Climate Resilience: A Strategic Investment Approach for High-Priority Projects Could Help Target Federal Resources

Federal funding for disaster assistance since 2005 has totaled at least $450 billion, including a 2019 supplemental appropriation of $19.1 billion for recent disasters. In 2018 alone, 14 separate billion-dollar weather and climate disaster events occurred across the United States, with total costs of at least $91 billion including the loss of public and private property, according to the National Oceanic and Atmospheric Administration. Disaster costs will likely increase as certain extreme weather events become more frequent and intense due to climate change, according to the U.S. Global Change Research Program, a global change research coordinating body that spans 13 federal agencies. In 2013, GAO included “Limiting the Federal Government's Fiscal Exposure by Better Managing Climate Change Risks” on its list of federal program areas at high risk of fraud, waste, abuse, mismanagement, or most in need of transformation.

The cost of recent weather disasters has illustrated the need to plan for climate change risks and invest in climate resilience. Investing in climate resilience can reduce the need for far more costly steps in the decades to come.

The Disaster Recovery Reform Act of 2018 provides one potential source of funding for climate resilience projects. In particular, it allows the President to set aside up to 6 percent of the estimated aggregate amount of grants from certain programs under a major disaster declaration to implement pre-disaster hazard mitigation activities. Officials estimate funds for the related program will average $300 million to $500 million annually.

GAO was asked to review the federal approach to prioritizing and funding climate resilience projects that address the nation's most significant climate risks. This report examines (1) the extent to which the federal government has a strategic approach for investing in climate resilience projects; (2) key steps that provide an opportunity to strategically prioritize projects for investment; and (3) the strengths and limitations of options for focusing federal funding on these projects.

GAO reviewed relevant reports and interviewed 35 stakeholders with relevant expertise, including federal officials, researchers, and consultants. In addition, during the course of this work, GAO identified domestic and international examples of governments that invest in climate resilience and related projects. GAO selected two of these examples for in-depth review and presentation in the report: the state of Louisiana's coastal master planning effort and Canada's Disaster Mitigation and Adaptation Fund.

The federal government has invested in projects that may enhance climate resilience, but it does not have a strategic approach to guide its investments in high-priority climate resilience projects. Enhancing climate resilience means taking actions to reduce potential future losses by planning and preparing for potential climate hazards such as extreme rainfall, sea level rise, and drought. Some federal agencies have made efforts to manage climate change risk within existing programs and operations, and these efforts may convey climate resilience benefits. For example, the U.S. Army Corps of Engineers' civil works program constructs flood control projects, such as sea walls, that may enhance climate resilience. However, additional strategic federal investments may be needed to manage some of the nation's most significant climate risks because climate change cuts across agency missions and presents fiscal exposures larger than any one agency can manage. GAO's analysis shows the federal government does not strategically identify and prioritize projects to ensure they address the nation's most significant climate risks. Likewise, GAO's past work shows an absence of government-wide climate change strategic planning.

As of August 2019, no action had been taken to implement 14 of GAO's 17 recommendations to improve federal strategic planning for climate resilience. GAO's enterprise risk management framework calls for reviewing risks and selecting the most appropriate strategy to manage them. However, no federal agency, interagency collaborative effort, or other organizational arrangement has been established to implement a strategic approach to climate resilience investment that includes periodically identifying and prioritizing projects. Such an approach could supplement individual agency climate resilience efforts and help target federal resources toward high-priority projects.

Six key steps provide an opportunity for the federal government to strategically identify and prioritize climate resilience projects for investment, as GAO found based on its review of prior GAO work, relevant reports, and stakeholder interviews (see figure).

GAO identified one domestic and one international example to illustrate these key steps: Louisiana's Coastal Protection and Restoration Authority (CPRA) coastal master planning effort and Canada's Disaster Mitigation and Adaptation Fund (DMAF).

In the domestic example, in 2005 the Louisiana legislature consolidated coastal planning efforts previously carried out by multiple state entities into a single effort led by CPRA to address the lack of strategic coordination. CPRA periodically identifies high-priority coastal resilience projects designed to address two primary risks: flooding and coastal land loss. To identify potential projects, CPRA sought project proposals from citizens, nongovernmental organizations, and others. To prioritize projects, CPRA used quantitative modeling to estimate project outcomes under multiple future scenarios of varied climate and other conditions and coordinated with stakeholders to understand potential project impacts. In 2017, CPRA identified $50 billion in high-priority projects to be implemented as funds become available.

In the international example, in 2018, the Canadian government launched the DMAF, a financial assistance program to provide US$1.5 billion over 10 years for large-scale, nationally significant projects to manage natural hazard risks, including those triggered by climate change. Infrastructure Canada, the entity responsible for administering the DMAF, seeks project ideas from provinces and territories, municipal and regional governments, indigenous groups, and others. These entities apply directly to Infrastructure Canada for funding. According to Canadian officials, two committees of experts—one composed of experts from other federal departments and the other composed of nonfederal experts (e.g., urban planners and individuals with regional expertise)—provide feedback on potential projects. These projects are prioritized based on multiple criteria such as the extent to which they reduce the impacts of natural disasters.

On the basis of GAO's review of relevant reports and past GAO work, interviews with stakeholders, and illustrative examples, GAO identified two options—each with strengths and limitations—for focusing federal funding on high-priority climate resilience projects. The options are (1) coordinating funding provided through multiple existing programs with varied purposes and (2) creating a new federal funding source specifically for investment in climate resilience.

A strength of coordinating funding from existing sources is access to multiple funding sources for a project. For example, one stakeholder GAO interviewed—whose community used federal funding to implement large-scale resilience projects—said that having multiple programs is advantageous because when funding from one program is not available—such as when the project does not match that program's purpose or when there are insufficient funds—funds could be sought from another program. A limitation of that option, according to CPRA officials, is that coordinating funding from multiple sources could be administratively challenging and could require dedicated staff to identify programs, assess whether projects meet program funding criteria, apply for funds, and ensure program requirements are met. Alternatively, one strength of a new federal funding source is that it could encourage cross-sector projects designed to achieve benefits in multiple sectors. For example, according to one stakeholder, such a funding source could allow experts from multiple sectors—such as infrastructure, housing, transportation, and health—to collaborate on projects, leading to more creative, comprehensive approaches to enhance community resilience. However, such a new funding source would have to be created, which would require Congressional authorization.

In addition, GAO identified opportunities to increase the climate resilience impact of federal funding options. For example, a federal resilience investment effort presents an opportunity to encourage several types of complementary resilience activities by nonfederal actors such as states, localities, and private-sector partners. In this example, the federal government could require or provide incentives for communities to use and enforce climate-resilient building codes or limit development in high-risk areas through zoning regulations.

Congress should consider establishing a federal organizational arrangement to periodically identify and prioritize climate resilience projects for federal investment. Such an arrangement could be designed using the six key steps for prioritizing climate resilience investments and the opportunities to increase the climate resilience impact of federal funding options that are identified in this report.

The Federal Emergency Management Agency and two federal coordinating bodies reviewed a draft of this report and provided technical comments, which GAO incorporated as appropriate.

Since 2005, federal funding for disaster assistance has totaled at least  $450 billion, including a supplemental appropriation of $19.1 billion for  recent disasters that was signed into law on June 6, 2019. In 2018 alone,  14 separate billion-dollar weather and climate disaster events occurred  across the United States, with a total cost of at least $91 billion, according  to the National Oceanic and Atmospheric Administration. The U.S.  Global Change Research Program (USGCRP) projects that disaster costs  will likely increase as certain extreme weather events become more  frequent and intense due to climate change. The rising number of natural  disasters and increasing reliance on the federal government for  assistance is a key source of federal fiscal exposure. Our work over the  last decade has pointed to a key federal role in recognizing and managing  climate risks to limit such fiscal exposure. In 2013, we added “Limiting  the Federal Government’s Fiscal Exposure by Better Managing Climate  Change Risks” as an area on our high-risk list—a list of federal programs  and operations at risk of fraud, waste, abuse, and mismanagement or that  need transformation to address economy, efficiency, or effectiveness  challenges.

Greenhouse gases already in the atmosphere are expected to continue to  alter the climate system into the future, regardless of efforts to control  emissions, according to USGCRP and the National Academies of  Sciences, Engineering, and Medicine (the National Academies). As a  result, limiting the federal government’s fiscal exposure to climate change  risks will be challenging. The cost of recent weather disasters has  illustrated the need to plan for climate change risks and consequences  and to invest in climate resilience. We have previously reported that  while it is not possible to link any individual weather event to climate  change, these events provide insight into the potential climate-related  vulnerabilities the United States faces.

Enhancing climate resilience means taking actions to reduce potential  future losses by planning and preparing for potential climate hazards such  as extreme rainfall, sea level rise, and drought. Investing in resilience can  reduce the need for far more costly steps in the decades to come;  therefore, we and others have recommended enhancing climate  resilience to help limit the federal government’s fiscal exposure to climate  change. For example, in September 2018, we reported that elevating  homes and strengthening building codes—two distinct efforts to enhance  resilience—in Texas and Florida prevented greater damages during the  2017 hurricane season. Enhancing climate resilience can cost additional  money up front, which may limit resources for other federal priorities, but  it can also reduce potential future damage from climate-related events  that would otherwise constrain federal programs.

Many current and future climate change impacts require immediate  actions; therefore, climate resilience efforts need to be focused where  urgent action is needed, according to the National Academies. In  addition, while it will not be possible to eliminate all risks associated with  climate change, if the nation prioritizes federal climate risk management  activities, it may be possible to minimize negative impacts and maximize  the opportunities associated with climate change, according to the  National Academies. In September 2017, we recommended that the  appropriate entities within the Executive Office of the President use information on the potential economic effects of climate change to help  identify and craft appropriate federal responses to significant climate risks  facing the federal government. Such responses could include  establishing a strategy to identify, prioritize, and guide federal  investments to enhance resilience against future disasters. The Executive  Office of the President neither agreed nor disagreed with our  recommendation and as of August 2019 had not implemented it.

Planning for federal investments in climate resilience projects to limit  fiscal exposure is no longer a hypothetical issue. The Disaster Recovery  Reform Act of 2018 (DRRA), enacted in October 2018, provides one  potential source of funding for climate resilience projects. The act allows  the President to set aside up to 6 percent of the estimated aggregate  amount of grants from certain emergency programs under a major  disaster declaration to implement pre-disaster hazard mitigation  activities. The Federal Emergency Management Agency (FEMA) will  administer the associated program—the Building Resilient Infrastructure  and Communities program. As of August 2019, FEMA had not yet  developed program guidance, although the agency has sought input from  the public on program design. FEMA officials estimate annual funds for  the program will average $300 million to $500 million.

Other legislation to fund climate resilience activities has been introduced  in Congress but has not been enacted. For example, the Climate Change  Resiliency Fund for America Act of 2019, introduced in the House of  Representatives and the U.S. Senate in March 2019, would create a fund  that would provide financial assistance for climate adaptation projects  including infrastructure resiliency projects intended to reduce the  economic, social, and environmental impacts of the adverse effects of  climate change.

