Transcripts For CSPAN2 Hearing On Climate Change The Econom

Change the House Oversight subcommittee on the environment held its fifth hearing on Climate Change. Everybody sits together we will get started the subcommittee will come to order without objection the chair is authorized to declare a recess at any time so to discuss Climate Change on the future Economic Impact i will defer the Opening Statement for myself and when we spoke earlier i mentioned the fact we would hopefully to do a hearing we have time for Opening Statements but what i would like to do is to give each of you the opportunity to do so. Let me introduce the four of you have all freight oh gomez from the Accountability Office senior director for environmental risk the institute for Economic Freedom doctor greenstone Milton Friedman and the honorable Stephen Benjamin mayor from south carolina. So you are now recognized to give an oral presentation of your testimony for five minutes. I am pleased to be here today how to limit the federal government fiscal exposure by reducing risk this is an area on our high risk list since 2013 recent disaster has shown the need for planning and for investing in resilience the statement discusses Climate Change in the us and the federal Government Faces exposure from Climate Change risk and the extent the federal government has invested in resilience the economic effects of Climate Change could be significant and not easily distributed across sectors and regions of the us. For example the southeast and midwest to Great Plains Region have greater combined economic effects because of Property Damage and changes in the other two regions. Law the estimates are due to modeling and to better manage climate risk earlier the share we reported the federal Government Faces fiscal exposure in several areas. Including disaster aid and federal Insurance Program and federal property and land. The rising number of disasters are a key source of federal fiscal exposure since 2005 federal funding for Disaster Assistance is at least 450 billion according to the Global Change Research Program the cost are projected to increase as certain extreme weather events become more frequent and intense due to Climate Change. In addition the National Flood Insurance Program and federal crop Insurance Program are sources of federal exposure in part to the vulnerability of the insured property and crops due to Climate Change 2013 through 2017 bosses paid under these programs told us 51. 3 billion as of april of this year, the National Flood Insurance Program was 21 billion in debt to the treasury. With regard to federal property that government owns hundreds of thousands of facilities such as defense installations and manages millions of acres of land that could be affected by Climate Change. For example in september 2018 Hurricane Florence damaged camp lejeune and other marine corps facilities in North Carolina resulting in a preliminary repair estimate of three. 6 billion. One month later Hurricane Michael devastated the air force base in florida with the repair estimate of 3 billion. One way to reduce federal exposure is reduce or eliminate longterm risk from Natural Hazards for example september 2018 we reported the codes had greater damages in texas and florida during the 2017 Hurricane Season Congress Also passed the Disaster Recovery act of 2018 that had additional improvements at the state and local level. With regard to resilience the federal government has made limited investments it does not have a strategic approach for investing in Climate Resilience no one is in charge when it comes to prioritizing projects across the federal government no federal entity is looking holistically at how to strategically prioritize projects to address the nations most significant climate risk. The federal government could reduce fiscal exposure to focus and coordinate federal efforts. We have a total of 62 recommendations and since december last year 25 remain open. Some of these identify key efforts needed to help plan and manage climate risk and direct efforts to a common goal such as improving resilience. I conclude my Opening Statement. Thank you very much. You are now recognized for five minutes. Thank you mister chairman. I am the senior director from the Nature Conservancy in 2011 to 2018 serving california insurance commissioner. Climate scientist concluded contributing to catastrophic weather events sealevel rise and coastal river flooding are all made more severe and frequent by global temperature rise. Resulting in loss of life and injury and destruction. Producing these losses they are rising over time. From 19822019 those extreme weather is 1 billion more of one. 7 trillion. In 2017 Global Economic losses 300 million and global insured was 380 billion the highest in history United States Insurance Companies are responding to Severe Weather events by raising prices and limiting coverage for certain risk when the rot risk is too high. Flood insurance is an example how they could respond. Decades a gay they concluded the risk was too high and since then they have excluded coverage for flood risk in all standard Home Insurance policies. Today to focus on extreme wildfires but are increasing in and to have between two and six more damaging wildfires. In 2018 california had the largest wildfires in history 150 lives lost tens of thousands of structures destroyed and in california alone 21 dust in 2018 followed by 13 billion of losses the largest ever. Home insurers have responded by raising prices for insurance and declining to renew policies or refusing to write new policies if they have too high of a risk of wildfire and california is marching steadily to the uninsurable future so what do we do . Greenhouse gas emissions have to be reduced drastically in one important and overlooked way is Natural Climate Solutions giving a 37 percent carbon reduction. More public and private investment as a broad effort to meet the targets we need to address the ecosystems in the integrated fashion with collaboration and innovation and funding to Community Strategic that is a safe and Cost Effective way to remove overgrown brush that is resilient to wildfires. The 2018 fire fix help to stabilize however must be coupled with Risk Reduction programs. And employees an Important Role with the Risk Reduction benefits they could design it offer risk of wildfires they take into account Home Insurance pricing and availability the wildfire risk is one example of how insurers may respond to those risks associated with Climate Change hurricane risk and risk that are all examples of the consequences. The insurance sector can play a role to manage these risks but it is the underlying driver that need to be addressed with reducing Greenhouse Gas emissions and also to adapt the risk otherwise to find yourselves in an uninsured world. Thank you. Now recognized for five minutes. On the Milton Friedman professor of economics and in Energy Policy institute in chicago. The cost of carbon is the cost of deciding them of pollutants in the atmosphere. To account for potential benefits to society to lower carbon emission and to the carbon required gas emissions so first let me give a little history. In 2009 i convened the Interagency Working Group to determine a governmentwide value. In 2016 the government estimated social cost at 50 per ton of co2. Since