change. The company’s products may be regulated in the future because of their impact on the climate, or its supply chains may get more expensive over time. Investors want to know which businesses will be able to adapt and preserve profitability.
Second, many investors are interested in ESG investing, which involves assessing companies’ commitments to environmental, social and governance factors. Today, ESG investing accounts for US$17.1 trillion — or 1 in 3 dollars — of the total U.S. assets under professional management. The challenge for the SEC is to ensure that claims being made about the sustainability of a company are based on reality.
The trend toward ESG investment has led to an outpouring of voluntary disclosure: About 90% of companies in the S&P 500 publish voluntary reports disclosing statistics on things like carbon emissions and how much renewable energy they use.
Some large investors require disclosure. For example, BlackRock, a multinational asset manager with around $10 trillion under its control, requires companies it invests in to disclose certain climate information. The United Kingdom plans to require climate disclosure starting in April 2022, and the European Union has reporting rules in place.
But the U.S. has been slow to impose mandatory climate disclosure requirements. Public companies have only been subject to a more general legal standard that they not materially mislead investors. The SEC released guidance in 2010 to encourage climate disclosures, but it was unenforced and failed to prompt standardized disclosures.
One reason is that the companies can easily evade disclosing useful information while still complying with the letter of the law. These “rule benders” can be very creative. Consider the restaurant in New York City that was subject to a health inspection grading regulation and managed to disguise its “B” rating by simply adding “EST” to its display of its grade. Disclosure regulations can also fail when they don’t effectively communicate valuable information.
A study of one type of climate disclosure – emissions labels on consumer products – found mixed evidence as to whether consumers altered their behavior in response. Rule benders can exploit human tendencies to discount or filter out warnings by providing an avalanche of unnecessary information that confuses and overwhelms the intended recipient.
Expect court challenges
One challenge the SEC has grappled with is whether it has statutory authority to require companies to disclose their “Scope 3”emissions. These are emissions that a company doesn’t directly control, such as emissions from the use of its products or emissions in its supply chain.
A company like Amazon may have extensive upstream Scope 3 emissions in its suppliers’ transportation networks. General Motors would have extensive downstream emissions when people drive its gas-powered vehicles.
The SEC’s three Democratic commissioners, who make up a majority of the commission, have reportedly split on whether certain Scope 3 emissions can be viewed as “material” to investors and therefore subject to disclosure.
“Material” is defined as information that a reasonable person would consider important in making an investment decision.
The Administrative Procedure Act allows courts to vacate SEC rules that are deemed arbitrary or capricious because the agency failed to offer sufficient justification for choosing the proposal over alternatives. The SEC is acutely aware of this risk. A prior oil and gas extraction disclosure rule was invalidated by a court in 2013 as arbitrary and capricious.
Proceeding with caution
The SEC’s forthcoming climate risk disclosure rule will not be the final effort to use information to shape the private sector’s response to climate change.
What the SEC does now will affect those future moves. No wonder it is taking its time and proceeding cautiously.
The Environmental Protection Agency’s Risk Management Plan (RMP) Rule requires certain facilities that make, use, handle, or store hazardous substances (chemicals) to develop and implement a risk management program to detect and prevent or minimize the consequences of an accidental release. These facilities, known as RMP facilities, include chemical manufacturers and water treatment plants. Federal data on flooding, storm surge, wildfire, and sea level rise—natural hazards that may be exacerbated by climate change—indicate that over 3,200 of the 10,420 facilities we analyzed, or about 31 percent, are located in areas with these natural hazards (see figure). View the full results of GAO’s analysis here.
Notes: This map does not include one RMP facility in each of Guam and the U.S. Virgin Islands, Storm surge data are not available for the West Coast and Pacific islands other than Hawaii, and sea level rise data are not available for Alaska.
RMP facilities face several challenges, including insufficient information and direction, in managing risks from natural hazards and climate change, according to some EPA officials and stakeholders. By issuing regulations, guidance, or both to clarify requirements and provide direction on how to incorporate these risks into risk management programs, EPA can better ensure that facilities are managing risks from all relevant hazards. When developing any such regulation, EPA should, pursuant to relevant executive orders, conduct a cost-benefit analysis.
Why GAO Did This Study
Over 11,000 RMP facilities across the nation have extremely hazardous chemicals in amounts that could harm people, property, or the environment if accidentally released. Risks to these facilities include those posed by natural hazards, which may damage the facilities and potentially release the chemicals into surrounding communities. Climate change may make some natural hazards more frequent or intense, according to the Fourth National Climate Assessment.
GAO was asked to review climate change risks at RMP facilities. This report examines, among other things, (1) what available federal data indicate about RMP facilities in areas with natural hazards that may be exacerbated by climate change; and (2) challenges RMP facilities face in managing risks from natural hazards and climate change, and opportunities for EPA to address these challenges. GAO analyzed federal data on RMP facilities and four natural hazards that may be exacerbated by climate change, reviewed agency documents, and interviewed agency officials and stakeholders, such as industry representatives.