You asked us to review the federal approach to prioritizing and funding  climate resilience projects that address the nation’s most significant  climate risks. This report examines (1) the extent to which the federal  government has a strategic approach for investing in climate resilience  projects; (2) key steps that provide an opportunity for the federal  government to strategically identify and prioritize climate resilience  projects for federal investment; and (3) the strengths and limitations of  options for focusing federal funding on high-priority climate resilience  projects.

For all three objectives, we interviewed 35 stakeholders—including  federal agency officials, researchers, and consultants—with expertise in  climate resilience and related fields. We identified these stakeholders  through a review of related reports and snowball sampling based on the  stakeholders’ expertise related to our objectives. Because this is a  nonprobability sample, our findings cannot be generalized to other  stakeholders we did not interview. Rather, these interviews provided us  with illustrative examples for our three objectives. We use the term  “several” to represent three or more stakeholders or reports expressing a  particular viewpoint. To determine the extent to which the federal  government has a strategic approach for investing in climate resilience  projects, we reviewed our past work on federal efforts related to climate  resilience and climate change funding; Congressional Research Service  and Congressional Budget Office reports; and reports from the Council on  Climate Preparedness and Resilience, USGCRP, and other sources. We  also reviewed the National Mitigation Investment Strategy—a national  strategy for mitigating natural hazards. We interviewed staff from  USGCRP—the federal program mandated by Congress to coordinate  federal climate change research and prepare the National Climate  Assessment. We also interviewed officials from FEMA, which chairs the  Mitigation Framework Leadership Group, an interagency group that  developed the National Mitigation Investment Strategy under Presidential  Policy Directive 8.

To identify key steps that provide an opportunity for the federal  government to strategically prioritize climate resilience projects for federal  investment, we reviewed approximately 50 reports and other sources,  several of which contained examples of potential criteria the federal  government could consider when prioritizing these projects. We reviewed  our prior work on risk management, climate change, climate resilience,  and hazard mitigation, including our Disaster Resilience Framework and  our past work on enterprise risk management. We also identified  domestic and international examples of governments that invest in  climate resilience and related projects. We selected an example of each  for more in-depth review and presentation in the report—the state of  Louisiana’s coastal master planning effort and the country of Canada’s  Disaster Mitigation and Adaptation Fund (DMAF)—because they focus on  projects that are large in scale, are of national or statewide significance,  and have a strategic approach for identifying and prioritizing projects, among other factors. To examine the strengths and limitations of options  for focusing federal funding on high-priority climate resilience projects, we  identified examples of the strengths and limitations of federal funding  options in several of the reports we mentioned above. We also  interviewed stakeholders to discuss the strengths and limitations of  options the federal government could use to fund climate resilience  projects. For additional details on our scope and methodology, see  appendix I.

We conducted this performance audit from January 2018 to October 2019  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

This section describes (1) U.S. climate risks and related impacts, (2)  enhancing climate resilience using a risk management strategy, (3)  GAO’s Disaster Resilience Framework, and (4) benefits and costs of  climate resilience projects.

Climate change poses risks to many U.S. environmental and economic  systems, according to USGCRP’s Fourth National Climate Assessment.  For example, high temperature extremes, heavy precipitation events,  high-tide flooding events along the U.S. coastline, ocean acidification and  warming, and forest fires in the western United States and Alaska have  been observed and are all projected to continue to increase. In contrast,  land and sea ice cover, snowpack, and surface soil moisture have been  declining and are expected to continue to decline in the coming  decades. Climate change is also altering the characteristics of many  extreme weather and climate-related events, according to the Fourth  National Climate Assessment. Some of these events have already  become more frequent, intense, widespread, or of longer duration, and  many are expected to continue to increase or worsen. Furthermore,  according to the assessment, many places are subject to more than one  climate-related impact. Examples include extreme rainfall combined with  coastal flooding, or drought coupled with extreme heat. The compounding  effects of these impacts result in increased risks to people, infrastructure,  and interconnected economic sectors.

According to the Fourth National Climate Assessment, without significant  reductions in global greenhouse gas emissions and regional efforts to  pursue climate resilience, climate change is expected to cause  substantial losses to infrastructure and property and impede the rate of  economic growth over this century. The potential for losses in some  economic sectors could reach hundreds of billions of dollars per year by  the end of this century, according to the assessment.

Future climate risks are subject to several sources of uncertainty, as  identified by USGCRP’s Fourth National Climate Assessment. According  to the assessment, climate scientists find varying ranges of uncertainty in  many areas, including observations of climate variables, the analysis and  interpretation of those measurements, the development of new  observational instruments, and the use of computer-based models of the  processes governing Earth’s climate system. According to the  assessment, the largest uncertainty in projecting future climate risks is the  level of greenhouse gas emissions going forward, because the level of  emissions depends on economic, political, and demographic factors that  can be difficult to predict with confidence far into the future.

Enhancing Climate Resilience Using a Risk Management Strategy

According to the Fourth National Climate Assessment, enhancing climate  resilience entails a continuing risk management process through which  individuals and organizations become aware of and assess risks and  vulnerabilities from climate and other drivers of change, take actions to  reduce those risks, and learn over time. In December 2016, we reported  on a risk management strategy that may help guide federal climate  resilience efforts. Enterprise risk management can help federal  agencies identify, assess, and manage risks, such as preparing for and  responding to natural disasters. In our report, we identified six essential  elements of enterprise risk management: (1) aligning the enterprise risk  management process to goals and objectives, (2) identifying risks, (3)  assessing risk, (4) selecting a risk response based on risk appetite, (5)  monitoring risks to see if responses are successful, and (6)  communicating and reporting on risks. For example, we reported that  assessing risks involves considering both the likelihood of the risk and the  impact of the risk on the mission to help prioritize risk response. We also  reported that selecting a risk treatment response involves leaders  reviewing the prioritized list of risks and selecting the most appropriate  treatment strategy to manage the risk.

In October 2019, we issued the Disaster Resilience Framework to serve  as a guide for analysis of federal action to facilitate and promote  resilience to natural disasters. The principles in this framework can help  identify opportunities to enhance federal efforts to promote disaster  resilience, including building resilience to climate change. According to  the framework, strategic resilience goals integrated across relevant  national strategies can help decision makers work toward a common  vision and help ensure focus on a wide variety of opportunities to reduce  disaster risk. Federal efforts can focus attention on disaster risk reduction  by creating resilience goals in all relevant national strategies and linking  those goals to an overarching strategic vision. Federal efforts can also  facilitate coordination and promote governance approaches that mitigate  fragmentation by requiring or funding mechanisms to enhance the  continuity of different efforts across jurisdictions. In addition, because  much of the nation’s infrastructure is not owned and operated by the  federal government, many resilience-related decisions ultimately are  made by nonfederal actors, such as the states, and those decision  makers face competing priorities. Incentives—in the form of federal  regulatory requirements or as conditions of federal grant programs and  cooperative agreements—can help promote investment in disaster risk  reduction. As shown in figure 1, the framework is organized around three  broad overlapping principles and a series of questions to guide analysis  that can help users consider opportunities to enhance federal efforts to  promote disaster resilience.

Each of the principles includes more specific sets of actions that those  who oversee or manage federal efforts can consider when analyzing  opportunities to enhance national disaster resilience. For example,  according to the framework, bringing together disparate agency missions  and resources that support disaster risk reduction can help to build a  national culture of resilience. Accordingly, federal efforts can (1) facilitate  coordination across programs, (2) facilitate the combination of federal  funding streams, and (3) leverage the expertise of nonfederal partners.

Benefits and Costs of Climate Resilience Projects

Information on the benefits and costs of climate resilience projects  suggests that such projects can convey benefits, such as protecting life  and property from climate hazards, according to the Fourth National  Climate Assessment and other reports we reviewed. According to the  Fourth National Climate Assessment, information on benefits is lacking in  many sectors, though some information exists on the benefits and costs  of resilience efforts in certain sectors, such as resilience efforts in coastal  areas, resilience efforts designed to protect against riverine flooding (i.e.,  flooding that occurs when river flows exceed the capacity of the river  channel), and resilience efforts related to agriculture at the farm level.  According to this assessment, some of the actions in these sectors, at  least in some locations, appear to have large benefit-cost ratios—both in  addressing current variability and in preparing for future change.  However, benefits may not exceed costs in some instances. According to  the Fourth National Climate Assessment, more research is needed to  comprehensively assess the benefits of specific strategies that individuals  and organizations are considering.

Similarly, several other reports we reviewed also suggest that projects  can convey benefits such as protecting life and property from climate  hazards. For example, a 2018 interim report by the National Institute of  Building Sciences estimated that benefits to society (i.e., homeowners  and communities) would exceed costs for several types of resilience  projects by protecting lives and property and preventing other losses,  though precise benefits are uncertain. Specifically, this interim report  examined a sample of hazard mitigation grants awarded by FEMA, the  Economic Development Administration, and the Department of Housing  and Urban Development (HUD) from 1993 through 2016 to address  various hazards. These hazards included fires in the wildland-urban  interface (i.e., fires in areas where homes are built near or among lands  prone to wildland fire), hurricane- and tornado-force winds, and riverine  floods. According to the interim report, for every grant dollar the federal  government spent across the projects examined in the report, over time,  society is estimated to accrue benefits amounting to the following:

About $3 on average from projects addressing the effects of fire in the  wildland-urban interface, with most benefits (approximately 70  percent) coming from the protection of property (i.e., avoiding property  losses).

About $5 on average from projects to address hurricane- and tornado- force winds, with most benefits (approximately 90 percent) coming  from the protection of lives. This includes avoiding deaths, nonfatal  injuries, and cases of post-traumatic stress.

About $7 on average from projects that buy out buildings prone to  riverine flooding, with most benefits (approximately 65 percent)  coming from the protection of property.

The interim report also projected that society could accrue benefits  amounting to about $11 on average for every dollar invested in designing  new buildings to meet the 2018 International Building Code and the 2018  International Residential Code—the model building codes developed by  the International Code Council—with most benefits (about 45 percent)  coming from the protection of property. The interim report has been  cited by the Congressional Budget Office, in congressional hearings, and  in other arenas to describe the benefits of investing in resilience.  However, the benefit-cost ratios provided in the interim report are based  on a relatively narrow set of disaster-loss data, and the report is not  comprehensive.

In addition to conveying climate resilience benefits, such as protecting  lives and property, climate resilience projects can also convey co- benefits—benefits beyond the primary protective function of resilience  projects—according to the Fourth National Climate Assessment and  several reports we reviewed. For example, according to a report by the  National Academies, restoring coastal wetlands—a type of nature-based  resilience project—may reduce an area’s vulnerability to coastal storms  but could also provide co-benefits such as increasing biodiversity by  creating new breeding grounds for fish and improving recreation and  tourism amenities, thereby expanding the total potential benefits of a  project. USGCRP officials we interviewed also told us that projects can convey a broad range of other co-benefits, including improvements in  economic opportunity, human health, equity, and national security.  However, according to the Fourth National Climate Assessment,  quantifying these co-benefits can be difficult because different people  value benefits differently.