its inception has been used as a foundational tool to have 150 federal regulations with Energy Efficiency but to date the benefits conclude the total cost of carbon have risen but there are several reasons that it is too low and as a consequence undermines the wellbeing of the american people. Number one in 2018 the Trump Administration instituted a smaller social cost of one or seven dollars compared to 50 based on two faulty assumptions it uses an appropriately high discount rates that are not supported by economic theory or Financial Markets. Second it doesnt account for those damages outside of the United States and other countries do not take emission cuts to benefit us citizens. The special role of global diplomacy can produce demonstrable benefits for citizens and we are failing. The absence of meaningful progress at madrid climate talks as evidence of what happens when we retreat. Number two the social cost of carbon is no longer of economic understanding is noted by the 2017 report by the National Academy of sciences. As to fill the whole i started to collate Climate Impact lab implementing the recommendations to update the cost of carbon. The finding is changes of mortality rates due to temperature changes alone will lead to a social cost of 24 per metric ton of co2. In context that 24 is ten times larger than the obama number of the mortality cost. In fact its half of the entire obama estimate and three times larger than the Trump Administrations entire cost of carbon. Number three while estimating climate damages and subject to uncertainty with climate models had estimations this actually strengthens the case. Economics reveal that people show a propensity toward risk aversion the entire industry of insurance depends on the idea that people dislike risk theyre willing to pay a premium and for this reason us governments estimate social cost of carbon under all administration is likely to low. What to do . Given the scale of the climate challenge and the urgent need of resources for other societal challenges with those cheapest reductions both in today and in the future. The surest way to achieve reductions is to price with a carbon tax while implementing a cap and trade program. At the right level these pricing approaches solve the main problem they dont take account of the damages to release co2. This approach great appeal as it unleashes Market Forces to uncover the least expensive way to reduce emissions by incentivizing the reductions families and businesses can reduce emissions and have money for other priorities. In contrast current federal state policy is a hodgepodge to target emissions in different sectors in different ways with different degrees of intensity. Iowa recent paper by colleagues at yale and harvard the range of cost of co2 mitigation policy is extremely wide less than ten dollars per ton to over 1000 per ton and both are relatively expensive in the sense they vastly exceed the government 2017 social cost. We have unnecessarily small reduction given the amount of money we are spending. In contrast price of carbon would prioritize those at the highest bang for the buck. Turning to future reductions the private sector on its own will not invest enough to uncover new approaches to reduce co2 because many returns would flow to their competitors. The fact that private firms lack in r d is a market failure in the government can addresses to give subsidies for Funding Research directly. In conclusion the United States needs to have mitigating Climate Change with the climate images that are calming one coming. Using the best Available Evidence to deliver the inexpensive reductions of emissions necessary today and in the future. Thank you. You are now recognized for five minutes. Thank you and the Ranking Member of the subcommittee members for the opportunity to testify with the loss of our chairman cummings and we all miss him the agree on a great deal the pleasure of serving the last ten years of Columbia South carolina we also the proud home to fort jackson with chains a proximally 45000 soldiers per year. Climate change effects s im glad youre holding this hearing and we are especially pleased if something was to hear on the impact on local budgets and economies mayors in cities throughout the country grapple with the impacts to mitigate those impacts to make the committees more resilient to modernize the infrastructure. Therefore its our hope of a Robust National Climate Action program to bolsters the efforts that were taken that existential challenge and in columbia firsthand Climate Change is already impacting cities and infrastructure over three days with Hurricane Joaquin with 30 inches of rain in this great city. Taking the lives of south carolinians. Into rapture sewer means enclosed over 100 streets to reach multiple dams and then in the aftermath it was the resilience of mitigation and was city infrastructure. And then increased low rainfall and to show the 1969 colon the experience above 90 degrees fahrenheit. And then we expect that to double and from the hometown also the days number 90 degrees. Also manual labor so last year through june of this year the honor of representing my fellow mayors throughout the country at the council of mayors Nonpartisan Organization and then a coalition dedicated to Municipal Bonds for 100 Percent Clean Energy at a time they take renewed providence to be at the forefront of Public Policy innovation. My written testimony and submitted for the record to save millions of dollars to update infrastructure then to upgrade the Transportation System moving forward significantly and took the next step or a target a target to power the community with Renewable Energy by 2035. And us actively and with the first evergreen bonds the First Tranche in a 95 milliondollar plan and the storm water drainage issues. Local government collects about 15 percent of our nations tax revenue we are expected to deliver core Governmental Services that we all understand that make up the heart of our Civilized Society in the western world we cannot tackle the test one the task on her own we need a strong federal local partnership or the conference of mayors has issued a call to action i have included as an attachment. But that existential threat and what that means to the world and with that Economic Impact it has on the cities and thank you for your work on this major generational challenge so let me emphasize part of the reason you are here the subcommittee on the environment for oversight and this is the number one issue they are trying to tackle and in that process looking at three phases of hearings so what did we know and we already had hearings for testimony and evidence was provided showing that shell and exxon new about the impact with more Severe Weather events and to help the public as well as lawmakers to understand both the economic and human impact of Climate Change. Unfortunately it is often quite easy to figure out the human impact of Climate Change. Counting the number of people who died from that event. We also had testimony from others talking about the human impact that is more difficult to ascertain but also quite important to get to that information. So that is what we are here today to help the public understand that Climate Change or Severe Weather events creates much greater damage and Economic Impact without having