Watered Down: Hurricane Irene Renews Debates About U.S. Budget and Climate Change

Hurricane Irene killed at least 40 people, caused billions of dollars in damages, and cut power to nearly 8 million homes and businesses as the storm moved from the Caribbean through the East Coast of the United States last week. But while financial analysts and members of Congress focus on who and how much to pay for recovery, climate experts are pointing out holes in the system.

Photo courtesy Steven Hromnak via Creative Commons

While the immediate losses brought on by Hurricane Irene are likely to be smaller than predicted, analysts are warning that the Federal Emergency Management Agency (FEMA) is struggling to fund the recovery efforts, according to many news organizations. This is raising questions about how much of the damage would be covered by states and insurance companies, as well as whether Congress would approve more disaster-relief money when it returns from its August recess on September 6.

State and federal agencies are still quantifying the losses from Irene, which swept through the Dominican Republic and Puerto Rico before it spread into 11 U.S. states and Canada. While Irene largely spared New York City, the storm caused the worst flooding in decades in inland areas of New York state, New Jersey, and Vermont.

According to preliminary estimates, the hurricane destroyed or severely damaged at least 1,100 homes and caused more than $US 71 million in damages in seven North Carolina counties, Reuters reported. Power utilities are still struggling to restore electricity to millions of people, from North Carolina to Maine. The outages also temporarily disrupted operations at major oil refineries in New Jersey, Pennsylvania, Maryland, and Virginia.

Additionally, some 260 roads in Vermont — which saw its worst flooding in 80 years — remain closed, and authorities are planning to airlift food and water to towns that have been cut off by floodwaters.

Federal Estimates and Aid: Will there be enough to go around?
President Barack Obama has pledged federal disaster assistance for several hard-hit states, as well as Puerto Rico. The disaster declarations will allow FEMA to provide low-interest loans or grants to people affected by the hurricane, and these funds will help individuals to repair homes, to pay medical bills, and to rebuild businesses.

But the federal money will not cover all of the costs for state and local governments that were already scraping by on very tight budgets, Reuters reported.

Though Obama administration officials have said they have no estimate of the storm’s cost and are still assessing the damage, Standard & Poor reported that total economic losses from the disaster could reach $US 20 billion, according to Reuters. Meanwhile, catastrophe modeler AIR Worldwide has insured-loss estimates between $US 3 to 6 billion, and risk-management firm Kinetic Analysis Corporation has estimated the total damage from Hurricane Irene at $US 7 billion.

Analysts agree, however, that whatever the price tag on Irene’s damage, it would pale in comparison to 2005 and 2008, when taxpayers had to bail out FEMA after losses proved too much to handle. In 2005, the Hurricane Katrina bill totaled to roughly $US 100 billion, while 2008 saw $US 30 billion in losses inflicted by Hurricane Ike, which was the last big hurricane to reach the U.S. coast and inland areas.

Though the cost of Irene’s damage may prove to be less than Katrina’s and Ike’s, concerns are beginning to rise over FEMA’s capacity to deal with the aftermath of this hurricane, given its recent history. The agency has warned lawmakers that, in order to insure that its fund will not run out of money, FEMA has suspended or placed restrictions on long-term repair, rebuilding, and mitigation projects from previous and current disasters.

FEMA Administrator Craig Fugate, however, has dismissed concerns that the agency’s dwindling emergency aid fund would hamper recovery efforts, the Associated Press reported.

Climate Change and Congress
And while financial experts are estimating the costs associated with Irene, climate experts are questioning whether the aid and insurance industry needs a makeover. The prospects for climate change — which is already disrupting preciptation patterns and increasing the likelihood of weather extremes like floods and droughts — raises big questions about the fund’s and the insurers’ long-term preparedness and sustainability.

This year has been one of the most extreme for weather in U.S. history, with $US 35 billion in losses so far from floods, tornadoes, and heat waves. And, if climate change modeling is correct, the trend is only expected to grow worse with time.

Yet, despite the massive amount of media coverage devoted to Irene over the last two weeks, television reports have made little or no mention of the role that climate change played in the storm, Bill McKibben, co-founder and director of 350.org, told Democracy Now.

McKibben was recently arrested along with many others for protesting outside the White House against the proposed Keystone XL tar sands pipeline, an act he was doing to raise awareness about environmental pollution and climate change.

“We’ve had not only this extraordinary flooding, but, on the same day that Hurricane Irene was coming down, Houston set its all-time temperature record — 109 degrees,” McKibben said. “We’re in a new situation…There’s never been a purer test of whether or not we’re prepared to stand up to climate change.”

On Thursday, a new report by the non-profit network Ceres revealed only 11 of 88 major U.S. insurers surveyed recently have formal policies in place to deal with growing climate change risks.

“The findings are both illuminating and disillusioning,” Ceres President Mindy Lubber wrote in the report’s foreword. “While the survey revealed a broad consensus among insurers that climate change will have an effect on extreme weather events, few insurers were able to articulate a coherent plan to manage the risks and opportunities associated with climate change.”

The costs associated with Hurricane Irene have also rekindled a battle in Congress over the handling of the national deficit and budget spending. Republican senators are demanding that federal aid for post-Irene disaster relief be offset by spending cuts elsewhere, while Democrats are promising they won’t cut other programs to boost emergency aid.

In June, the Republican-controlled House of Representatives passed a bill that would give FEMA an additional $US 1 billion in disaster-relief funding for the current fiscal year, which ends on September 30, as well as $US 2.65 billion for the next fiscal year. But that document, yet to be approved by the Senate, would require the Obama administration to slash other government programs if there became a need for more disaster-relief money — a provision the White House has has said it would ignore.

Senate Democrats have pledged to seek more disaster-recovery funds as soon as Congress resumes work on September 6. Additionally, the Senate Homeland Security Appropriations Subcommittee has announced a vote on its own funding bill, which will differ significantly from the House-passed version.

Sources: Bloomberg, Democracy Now, FEMA, The Hill, Reuters