Several factors can influence the likelihood that the benefits from  resilience projects exceed the cost of implementing and maintaining the  projects. For example, benefits from climate resilience projects  implemented in high-risk locations, such as areas more exposed to  hurricanes, are likely to be higher and therefore exceed project costs than  projects implemented in other, lower-risk areas, according to one report  we reviewed. Similarly, projects that protect high-value assets may also  be more likely to have benefits that exceed costs, according to this report.  Several factors that affect the extent to which project benefits exceed  costs remain uncertain, according to several reports. For example,  according to the Fourth National Climate Assessment, benefit–cost ratios  can have large uncertainties associated with estimates of costs, the  projection of benefits, and the economic valuation of benefits.  Furthermore, according to the assessment, the benefits and costs of  resilience projects are larger in scenarios with high emissions, but the  level of future emissions remains uncertain.

The Federal Government Has Invested in Projects That May Convey Some Climate Resilience Benefits but Does Not Have a Strategic Investment Approach

Individual federal agencies have provided ad hoc funding for projects that  may convey some climate resilience benefits, but our past work  demonstrates an absence of government-wide strategic planning for  climate change, and the federal government has not implemented key  recommendations to improve strategic planning for climate resilience. In  addition, the federal government does not have a strategic federal  approach for investing in the highest priority climate resilience projects  that includes periodically identifying and prioritizing projects as supported  by enterprise risk management practices and our Disaster Resilience  Framework.

The Federal Government Has Invested in Projects That May Convey Some Climate Resilience Benefits

Federal Mainstreaming Efforts   Some agencies have made efforts to manage  climate change risk within existing programs  and operations—a concept known as  mainstreaming—and these efforts may  convey climate resilience benefits. For  example, an agency planning to build a  seawall to protect a coastal facility might build  it higher to account for rising sea level  projections. Alternatively, the U.S. military  may consider climate change as part of  existing construction plans on coastal  installations by, for example, raising a building  to include a “sacrificial” first floor and  protecting critical assets—such as computer  servers—from potential flooding by locating  them on the building’s higher floors. The  agency may use the sacrificial floor for  parking.   According to the U.S. Global Change  Research Program’s Fourth National Climate  Assessment, a significant portion of climate  risk can be addressed by mainstreaming,  which can provide many climate resilience  benefits. However, according to the  assessment, the practice may prove  insufficient to address the full range of climate  risks.   Additional, strategic federal investments in  large-scale projects—such as those  discussed in our report—may also be needed  to manage some of the nation’s most  significant climate risks, since climate change  cuts across agency missions and poses fiscal  exposures larger than any one agency can  manage. aim to reduce flooding and storm damage. These and other projects  have the potential to convey climate resilience benefits by protecting  communities from damage from flooding, storms, and other extreme  weather events that may be exacerbated by climate change. The  Corps of Engineers’ policy is to integrate climate change  preparedness and resilience in all activities—a concept known as  mainstreaming. However, the Corps’ civil works program balances  several diverse missions related to navigation, ecosystems  management, and flood control, among others. As a result, while  projects may individually incorporate consideration of climate change  risk and resilience, they may not be prioritized to address the most  severe expected future climate change risks.

Even with ad hoc agency efforts, federal investment in projects  specifically designed to enhance climate resilience to date has been  limited. As stated in our Disaster Resilience Framework, most of the  federal government’s efforts to reduce disaster risk are reactive, and  many revolve around disaster recovery. To a lesser extent, the federal  government also invests in activities to reduce risks not associated with a  specific, recent disaster. As we reported in April 2018, since 1993 OMB  has reported more than $154 billion spread across the government for  federal activities to understand and address climate change. However,  over that time frame, OMB reported only minimal funding directed  specifically at climate resilience projects.

Our Past Work Shows an Absence of Government-wide Strategic Planning for Climate Change

We have issued multiple reports that review the federal government’s  approach to addressing climate change, and these reports demonstrate  an absence of government-wide strategic planning for climate change.  Specifically, our past work identifies limitations related to strategic  planning for climate change that include a lack of coordination,  prioritization, and consolidation of strategic priorities. For example, we  reported in October 2009 that the federal government’s emerging climate  resilience activities were carried out in an ad hoc manner and were not  well coordinated across federal agencies. In May 2011, we reported that  federal officials did not have a shared understanding of strategic  government-wide priorities related to climate change. In the same  report, we found that there was not a consolidated set of strategic  priorities integrating climate change programs and activities across the  federal government.

In our March 2019 high-risk update, we reported that one area of  government-wide action needed to reduce federal fiscal exposure is in the  federal government’s role as the leader of a strategic plan that  coordinates federal efforts and informs state, local, and private-sector  action. For this 2019 high-risk update, we assessed the federal  government’s progress since 2017 related to climate change strategic  planning against five criteria and found that the federal government had  not met any of the criteria for removal from the high-risk list. Specifically,  since GAO’s 2017 high-risk update, four ratings regressed to “not met”  and one remained unchanged as “not met.” (See fig. 2). We have made  62 recommendations related to the climate change high-risk area, 17 of  which address improving federal climate change strategic planning. As of  August 2019, no action had been taken toward 14 of those 17  recommendations—one dating back to 2003.

Executive Order 13783, Promoting Energy Independence and Economic Growth (Mar. 28, 2017).  Executive Order 13653, Preparing the United States for the Impacts of Climate Change (revoked)  (Nov. 6, 2013).  Executive Order 13834, Efficient Federal Operations (May 17, 2018). Executive Order 13693,  Planning for Federal Sustainability in the Next Decade (revoked) (Mar. 19, 2015).  The Mitigation Framework Leadership Group, an intergovernmental coordinating body, finalized the  National Mitigation Investment Strategy in August 2019. However, as noted, our review of the  strategy indicates that it does not include a detailed strategic approach to prioritize investments for  disaster risk reduction that explicitly accounts for future climate change risks. According to FEMA  officials, the strategy sets goals and recommendations that set the stage for developing approaches  to address changing conditions.  GAO, Climate Change: Improvements Needed to Clarify National Priorities and Better Align Them  with Federal Funding Decisions, GAO-11-317 (Washington, D.C.: May 20, 2011); Climate Change:  Information on Potential Economic Effects Could Help Guide Federal Efforts to Reduce Fiscal  Exposure, GAO-17-720 (Washington, D.C.: Sept. 28, 2017); and Climate Change: Analysis of  Reported Federal Funding, GAO-18-223 (Washington, D.C.: Apr. 30, 2018).  GAO, High-Risk Series: Substantial Efforts Needed to Achieve Greater Progress on High-Risk  Areas, GAO-19-157SP (Washington, D.C.: Mar. 6, 2019).

The Federal Government Does Not Have a Strategic Approach for Investing in Climate Resilience Projects

The federal government does not have a strategic approach for investing  in climate resilience projects—that is, an intentional, cross-cutting  approach in which the federal government identifies and prioritizes  projects for the purpose of enhancing climate resilience. Federal  agencies may take actions to invest in projects with potential climate  resilience benefits related to their own mission areas using funds from  federal programs designed for other purposes. In addition, the National  Climate Assessment provides high-level information on what is known  about observed and projected climate risks in the United States.  However, no federal entity looks holistically at the federal government’s  investments to strategically prioritize projects to ensure they address the  nation’s most significant climate risks and provide the highest net benefits  relative to other potential projects. Several stakeholders told us that the  federal government’s emphasis has been on funding post-disaster efforts  instead of funding resilience projects before a disaster occurs. This is  consistent with findings from our July 2015 report that most federal  funding for hazard mitigation is only available after a disaster. In  addition, according to FEMA officials, some of the agency’s hazard  mitigation programs are designed to empower state and local  governments to determine their mitigation funding priorities, and these  state and local priorities may or may not align with the federal interest.

Although we did not identify a government-wide strategic approach  specifically for investing in climate resilience projects, the National  Mitigation Investment Strategy—a national effort under way to plan for  pre-disaster resilience investments—represents a potential cross-agency  vehicle for climate resilience planning. However, the strategy does not  specifically address climate change or identify and prioritize specific  climate resilience projects. In July 2015, we recommended that the  Mitigation Framework Leadership Group—a multi-agency group led by  FEMA to promote coordination of hazard mitigation efforts across the  federal government—establish an investment strategy to identify,  prioritize, and guide federal investments in disaster resilience and hazard  mitigation-related activities and make recommendations to the President  and Congress on how the nation should prioritize future disaster  resilience investments. In response, in August 2019, the Mitigation  Framework Leadership Group released a national strategy for advancing  mitigation investment in the United States and increasing the nation’s  resilience to natural hazards. The strategy acknowledges our 2015  recommendation and articulates several high-level recommendations that  relate generally to climate resilience, including aligning program  requirements and incentives. Specifically, the strategy states that  successful risk mitigation requires shared priorities, consistent  approaches, aligned funding, expanded incentives, and coordination  between the federal government and nonfederal partners (i.e., state,  local, tribal, and territorial governments and nonfederal organizations).  However, the strategy does not explicitly address future climate change  risks or include a strategic approach to identify and prioritize specific  climate resilience projects for federal investment. According to FEMA  officials, the strategy provides an overarching framework that can  accommodate strategic investment related to changing conditions that  impact disaster resilience. FEMA officials also told us that specific  implementation strategies will be addressed in a later phase of the high- level strategy.

A Strategic Approach for Identifying and Prioritizing Resilience Projects Could Better Target Federal Investment at the Greatest Climate Risks

While current federal climate resilience investments are ad hoc and not  aligned with the nation’s most significant climate risks, our past work and  other sources show that an iterative and strategic risk-informed approach  for identifying and prioritizing climate resilience projects could better  target federal investment. In particular, in December 2016, we reported  that enterprise risk management—which involves identifying and  assessing risks, as well as preparing appropriate risk responses—can  help federal agencies manage risks, such as preparing for and  responding to natural disasters. Elements of enterprise risk  management call for reviewing a prioritized list of risks and selecting the  most appropriate strategy to manage those risks. Furthermore, according  to our 2019 Disaster Resilience Framework, the integration of strategic  resilience goals across relevant national strategies can help decision  makers work toward a common vision and help ensure focus on a wide  variety of opportunities to reduce disaster risk. For example, our  framework states that in some cases federal efforts have been hindered  by multiple agencies pursuing individual efforts without overarching  strategies. In addition, the National Academies highlights the importance  of an iterative approach to prioritizing climate resilience actions.  According to the National Academies, many current and future climate  change impacts require immediate actions to improve the nation’s ability  to adapt, and possible options need to be prioritized based on where and  when urgent action is needed. In addition, because knowledge about  future impacts and effectiveness of response options will evolve, policy  decisions to manage climate change risks can be improved if they are  made in an iterative fashion, according to the National Academies.

