Storms Ahead: Climate Change Adaption Calls for Resilient Funding
Janet E. Milne
The challenges of reducing greenhouse gas emissions have dominated international negotiations and national debates about climate change, often leaving the issue of adaptation to climate change in the shadows. The focus on mitigation is understandable, given the urgent need to take measures now to avoid greater future damage coupled with the fact that adaptation to climate change is a long-term undertaking with tangible, immediate demands on society that are now starting to emerge. Nevertheless, society is beginning to feel the impacts of climate change, underscoring the need to think more seriously about how to prepare for and minimize those impacts and how to finance the measures that society should take. As a recent United States assessment found, “[d]espite emerging efforts, the pace and extent of adaptation activities are not proportional to the risks to people, property, infrastructure, and ecosystems from climate change.”
This Article examines the role of environmental tax policy in addressing climate change adaptation, using the United States as a case study. To provide a concrete setting, it focuses on the challenges of adapting to extreme weather events. It draws in particular on the adaptation implications of Hurricane Sandy, which devastated the eastern United States in October 2012, flooded New York City’s subways and airports, left 8.5 million people without power, and prompted the United States Congress to appropriate $51 billion in disaster funding. Whether or not the storm was linked directly to climate change, it illustrates the tremendous costs of extreme weather, the need to invest in resilience, and the challenges of financing efforts that will restore communities and protect them from future damage.
After exploring the gap between adaptation costs and funding in general (Part I) and in the case of Hurricane Sandy in particular (Part II), this Article considers how environmentally related taxes might help fill the gap between the costs of adaptation in the face of extreme weather events and available public resources (Part III). It highlights the need to earmark revenue for adaptation to ensure that adequate funds are available for shortterm responses and long-term investments, and it explores, on an illustrative basis, several types of taxes that might generate new, dedicated revenue streams. Although countries with developed economies may be in a stronger position to find resources to build resilience than those with emerging economies, this case study underscores the fiscal challenge that faces even developed economies and the potential role of environmentally related taxes in meeting that challenge.
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