However, no federal entity has been established to implement a strategic  investment approach for climate resilience that includes identifying and  prioritizing projects for federal investment in an iterative fashion.  According to FEMA officials, without Congressional direction, no federal  entity will identify and prioritize climate resilience projects for federal  investment because existing federal programs are not designed to serve  this purpose. Furthermore, investments by federal agencies are made  according to their missions and operations within the federal investment  guidelines put forth by OMB, according to officials from the Mitigation  Framework Leadership Group. These officials explained that by law,  agencies cannot make other investments, which hinders a more  formalized climate resilience investment strategy at the agency level.

Several stakeholders told us that a strategic approach would allow for a  more purposeful, coordinated, and comprehensive federal response to  climate risks. Such an approach could help target federal resources  toward high-priority projects—namely, those that address the nation’s  most significant climate risks and provide the greatest expected net  benefits relative to other potential projects—that are not already  addressed through existing federal programs. In particular, a strategic  and iterative risk-informed approach for identifying and prioritizing climate  resilience projects for federal investment could supplement the agency- specific approaches to climate resilience investment currently carried out  by individual agencies with different statutes, goals, constituencies, and  funding streams. Such an approach presents an opportunity to enhance  the nation’s resilience to climate change and reduce federal fiscal  exposure.

Six Key Steps Provide an Opportunity for the Federal Government to Strategically Identify and Prioritize Climate Resilience Projects

Six key steps provide an opportunity for the federal government to  strategically identify and prioritize climate resilience projects, based on  our review of reports (including a National Academies report and the  Fourth National Climate Assessment) that discuss adaptation as a risk  management process, international standards, our past work (including  our enterprise risk management criteria), and interviews with  stakeholders. The six key steps are (1) defining the strategic goals of  the climate resilience investment effort and how the effort will be carried  out, (2) identifying and assessing high-risk areas for targeted resilience  investment, (3) identifying potential project ideas, (4) prioritizing projects,  (5) implementing high-priority projects, and (6) monitoring projects and  climate risks. See Figure 3.

We use domestic and international examples—the Louisiana coastal  master planning effort and the Canadian Disaster Mitigation and  Adaptation Fund (DMAF), respectively—and the aforementioned sources  to illustrate the six key steps for identifying and prioritizing climate  resilience projects (see text box).

Domestic and International Examples of Approaches for Identifying and  Prioritizing Climate Resilience Projects   Two efforts—the Louisiana coastal master planning effort and the Canadian Disaster  Mitigation and Adaptation Fund—illustrate approaches for identifying and prioritizing  resilience projects. The scale and purpose of each of these approaches is distinct, but  both seek to identify projects that help enhance community resilience to several  emerging risks, including risks associated with climate change.

Louisiana coastal master planning process: In 2005, the state of  Louisiana consolidated coastal planning efforts previously carried out by  multiple state and local entities into a single effort carried out by the Coastal  Protection and Restoration Authority (CPRA). In this effort, CPRA periodically  identifies high-priority coastal resilience projects designed to reduce flood risk  and coastal land loss. With involvement from stakeholders from private  industry and local communities, CPRA has published three coastal master  plans in which it identified and evaluated potential projects. In Louisiana’s  2017 Comprehensive Master Plan for a Sustainable Coast, CPRA identified  $50 billion in high-priority projects to be implemented as funding becomes  available.

Canadian Disaster Mitigation and Adaptation Fund: In 2018, the federal  government of Canada launched the Disaster Mitigation and Adaptation Fund  (DMAF), which seeks to enhance resilience by addressing the potential  impacts of climate change in Canada. Canada’s DMAF is a financial  assistance program that provides funds to other entities (e.g., Canadian  provinces and territories, not-for-profit and for-profit organizations, local  governments, and indigenous communities) for implementation. This US$1.5  billion fund will provide contributions over 10 years for large-scale, nationally  significant projects that address a myriad of risks triggered by natural hazards  such as floods, wildfires, and droughts. The DMAF also encourages  partnerships between eligible recipients, according to a DMAF official.  Canada’s DMAF effort is under way.

Step 1. Define the Climate Resilience Investment Effort’s Strategic Goals and How the Effort Will Be Carried Out

Reports, our past work, stakeholders, and our examples from Louisiana  and Canada illustrate the importance of several steps to define the  climate resilience investment effort, including defining the efforts’ strategic  goals, designating an entity and providing authority for it to lead the effort,  identifying participants and defining responsibilities, and determining how  the effort will be funded.

Defining the Strategic Goals of the Effort

Clear strategic goals can yield more effective decisions about which  projects to prioritize and increase the likelihood that projects are  strategically aligned around a common purpose. In October 2011, we  reported that strategic goals explain the purpose of agency programs and  the results that they intend to achieve. Our domestic and international  examples also demonstrate the importance of having defined strategic  goals. Specifically, Louisiana’s Coastal Protection and Restoration  Authority (CPRA) defined five goals to guide its coastal master planning  effort: reducing economic losses to homes and business from storm  surge-based flooding, promoting sustainable coastal ecosystems,  providing habitats for a variety of commercial and recreational activities  across the coast, sustaining coastal Louisiana’s cultural heritage, and  maintaining a viable working coast to support businesses and industry.  The goal of Canada’s DMAF is to strengthen the resilience of Canadian  communities through investments in large-scale infrastructure projects of  national importance—including natural infrastructure projects—enabling  these communities to better manage the risk associated with current and  future natural hazards such as floods, wildfires, and droughts. This  includes natural hazards that may be exacerbated by climate change.

Several stakeholders we interviewed identified potential strategic goals  for a federal climate resilience investment effort, including increasing the  resilience of communities to climate hazards and reducing federal fiscal  exposure to climate change. Furthermore, several stakeholders explained  that a goal of federal resilience investment should include helping  communities that do not have the capacity to implement climate resilience  projects on their own for various reasons such as limited funds to plan  and implement such projects. According to one stakeholder we  interviewed, because the federal role in investing in climate resilience  projects could be broad, it will be necessary to precisely define the nature  and scope of the funding effort in a way that is manageable, potentially  restricting funding to resilience projects that would not occur without  federal intervention. For example, federal resilience investment could  focus on large-scale, long-term climate resilience projects that are  otherwise too big, expensive, or cross-jurisdictional for local, state, or  private-sector actors to address, according to several stakeholders.

Designating an Entity and Providing Authority for It to Lead the Effort

Based on our review of several reports and past GAO work and  discussions with several stakeholders, various types of entities could lead  a federal climate resilience investment effort. This could include various  organizational arrangements such as a federal entity or interagency  collaborative effort—task forces, special councils, interagency offices, or  interagency working groups led by agency and department heads or  program-level staff.

According to one stakeholder we interviewed, a federal climate resilience  investment effort would need a high level of political support to be  effective. Several other stakeholders explained that clear authority for the  entity to conduct its work would be important to provide legitimacy for the  effort and create buy-in among participants and the public. Authority for  conducting a resilience effort could be provided via a legislative mandate  or executive order. For example, in the case of Louisiana, the state  legislature passed a law establishing CPRA, a state agency, in 2005 and  providing it with a mandate to develop, implement, and enforce a  comprehensive coastal protection and restoration master plan.

Identifying Participants and Defining Responsibilities

Identifying participants and defining responsibilities could involve  identifying an interdisciplinary team of experts to help evaluate climate  risk, generate project ideas, and evaluate projects. According to several  stakeholders, experts should have a breadth of expertise in disciplines  such as climate science, resilience, social sciences (e.g., economics),  engineering, finance, urban planning, infrastructure, and knowledge of  affected systems (e.g., transportation systems, public health, and  ecosystems). Several reports and several stakeholders also identified the  importance of involving representatives from the communities and groups  impacted by potential projects, explaining that doing so can increase  support for the process and help ensure projects meet communities’  needs. For example, a CPRA official told us that building trust and  communicating projects’ necessity with external stakeholders is extremely  important when prioritizing projects because some stakeholders will be  directly impacted by certain projects. For this reason, according to CPRA  officials, CPRA conducted extensive outreach with community groups and  other stakeholders to understand their perspectives on projects under  consideration and their potential impacts.

In addition, past GAO work identifies agreement on roles and  responsibilities as one of several practices to enhance and sustain  collaborative efforts. According to our September 2012 report, this  includes considering clarity of roles and responsibilities and articulating  and agreeing to a process for making and enforcing decisions.

Determining How the Effort Will Be Funded

Determining how the effort will be funded includes identifying potential  funding options (discussed later in this report) and establishing a budget  for investments in resilience projects. Based on the domestic and  international examples we reviewed, there are different ways to identify a  budget for resilience projects. The budget for Canada’s DMAF—the  equivalent of about US$1.5 billion over 10 years—was established  through the Canadian budget process. In contrast, Louisiana’s CPRA  used economic analysis to identify the optimal budget for the coastal  master planning effort—$50 billion—with funds for specific projects to be  solicited from various federal and nonfederal sources.

Step 2. Identify and Assess High-Risk Areas for Targeted Resilience Investment

High-risk areas for targeted resilience investment could include regions of  the country at high risk for climate hazards, economic sectors at high risk  (e.g., agriculture, health, or energy), or severe or costly expected climate  hazards (e.g., sea level rise), based on our review of several reports,  illustrative examples, and interviews with several stakeholders.  According to the National Academies and several stakeholders we  interviewed, climate resilience actions should address climate hazards  that are acute (e.g., the risk of more frequent or intense extreme weather)  and chronic (e.g., sea level rise). In Louisiana, CPRA identified two  climate risks—flooding risk and loss of coastal land—for targeted  resilience investment.

The U.S. Climate Resilience Toolkit, a website designed to help people  find and use tools, information, and subject matter expertise to build  climate resilience, and several reports we reviewed identified several  factors that influence a community’s level of climate risk. This  information can help decision makers identify high-risk areas for targeted  resilience investment. First, a community’s exposure is influenced by the  population or assets exposed to a potential climate hazard (e.g., sea level  rise, wildfire). For example, according to the Fourth National Climate  Assessment, the expansion of human activity into forests and other  wildland areas has been observed over the past few decades and is  expected to further increase the exposure of people and property to fire  risk. Second, the level of expected impact a community faces from a  given climate hazard is influenced by the probability of a given climate  hazard and its expected magnitude. Third, a community’s vulnerability to  these hazards is influenced by its sensitivity to a given climate risk and its  adaptive capacity—the ability to cope with stress or adjust to new  situations. An area with high exposure but low sensitivity to a given  climate hazard may have lower overall risk than an area with lower  exposure to the same hazard but higher sensitivity. The degree of  adaptive capacity can also serve to increase or decrease risks. For  example, according to the Fourth National Climate Assessment, tribal  nations are especially vulnerable to climate change because of their  reliance on threatened natural resources for their cultural, subsistence,  and economic needs.

We reported in September 2017 that while estimates of the economic  effects of climate change are imprecise due to modeling and information  limitations, they can convey useful insight into broad themes about  potential damages in different U.S. sectors or regions. This information  could help decision makers identify significant climate risks as an initial  step toward managing them and provide insight into high-risk areas for  targeted investment. For example, we reported in September 2017 that  the two national-scale studies available at the time that examined the  economic effects of climate change across U.S. sectors suggested that  the potential economic effects of climate change could be significant and  unevenly distributed across sectors and regions. According to one of the  studies, the Southeast, Midwest, and Great Plains regions likely will  experience greater combined economic effects than other regions, largely  because of coastal property damage in the Southeast and changes in  crop yields in the Midwest and Great Plains. (See fig. 4).

In addition, several stakeholders told us that USGCRP’s National Climate  Assessment, which describes potential climate change risks to the United  States, could help inform decisions about which regions of the country or  climate risks to target for resilience investment. In addition, the Notre  Dame Global Adaptation Initiative has developed an interactive database  that provides information on the level of climate risk U.S. cities face and  these cities’ readiness to enhance resilience. Nevertheless, one official  from the Mitigation Framework Leadership Group noted that identifying  climate risks is challenging, in part, because opinions about which risks  are most urgent will vary according to the perspective of the observer.  According to the National Academies, even though there are still  uncertainties about the nature, timing, and magnitude of climate change  impacts, mobilizing now to increase the nation’s resilience can be viewed  as an insurance policy against climate change risks.

Step 3. Identify Potential Project Ideas

Identifying potential project ideas that align with high-risk areas for  targeted resilience investment is the third step in the process for  identifying and prioritizing climate resilience projects for federal  investment. Potential projects may differ in purpose and location and  could include constructing hard infrastructure (e.g., flood defenses such  as seawalls) and natural infrastructure (e.g., wetlands in coastal areas) to  protect against climate hazards, relocating a community out of harm’s  way, or developing a suite of projects designed to collectively address a  climate hazard (e.g., wildfire risk or drought) in a particular region of the  country, according to several stakeholders we interviewed and based on  our review of several reports. From our interviews with several  stakeholders and our review of our examples from Canada and  Louisiana, we noted two methods for identifying ideas for resilience  projects—”bottom up” and “top down”—that can be used individually or in  combination.

Several stakeholders told us that project ideas could come from a  “bottom-up” method in which the federal government seeks proposals  from tribal, state, and local governments; regional groups; or other  stakeholders for projects. For example, Infrastructure Canada, the federal  department that administers the DMAF, sought project ideas from  provinces, territories, municipal and regional governments, indigenous  groups, and others. Under the DMAF, these entities applied directly to  Infrastructure Canada for funding. Likewise, in Louisiana, CPRA also  used a “bottom-up” method to identify projects by allowing citizens, state  agencies, nongovernmental organizations, academics, and others to  submit project ideas. Where necessary, staff at CPRA developed the  more detailed plans needed to evaluate and operationalize the projects.  CPRA officials said that involving the communities where climate  resilience projects will be located in the project identification process  helped create support for these projects.

Two stakeholders explained that the process for identifying potential  project ideas must be sensitive to the fact that some communities do not  have the administrative capacity to develop proposals. Otherwise, project  ideas will primarily come from communities with ample institutional  capacity, and locations with less administrative capacity—and the climate  risks associated with these locations—will be missed. According to a  2014 report by the President’s State, Local, and Tribal Leaders Task  Force on Climate Preparedness and Resilience, the federal government  can drive more resilient community choices by, among other things,  providing technical assistance to states, territories, tribes, and  communities that lack capacity to adapt to climate change. In 2014,  HUD launched the National Disaster Resilience Competition to fund  disaster recovery and long-term community resilience in parts of the  country that had recently been affected by major disasters. During the  first phase of the competition, eligible states and communities impacted  by a disaster from 2011 through 2013 could obtain technical assistance  through resilience workshops. According to HUD, these workshops  provided information and expertise to help communities understand  resilience and identify various threats, hazards, economic stresses, and  other potential shocks that could impact each community. The workshops  also offered eligible applicants tools and concepts to better identify and  assess their risk, engage with their communities, choose resilience- building opportunities, and develop strong applications.

Several stakeholders told us that projects could be identified through a  “top-down” method, in which potential projects would be identified by an  interdisciplinary group of federal officials and other experts. According to  one stakeholder, a “top-down” method could facilitate consideration of  cross-cutting projects that address multiple climate risks and regions of  the country. In addition, according to two stakeholders, such a top-down  method could help identify projects unlikely to be suggested by local  stakeholders for various reasons, such as the local communities not  having the administrative capacity to develop and submit such proposals  or a local community’s interest being at odds with the national interest  (e.g., relocation of a high-risk community when relocation would result in  the loss of local tax revenue). However, officials from the Mitigation  Framework Leadership Group explained that without the involvement of  communities and prioritization of local needs, a top-down approach could  be viewed as disconnected from community needs. In Louisiana, CPRA  supplemented its “bottom-up” method with “top-down” identification of  additional potential projects by, among other things, reconsidering past  project proposals that were not selected and working with stakeholders to  design potential projects.

Step 4. Prioritize Climate Resilience Projects

Prioritizing projects is the fourth key step in the process for identifying  high-priority projects for federal investment. Based on our review of  several reports and interviews with several stakeholders, prioritizing  projects for federal investment should involve evaluating individual  projects using scientific and data-based processes. For example,  according to a 2010 report by the National Academies, managing risk in  the context of enhancing resilience to climate change involves using the  best available social and physical science to understand the likelihood of  climate impacts and their associated consequences and then selecting  and implementing the response options that seem most effective.  Stakeholders we interviewed, the Louisiana example, and our past work  indicate the need to solicit feedback from communities on the potential  impacts of proposed projects. Furthermore, according to several  stakeholders we interviewed, projects should be prioritized by an  independent, interdisciplinary group of experts capable of assessing  projects against measurable criteria. For example, according to Canadian  officials, Infrastructure Canada seeks considerations on potential projects  from two committees of experts: the first one is comprised of a panel of  experts from other federal departments, and the other is comprised of  nonfederal experts, including urban planners, sustainability professionals,  and individuals with various regional expertise. We identified several  potential criteria and tools that could be used to evaluate projects and  identify those that are high priority, as described below.

Potential Criteria for Evaluating Projects

We identified various potential criteria for evaluating projects and  assigning priority for federal investment, based on our review of reports,  interviews with stakeholders, and the Louisiana and Canadian examples.  Potential criteria fell into three general categories: goal-oriented criteria  (i.e., criteria that measure the extent to which a project enhances  resilience and meets other goals), efficiency criteria (i.e., criteria that  measure a project’s ability to maximize efficiency, including by  maximizing benefits and minimizing costs), and administrative criteria  (i.e., other criteria that program administrators may want to consider). See  table 1 for more details. The federal government can select a limited  number of criteria for evaluation that align with the overall strategic goals  of the climate resilience investment effort, based on our discussions with  stakeholders.

Goal-oriented criteria. We identified several goal-oriented criteria— criteria that measure the extent to which a project enhances resilience  to climate change and meets other goals—that decision makers may  want to consider when evaluating which projects to prioritize, based  on several reports we reviewed and stakeholders we interviewed.  Several reports and several stakeholders suggested prioritizing  projects that, among other things, focus on severe or costly climate  hazards as well as climate hazards about which there is the most  scientific certainty. Several stakeholders we interviewed explained  that when prioritizing projects for implementation, it is important to  consider a project’s potential to enhance resilience by protecting  human lives, health, and safety, and assets that are critical, high- value, or culturally significant.

In addition, several stakeholders told us that decision makers should  not place too much emphasis on the monetary value of avoided  property losses from a project because doing so can overemphasize  projects that protect high-value assets and leave socially vulnerable  populations with limited economic resources less protected. According  to one report, the loss of assets is more difficult for a poor household  to absorb than a wealthy household that has more assets to begin  with and more access to insurance and credit. Similarly, the Fourth  National Climate Assessment notes that poor or marginalized  populations often face a higher risk from climate change because they  live in areas with higher exposure, are more sensitive to climate  impacts, or lack the capacity to respond to climate hazards. Several  stakeholders told us that to account for a lack of social equity, it is  important to prioritize projects in communities that have limited  capacity to enhance resilience without federal financial assistance,  including communities with limited financial means.

In addition to these factors, several reports and several stakeholders  discussed the importance of considering a project’s impacts on the  environment, including its ability to protect unique or sensitive  environmental habitats or species. Finally, several reports discussed  the importance of considering the potential system-wide impacts of a  project, including a project’s potential to provide benefits as well as  the potential that risk may be transferred to neighboring communities.  The DMAF applicant’s guide provides an example of potential risk  transfer, explaining that the construction of new dikes along a river to  protect a segment of the floodplain may confine the river, raising  water levels upstream and increasing the velocity of the river  downstream. This may reduce the hazard in the segment of river  immediately adjacent to the structure but will transfer risk to upstream  and downstream communities.

Efficiency criteria. We identified several efficiency criteria—criteria  that measure a project’s ability to maximize net benefits—that  decision makers may want to consider when evaluating which projects  to prioritize. Several reports we reviewed identified the importance  of considering how a project’s expected benefits compare to its costs  to help ensure a project represents an efficient use of federal dollars.  With respect to costs, one stakeholder identified the importance of  considering the current costs of implementing a project as well as how  costs might change in the future if a project’s implementation is  delayed to a later date. With respect to benefits, several stakeholders  indicated that while it can be difficult to estimate the monetary value of  some benefits, it is important to consider all expected benefits— including co-benefits—as fully as possible to draw accurate  conclusions about how a project’s benefits compare to its costs. For  example, several stakeholders discussed the need to account for  future benefits because much of the value of a climate resilience  project may be realized far in the future as climate risks become more  pronounced.

In addition, several reports identified ways to account for uncertainty  about the specific nature of future climate risks when making  decisions about which projects to prioritize. This includes, for  example, prioritizing projects that provide benefits under a wide range  of future climate scenarios or prioritizing projects that can be modified  if future climate conditions are different than expected. In addition to  these considerations, several stakeholders also suggested  considering the long-term viability of communities being helped by a  project. These stakeholders explained that some communities may  face climate risks that are so severe over the long term that they  preclude cost-effective investments in resilience. They explained that  rather than make costly resilience investments in these communities,  a more efficient use of federal funds might involve making  investments in projects that help transition a community to a safer  location. Similarly, according to a 2015 study by the U.S. Army Corps  of Engineers, given current and projected sea level and climate  change trends, some of the built environment will become  unsustainable for communities presently located there, which may  mean that communities may have to relocate in a responsible manner  to sustain their economic viability and social resilience. Another  stakeholder suggested prioritizing resilience projects that are unlikely  to be funded without federal investment, such as projects for the  public good that do not generate revenue and likely would not attract  private investors.

Administrative criteria. We identified several additional criteria that  federal decision makers investing in climate resilience projects may  want to consider when evaluating which projects to prioritize, including  whether the project is feasible and timely. One stakeholder identified  the importance of using federal dollars to invest in projects with novel  resilience techniques since these projects otherwise might be unlikely  to receive investment from other sources. For example, the Canadian  DMAF awards merit to projects that offer effective solutions through  unique innovative ideas. One stakeholder suggested that the federal  government may want to consider the overall distribution of projects  across hazards and regions to ensure that all hazards and regions of  the country are getting at least some investment in resilience.

Based on our review of several reports and illustrative examples, various  tools used individually or in combination could help decision makers  evaluate projects in order to identify high-priority ones and visualize  project trade-offs. For example, using multi-criteria analysis involves  decision makers identifying potential criteria, assigning weights to the  criteria, ranking proposed projects against the weighted criteria, and using  the results to compare projects and inform decisions about which projects  to implement. In Canada, officials with the DMAF use multi-criteria  analysis to rank potential resilience projects against multiple criteria  including the extent to which projects strengthen community resilience  and reduce the impacts of natural disasters.

Quantitative modeling is another tool that can help decision makers  visualize the potential benefits and costs of proposed projects under  multiple future climate change scenarios, and thus facilitate identification  of high-priority projects. For example, in Louisiana, CPRA used computer  modeling tools to evaluate how projects could reduce future land loss and  flooding risk, among other effects. To account for uncertainty about  future climate and economic conditions, the modeling tools estimated  project outcomes under multiple future scenarios representing varied climate conditions (e.g., sea level rise and the frequency and intensity of  storms), economic growth conditions, and other factors. According to the  Comprehensive Master Plan for a Sustainable Coast, information from  the modeling tools helped support deliberations between CPRA and  coastal stakeholders that helped identify high-priority projects for  implementation.

Step 5. Implement High- Priority Projects

High-priority resilience projects can be implemented as funds become  available, while decision makers consider the optimal timing of project  implementation. For example, in Louisiana’s coastal master planning  effort, CPRA identified $50 billion in projects to be implemented as  various federal and nonfederal funding sources become available. CPRA  sequences project implementation based on project effectiveness and  benefits in the near term or the long term. See figure 5 for completed,  ongoing, and planned projects.

Project implementation may be influenced by the presence of “windows of  opportunity”—periods of time when outside factors make it advantageous  or cheaper to implement a project, based on our review of several  reports. For example, according to the Fourth National Climate  Assessment, many jurisdictions and businesses have significant stocks of  aging transportation, water, energy, housing, and other infrastructure, and  new infrastructure investments and capital stock turnover provides one  particularly favorable opportunity for low-cost, proactive climate resilience  investment. In addition to the availability of funding and windows of  opportunity, projects may also need final approval from a decision-making  entity—the Minister of Infrastructure, in the case of Canada’s DMAF— before implementation. In the case of Louisiana, the state legislature must  approve the overall master plan, although, according to a CPRA official,  the legislature does not approve the inclusion of individual projects or  project concepts.

Step 6. Monitor Projects and Climate Risk

Monitoring the projects being implemented and the state of climate risks  can provide information to inform future decisions about high-priority  climate resilience projects for federal investment. According to the 2010  report by the National Academies, policy decisions to manage risk can be  improved if they incorporate the concept of “adaptive management”— monitoring progress in real time and changing management practices  based on learning about and recognizing changing conditions. As an  example, Louisiana’s CPRA monitors the performance of projects and the  condition of the Louisiana coast using the results from these activities to  adjust project management actions and inform future coastal master  planning efforts.

We identified two options for focusing federal funding on high-priority  climate resilience projects—coordinating funding provided through  multiple existing federal programs with various purposes and creating a  new federal funding source specifically for high-priority climate resilience  projects—and these options have strengths and limitations. In addition,  our analysis of these sources identified opportunities to increase the  climate resilience impact of these two funding options.

Options for Focusing Federal Funding on High- Priority Climate Resilience Projects Have Strengths and Limitations

Options for focusing federal funding on high-priority climate resilience  projects—coordinating funding provided through multiple existing federal  programs with varied purposes and creating a new federal funding source  specifically for high-priority climate resilience projects—have strengths  and limitations, based on our review of our prior work, relevant reports,  and the Louisiana and Canadian examples, as well as interviews with  stakeholders. See table 2.

One option for focusing funding on high-priority climate resilience projects  involves coordinating funds from multiple existing federal programs with  varied purposes that were not designed specifically for climate resilience  but whose purpose may be compatible with these projects. For example,  the state of Louisiana’s coastal master planning effort uses multi-program  coordination to fund projects. Specifically, funding for high-priority  resilience projects identified in the master plan is provided via several  federal and nonfederal programs designed for wetlands restoration,  hurricane risk reduction, oil spill recovery, and community development,  among other purposes, when the program’s purpose aligns with the  project’s purpose. For example, the National Fish and Wildlife Foundation  Gulf Environmental Benefit Fund—established in early 2013 as an  outcome of plea agreements for the Deepwater Horizon explosion and oil  spill—has been used to fund some projects consistent with the master  plan that restore barrier islands and implement river diversions.  Administrators of these federal and nonfederal funding programs, rather  than CPRA, make decisions about how funds are to be spent, but they  coordinate with CPRA to ensure decisions are consistent with the master  plan.

As with the Louisiana example, high-priority climate resilience projects  could be funded via one or more federal programs compatible with the  project’s purpose. We identified federal programs related to flood control  and hazard mitigation that could be used to fund individual projects that  may convey climate resilience benefits, including FEMA’s hazard  mitigation assistance programs (i.e., Building Resilient Infrastructure and  Communities, Pre-Disaster Mitigation, Flood Mitigation Assistance, and  Hazard Mitigation Grant programs), HUD’s Community Development  Block Grant Disaster Recovery program, and the U.S. Army Corps of  Engineers’ civil works program. These programs are managed  individually within their agencies and operate under different statutory  authorities. However, no federal entity oversees funding for high-priority  climate resilience projects, for example, by identifying which existing  federal programs could be used to fund particular high-priority projects  and coordinating the use of these programs to fund particular projects.

Based on our review of the Louisiana example, interviews with  stakeholders, and a report we reviewed, we identified several strengths of  coordinating multiple existing federal programs with varied purposes to  fund high-priority climate resilience projects:

Leveraging existing programs. This option leverages an existing  architecture of related federal programs and could encourage  consideration of climate change in routine agency decisions, based on  our interviews with several stakeholders and review of a related  report. The federal government already has programs that address  natural resources (e.g., coastlines, water resources, and forests) and  human systems (e.g., public health, housing, and infrastructure) that  will be affected by climate change, according to a 2010 report we  reviewed and two stakeholders we interviewed. According to this  report and stakeholders, rather than create an additional program to  address climate change, it would be better to incorporate  consideration of climate change into existing federal decision-making  processes. Providing funding for high-priority climate resilience  projects via existing federal programs could encourage agencies to  think more intentionally about climate change on a regular basis when  implementing their programs, according to several stakeholders we  interviewed.

Providing access to specialists and expertise. Federal officials  who have specialized, sector-specific knowledge (e.g., infrastructure,  agriculture, or ecosystems) that can be useful when evaluating which  projects to fund may have a greater opportunity to provide input if  funding decisions are made within existing federal programs,  according to several stakeholders. According to one stakeholder,  specialized knowledge that resides within federal agencies is  necessary when evaluating the trade-offs of potential projects that  address diverse systems and assets. This stakeholder explained that,  for example, evaluating a project to strengthen a shipping port against  hurricanes requires different expertise than evaluating a project to  protect the surrounding community against these hurricanes, and  agency officials’ specialized knowledge would be useful in evaluating  the value of such distinct projects.

Providing access to multiple funding sources. Using multiple  existing federal programs means that multiple potential funding  streams are available for projects. For example, one stakeholder  whose community previously used federal funding to implement large- scale resilience projects said that when funding from one program is  not available—for example, because the project does not match that  program’s purpose or because of insufficient funds—having multiple  existing programs from which to seek funding is advantageous.  Similarly, Louisiana makes use of multiple federal and nonfederal  funding sources to implement projects identified through its master  planning effort.

On the basis of our review of the Louisiana example, relevant reports,  and interviews with stakeholders, as well as our past work—including the  Disaster Resilience Framework—we identified several limitations of using  existing programs to fund high-priority climate resilience projects:

Administratively challenging to coordinate. Several stakeholders  and a 2016 report we reviewed identified potential administrative  challenges associated with using multiple existing programs with  varied purposes to fund high-priority projects. For example, CPRA  officials told us that the process of coordinating funding from multiple  programs for coastal projects is complicated and requires dedicated  staff to identify programs, assess whether projects meet program  funding criteria, apply for funds, and ensure that program  requirements are met. Several stakeholders told us that the budgets  of existing programs may be too limited to fund large-scale climate  resilience projects and that acquiring funding for a single project  through multiple federal programs can be difficult. For example, FEMA  officials told us that a potentially relevant FEMA program—the Pre- Disaster Mitigation Grant Program—has limited overall funding and  restricts the financial size of a project, making it challenging to fund  large-scale projects such as community relocation. Furthermore,  according to a 2016 report about lessons learned from the HUD  Rebuild by Design competition, grantees faced challenges combining  funds from multiple programs to support comprehensive rebuilding  visions because each program had its own procedural and  administrative requirements, including different timelines for how and  when the funds were made available. Similarly, according to our  Disaster Resilience Framework, when multiple programs and activities  and multiple funding streams are involved, there is a risk that the  array of requirements will increase administrative complexity. As we  reported in July 2015, jurisdictional officials engaged in disaster  recovery have encountered complex review processes, conflicting  federal guidance, and competing federal priorities that diminished the  desire of localities to participate in resilience programs.

Programs may be siloed. Existing federal programs may be “siloed,”  according to several stakeholders and two reports we reviewed,  meaning that agencies may have limited visibility over how their  projects affect other agencies’ mission areas or a limited ability to  consider those effects. The two reports we reviewed identified  challenges with siloed agency programs, including that they can  discourage more holistic resilience projects with benefits in multiple  sectors. For example, according to the 2016 report about lessons  learned from the HUD Rebuild by Design competition, program rules  may restrict the use of federal funds to certain activities (e.g., flood  control), which can make it difficult to justify the additional cost of a  more holistic resilience project with benefits in other sectors (e.g., a  larger-scale flood control project with water quality co-benefits).  According to the National Academies, climate resilience activities  have the potential to be redundant or to work at cross purposes if they  are not coordinated across sectors, actors, scale, and time frames.  For example, the National Academies identified potential tradeoffs  between resilience activities in the agricultural, water, and ecosystem  sectors, such as increased irrigation in response to drought competing  with natural ecosystem flows and domestic water needs.

Climate resilience is not the primary focus. Though it may be  possible to use some existing federal programs to fund high-priority  climate resilience projects, the primary purpose of these programs is  not enhancing resilience to climate change, and they are not  coordinated toward a common climate resilience goal, according to  our work for this report. As a result, relying on existing programs for  funding could result in inadvertent, ad hoc funding rather than  intentional, coordinated, and strategic funding of high-priority projects,  based on our past work and interviews with several stakeholders. In  particular, according to FEMA officials, statutory and regulatory  limitations could make it challenging to incorporate consideration of  climate resilience into existing programs. Furthermore, according to  several stakeholders, program funding criteria may not relate directly  to climate resilience—this can lower the chance that climate resilience  projects will receive funding. In our May 2014 report about DOD’s  consideration of climate change in infrastructure planning, we  reported that military installation officials rarely proposed climate  resilience projects because the services’ criteria for ranking and  funding potential military construction projects did not include climate  change adaptation. In addition, a 2018 report about federal  resilience policy we reviewed and several stakeholders we  interviewed identified challenges with how cost-benefit formulas  account for future climate risk when evaluating the costs and benefits  of a project under consideration. Two stakeholders we interviewed  told us that the discount rate—the interest rate used to convert  benefits and costs occurring in different time periods to a common  present value—used in federal cost benefit formulas may too heavily  discount future benefits. They explained that when benefits accrue  over long time horizons, this can result in future climate benefits  appearing small relative to the current cost of project implementation  and thus result in some climate resilience projects not being funded.

Existing programs may be reactive, not proactive. Some existing  programs—for example, HUD’s Community Development Block Grant  Disaster Recovery program and FEMA’s Hazard Mitigation Grant  Program—are limited to funding resilience projects after a disaster  occurs, which may result in reactive instead of proactive funding,  based on our review of our past work and discussions with several  stakeholders. We concluded in July 2015 that funding hazard  mitigation efforts in a post-disaster environment can create a reactive  and fragmented approach in which disasters determine when and for  what purpose the federal government invests in disaster resilience.  Furthermore, tying climate resilience funding to a disaster can result in projects going unfunded in communities where there has not yet been  a disaster but where there are legitimate risks from future climate  change impacts—including chronic climate hazards such as sea level  rise—according to several stakeholders we interviewed. For example,  our past work and several stakeholders identified challenges in  accessing funding from existing federal programs to relocate  communities threatened by climate hazards, such as Alaskan native  villages threatened by flooding and erosion caused by sea level rise.  According to our June 2009 report, since many Alaskan native  villages facing gradual erosion problems had not received a declared  disaster designation, they did not qualify for some FEMA disaster  recovery and hazard mitigation programs. In addition, according to  a 2016 report we reviewed, disaster recovery programs tend to be  reactive and backward looking, focusing on areas immediately  affected by a disaster. This can limit the ability of grantees to fund  projects that could more holistically reduce the full suite of future risks  that a region or community face.

Another option for focusing federal funding on high-priority climate  resilience projects involves creating a new funding source specifically for  such projects. We identified two main ways a new funding source could  be designed in the United States: (1) a federal financial assistance  program that could provide grants, loans, or loan guarantees to  nonfederal entities implementing high-priority climate resilience projects,  or (2) a climate resilience infrastructure bank that could combine federal  funds with funds from other sources to provide funding to nonfederal  entities for implementing high-priority climate resilience projects.

The government of Canada employs both of these methods. Specifically,  Canada created the DMAF as a one-time, centralized fund of about  US$1.5 billion dollars for climate resilience projects over a 10-year period.  Applications not eligible for or not selected to receive DMAF funding could  be eligible under other infrastructure programs. Projects that could  generate revenue are shared with Canada’s Infrastructure Bank for  consideration.

Based on our review of the DMAF and interviews with stakeholders, we  identified several strengths of creating a new funding source for high- priority climate resilience projects:

Administrative simplicity. Several stakeholders said that a new  funding source avoids the administrative challenge of coordinating  multiple funding sources to implement a large project or portfolio of  projects. According to two stakeholders, such an option would avoid  the challenge of having to utilize multiple programs with varying  program rules, solicitation periods, and funding terms. Another  stakeholder suggested that a single source would make it easier to  track spending on climate resilience projects.

Focusing on high-priority climate resilience projects. Several  stakeholders said that an advantage of a new funding source is that it  would provide dedicated funding for projects undertaken for the  explicit purpose of climate resilience. For example, Canadian officials  said that with the DMAF, climate resilience projects do not have to  compete with other infrastructure projects for funding as they do within  other programs administered in Canada that include multiple eligible  project categories (e.g., water, wastewater, public transit). Canadian  officials told us that this increases the likelihood that large-scale,  nationally significant climate resilience projects will be funded.  According to another stakeholder, a new funding source for high- priority climate resilience projects would allow for a proactive focus on  the most pressing climate resilience needs instead of reactive project  funding through post-disaster spending. In addition, another  stakeholder told us this option could encourage communities to think  “intentionally” about developing resilience, rather than climate  resilience being an afterthought. Furthermore, several stakeholders  said that such a funding source could be used for projects that  otherwise would not receive funding through existing programs. For  example, some projects may not receive funding because they are not  compatible with current programs or because current programs have  limited funding.

Encouraging cross-sector projects. Several stakeholders told us  that a new funding source for high-priority climate resilience projects  could encourage cross-sector projects designed to achieve benefits in  multiple sectors. According to one of these stakeholders, a dedicated  fund for climate resilience could allow experts from multiple sectors— such as infrastructure, housing, transportation, and health—to  collaborate on projects, leading to more creative, comprehensive  approaches to enhance community resilience than would occur when  funding projects through individual, existing federal programs.  According to the Fourth National Climate Assessment, exploring the  climate resilience nexus between sectors can identify co-benefits of  resilience solutions and inform cost-effective resilience strategies.  For example, the assessment describes co-benefits that resilience  actions related to water consumption can have on the electricity  sector. According to the assessment, California’s mandate to reduce  urban water consumption to address drought conditions in 2015  resulted in significant reductions in both water use and use of  electricity to treat and convey water and wastewater.

Based on interviews with stakeholders, we identified some limitations of  creating a new funding source for high-priority climate resilience projects:

Practical challenges. Several stakeholders identified practical  challenges with a funding source specifically for high-priority climate  resilience projects. For example, such a funding source in the United  States does not exist and would have to be created, which would  require Congressional authorization. Furthermore, several  stakeholders identified decisions that would have to be made about  how to design such a funding source, including which agencies would  be responsible for administering the fund. Two stakeholders identified  additional challenges to success, such as designing effective  programmatic rules and eliminating duplication with existing  programs. For instance, if the funding source had overly restrictive or  poorly designed rules, it might be challenging to use and provide only  limited benefits relative to existing programs, according to one of  these stakeholders.

Discouraging mainstreaming in existing federal programs.

Several stakeholders raised concerns that a new funding source for  high-priority climate resilience projects could discourage  mainstreaming climate change considerations into existing federal  programs or lead to the elimination of other sources of funding for  climate resilience projects. Several stakeholders explained that  mainstreaming is a fundamental way the federal government will  enhance resilience to climate risks. In particular, several stakeholders  raised concerns that if federal agencies viewed a single funding  source specifically for climate resilience projects as sufficient for  addressing climate resilience, federal agencies might be less likely to  consider climate change impacts when making routine agency  decisions or place a lower value on climate resilience project  attributes when making funding decisions.

Opportunities Exist to Increase the Climate Resilience Impact of Federal Funding Options

Opportunities exist to increase the climate resilience impact of options for  focusing federal funding on high-priority climate resilience projects, based  on our review of our past work, related reports, an international standard,  and the Louisiana and Canadian examples, as well as interviews with  stakeholders:

Using both existing and new funding options. Several  stakeholders told us that using both funding options—multiple,  existing federal programs with varied purposes and a new funding  source for high-priority climate resilience projects—in a strategic,  coordinated way could help increase the impact of federal investment.  Several stakeholders told us that directing both funding options at  high-priority projects could result in a more effective approach that  makes it less likely that high-priority projects fall through the cracks  and more likely that these projects will help agencies work toward a  common strategic goal. Two stakeholders told us that in practice,  multiple, existing federal funding sources that are not specific to  climate resilience could be coordinated to fund projects when their  purposes and rules align and adequate funding is available. A funding  source specifically for climate resilience could be used to fund  proposed projects when no related program exists or when existing  programs do not have sufficient funding available, according to these  and other stakeholders.

Helping ensure adequate and consistent funding. Several  stakeholders we interviewed identified the need for adequate and  consistent funding to implement high-priority climate resilience  projects. For example, according to one stakeholder we interviewed,  inconsistent, inadequate funding makes it difficult to complete large- scale projects and can lead to additional costs if significant delays  occur during which existing work deteriorates. In addition, according  to some international officials we interviewed for a May 2016 report,  long-term consistency in budgeting provides predictable, reliable  resources for climate resilience projects. According to USGCRP’s  Fourth National Climate Assessment, adequate funding is a factor that  contributes to the successful adoption and implementation of climate  resilience by public-sector organizations. Furthermore, an industry  standard identified the need to ensure that resources—including  financial, human, and technical resources—needed for climate  resilience actions are available. In addition to adequate and  consistent funding, funding options should be designed to  accommodate long-term projects since high-priority climate resilience  projects can take multiple years to design and implement, according  to two stakeholders we interviewed.

Encouraging nonfederal investment. Several stakeholders we  interviewed told us that the federal government could use a federal  climate resilience investment effort to encourage nonfederal  investment in high-priority climate resilience projects, thereby  increasing the impact of federal investment. For example, several  stakeholders identified the importance of a cost-share component so  that funding recipients are invested in a project’s success. Canada’s  DMAF encourages nonfederal investment by partially funding projects  of national significance and requiring different levels of cost-share  from funding recipients, ranging from 25 percent for Indigenous  recipients to 75 percent for private-sector and other for-profit  recipients. Several stakeholders also identified potential funding  mechanisms—for example, public-private partnerships and loan  guarantees—that could leverage federal dollars to encourage  additional investment in climate resilience projects by nonfederal  entities, including the private sector. According to the 2014  President’s State, Local, and Tribal Leaders Task Force report, one  way the federal government can drive more resilient community  choices is by encouraging innovative approaches that leverage  private capital.

Encouraging complementary resilience activities. To increase the  impact of federal investment, a federal resilience investment effort  presents an opportunity to encourage complementary resilience  activities by nonfederal actors such as states, localities, and private- sector partners, based on interviews with several stakeholders, the  Canadian example, and reports we reviewed. Several stakeholders  suggested establishing conditions that funding recipients must meet in  exchange for receiving federal funding. Alternatively, according to the  2014 President’s State, Local, and Tribal Leaders Task Force report  and two stakeholders we interviewed, the federal government could  use incentives (e.g., providing greater federal cost-share or giving  additional preference in the project prioritization process) to  encourage complementary resilience activities by nonfederal  actors. Furthermore, our Disaster Resilience Framework states that  incentives can make long-term, forward-looking risk reduction  investments more viable and attractive among competing priorities.  Specifically, incentives can lower the costs or increase the benefits of  risk-reduction measures, which can help stimulate investment by state  and local governments, individuals, and the private sector.

The federal government could use a federal resilience investment  effort to encourage several types of complementary resilience  activities by nonfederal actors. For example, the federal government  could encourage the use and enforcement of building codes that  require stronger risk-reduction measures, according to two reports we  reviewed and several stakeholders we interviewed. In the case of  the DMAF, to be eligible for federal funding, all projects under the  DMAF must meet or exceed building code requirements for their  jurisdiction. In addition, several stakeholders suggested using a  federal investment effort to encourage communities to limit or prohibit  development in high-risk areas to minimize risks to people and assets  exposed to future climate hazards. One example of this would be  through zoning regulations. Another stakeholder suggested that  communities receiving federal funding for resilience projects should  be adequately insured against future climate risks so they have a  potential source of funding for rebuilding in the event of a disaster.

Allowing funds to be used at various stages of project  development. Several stakeholders suggested that federal funds be  allowed for use at multiple stages of project development—such as  project design, implementation, or monitoring—to increase the impact  of federal funds. For example, two stakeholders we interviewed told  us that resilience projects can require significant amounts of design  work to develop an implementable and effective project concept and  that making funds available for project design could improve the  quality of project proposals, thereby maximizing the impact of federal  funds. Similarly, a CPRA official explained that many project  proposals for Louisiana’s Comprehensive Master Plan for a  Sustainable Coast are in the “concept stage” when they are received  so funds are needed to refine the concept and craft an implementable  project design. In addition to providing federal funds for project  design, one stakeholder suggested making federal funding available  to measure project outcomes (e.g., how effectively projects increased  resilience) to improve future decisions by both the federal government  and others making resilience investments.

Individual federal agencies have provided ad hoc funding for projects that  may convey some climate resilience benefits using existing federal  programs. However, the federal government does not have a strategic  approach for investing in climate resilience projects that targets federal  resources toward projects that address the nation’s most significant  climate risks. USGCRP projects that disaster costs will likely increase as  certain extreme weather events become more frequent and intense due  to climate change. The rising number of natural disasters and increasing  reliance on the federal government for assistance is a key source of  federal fiscal exposure. Investment in climate resilience projects can help  prepare the country for the effects of climate change. We found that to  strategically identify and prioritize climate resilience projects for federal  investment, the federal government could take six key steps, based on  reports we reviewed, past GAO work, international standards, and  stakeholders we interviewed. In addition, opportunities exist to increase  the climate resilience impact of funding options, such as by encouraging  the use of climate-resilient building codes. However, no federal agency,  government-wide coordinating body, or other organizational arrangement  has been established to periodically identify and prioritize climate  resilience projects for federal investment.

Our past work and other sources highlight the importance of a strategic  and iterative risk-informed approach to climate change and the need to  reduce the federal government’s fiscal exposure. However, the federal  government has made little measurable progress since 2017 to reduce its  fiscal exposure to climate change. Although we have made 17  recommendations that address improving federal climate change  strategic planning, as of August 2019, no action had been taken toward  implementing 14 of those recommendations—one dating back to 2003. A  strategic and iterative risk-informed approach for identifying and  prioritizing climate resilience projects for federal investment, with an  appropriate organizational arrangement, could help target federal  resources toward climate resilience projects that have the greatest  expected net benefit and that address the nation’s most significant  climate risks.

Congress should consider establishing a federal organizational  arrangement to periodically identify and prioritize climate resilience  projects for federal investment. Such an arrangement could be designed  for success by considering the six key steps for prioritizing climate  resilience investments and the opportunities to increase the climate  resilience impact of federal funding options identified in our report. (Matter  for Consideration 1)

We provided a draft of this report to the U.S. Global Change Research  Program, the Federal Emergency Management Agency, and the  Mitigation Framework Leadership Group for review and comment. These  entities provided technical comments, which we incorporated as  appropriate.

As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Executive Director of the U.S. Global  Change Research Program, the Acting Secretary of the Department of  Homeland Security, and other interested parties. In addition, the report  will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or gomezj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix II.

Appendix I: Objectives, Scope, and Methodology

In this report, we examine (1) the extent to which the federal government  has a strategic approach for investing in climate resilience projects; (2)  key steps that provide an opportunity for the federal government to  strategically prioritize climate resilience projects for federal investment;  and (3) strengths and limitations of options for focusing federal funding on  high-priority climate resilience projects.

To address all three audit objectives, we conducted semi-structured  interviews with 35 stakeholders with relevant expertise, including federal  officials, researchers, and consultants. We used a snowball approach to  identify stakeholders with expertise on the topics addressed by our report.  This involved identifying an initial list of stakeholders with expertise in  climate resilience and hazard mitigation by reviewing related reports and  based on stakeholder involvement in related present or past federal  efforts—for example, work conducted by the U.S. Global Change  Research Program (USGCRP)—the federal program responsible for  coordinating climate change research and preparing the Fourth National  Climate Assessment. We identified additional stakeholders with  expertise in these and other relevant areas through interviews with this  initial group of stakeholders and review of additional reports. We  considered several factors when selecting stakeholders: the relevance of  their expertise, the number of times they were recommended to us by  other stakeholders as having relevant expertise, and their current or  previous federal experience. We sought a balanced set of stakeholders  with expertise in a variety of fields that could inform climate resilience  decisions: climate resilience, decision sciences, hazard mitigation,  economics and finance, insurance, engineering and project design,  economic and community development, potentially related federal  programs (e.g., Federal Emergency Management Agency  hazard  mitigation programs), and several affected resources (e.g., coasts,  infrastructure, water resources, and ecosystems). We use the term  “several” to represent three or more stakeholders or reports expressing a  particular viewpoint. In other cases, we provide the exact number of  stakeholders expressing a particular viewpoint. Because this is a  nonprobability sample, our findings cannot be generalized to other  stakeholders we did not interview. Rather, these interviews provided us  with illustrative examples of (1) the extent to which the federal  government has a strategic approach for investing in climate resilience  projects, (2) key steps that provide an opportunity for the federal  government to strategically prioritize climate resilience projects for federal  investment, and (3) strengths and limitations of options for focusing  federal funding on high-priority climate resilience projects. In addition, the  specific areas of expertise varied among the stakeholders we interviewed,  so not all of the stakeholders commented on all of the interview questions  we asked.

To determine the extent to which the federal government has a strategic  approach for investing in climate resilience projects, we reviewed past  GAO work on federal efforts related to climate resilience and climate  change funding as well as reports from the Congressional Research  Service, Congressional Budget Office, the Council on Climate  Preparedness and Resilience, USGCRP, and other sources. We also  reviewed federal documents, including the National Mitigation Investment  Strategy—a national strategy for mitigating natural hazards. We  interviewed officials from USGCRP and FEMA, the federal agency  responsible for leading the Mitigation Framework Leadership Group, the  interagency group that developed the National Mitigation Investment  Strategy under Presidential Policy Directive 8. We also interviewed  several other stakeholders on the extent to which the federal government  has a strategic approach for investing in climate resilience projects and  the nature and scope of the Mitigation Framework Leadership Group’s  activities. We reviewed federal documents and websites to identify  examples of instances in which federal programs and funding sources  designed for other purposes, such as disaster funding, have been used to  invest in climate resilience projects.

To identify key steps that provide an opportunity for the federal  government to strategically prioritize climate resilience projects for federal  investment, we reviewed our prior work related to risk management,  climate change, climate resilience, and hazard mitigation, including our  Disaster Resilience Framework and enterprise risk management report.  We also reviewed approximately 50 reports and other sources to identify  steps that provide an opportunity for the federal government to  strategically identify high-priority climate resilience projects, several of  which contained examples of potential criteria the federal government  could consider when prioritizing these projects. We identified these  reports and other sources through our review of other reports and related  news, discussions with stakeholders, and searches of databases such as  Scopus and ProQuest. The reports we reviewed included climate  resilience planning guidebooks that outline steps communities can follow  to design a resilience plan to address climate risks. We also interviewed  stakeholders with relevant expertise to gather information on key steps  the federal government could take and criteria it could consider to  strategically prioritize climate resilience projects for federal investment.  During the course of this work, we identified domestic and international  examples of governments that invest in climate resilience and related  projects. We selected two of these examples for more in-depth review  and presentation in the report: the state of Louisiana’s coastal master  planning effort and the country of Canada’s Disaster Mitigation and  Adaptation Fund. These examples represent distinct approaches for  investing in high-priority projects that help communities adapt to emerging  risks such as those associated with climate change. We selected these  examples for further review because they focus on projects that are large  in scale; are of national or statewide significance; address multiple risks;  represent well-defined, current processes for identifying and prioritizing  projects; and had sufficient information available to understand their  approach.

To examine the strengths and limitations of options for focusing federal  funding on high-priority climate resilience projects, we identified relevant  examples of the strengths and limitations of federal funding options in  several of the reports we mentioned above. Where appropriate, we  supplemented this review with a review of additional reports that  discussed specific financial mechanisms that the federal government  could use to fund large-scale climate resilience projects. We also  interviewed stakeholders to discuss the strengths and limitations of  options the federal government could use to fund climate resilience  projects. When available, we gathered their views on specific funding  sources that the federal government could use to fund large-scale climate  resilience projects and additional steps that the federal government could  take to enable more targeted federal resilience investment.

We conducted this performance audit from January 2018 to October 2019  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the individual named above, Joe Thompson (Assistant  Director), Paige Gilbreath (Analyst in Charge), Taiyshawna Battle and  Celia Rosario Mendive made key contributions to this report. Also  contributing to this report were Colleen M. Candrl, Alicia P. Cackley,  Kendall Childers, Steven Cohen, Christopher Curry, Cindy Gilbert,  Kathryn Godfrey, Holly Halifax, Carol Henn, Susan Irving, Richard  Johnson, Gwendolyn Kirby, Caroline N. Prado, Joseph Maher, Gregory  Marchand, Diana Maurer, Kirk Menard, Tim Persons, William Reinsberg,  Oliver Richard, Danny Royer, Jeanette Soares, Kiki Theodoropoulos,  Sarah Veale, Patrick Ward, Jarrod West, Kristy Williams, Eugene  Wisnoski, and Melissa Wolf.

In 2018 alone, there were 14 separate billion-dollar weather and climate disasters in the United States, with a total cost of at least $91 billion. These costs will likely rise due to climate change.

Investing in climate resilience projects to help communities prepare for hazards such as sea level rise could reduce future costs. The federal government makes ad hoc investments but does not have a strategy for prioritizing projects with the most impact.

We recommended that Congress consider establishing a federal entity to identify and prioritize these projects.

The government’s fiscal exposure from climate change is a topic on our High Risk List.