Applying a FAMiliar Question of Climate Change Scope and Scale: Financial Assurance Mandates and Coastal Risk Management

• Date: 01 August 2018

8-2018 NEWS & ANALYSIS 48 ELR 10675

COMMENT

Applying a FAMiliar Question of

Climate Change Scope and Scale:

Financial Assurance Mandates

and Coastal Risk Management

by Catherine E.B. McCall

Catherine E.B. McCall is the Director of the Center for Coastal Planning at the Maryland

Department of Natural Resources, Chesapeake and Coastal Services Unit.*

I. Introduction

Just as our coasts have been dened and shaped by their

surrounding lands and waters, t he future scale and s cope

of climate change impacts in a ny one location will—in

part—be dened by geography and surrounding land-

scape. In Preventing Industrial Disasters in a Time of Cli-

mate Change: A Call for Financial Assurance Mandates,

Mr. Arnold presents a case for how Financial Assura nce

Mandates (FAMs) such as insurance or surety bonding

could be utilized eectively to reduce the risk communi-

ties face from climate-driven impacts that result in coasta l

industrial disasters. Onshore and oshore, our coasts and

oceans support a wide variet y of livelihoods, economies,

and natural resources. According to the National Oceanic

and Atmospheric Admin istration’s Economics: National

Ocean Watch data, the coastal zone of the United States

contributed $7.9 trillion toward the Gross Domestic Prod-

uct (GDP) and supported 54.6 million jobs in 2014.1 If the

nation’s coastal counties comprised an individual country,

it would have the third-largest GDP in the world behind

the United States and China.2 Coasta l industries are par-

ticularly vulnerable to episodic storm events, and chronic

hazards related to ooding, inundation and shoreline ero-

sion will continue to be driven and exacerbated by climate

change. Other climate impact s not associated only or so

1. N’ O  A A. (NOAA) O  C

M, S D S (2017), https://coast.noaa.gov/

digitalcoast/training/socioeconomic-data-summary.html.

2. See NOAA O  C M, Fast Facts: Economics and De-

mographics, https://coast.noaa.gov/states/fast-facts/economics-and-demo-

graphics.html (last visited Apr. 4, 2018).

closely with coastal3 environments —such a s tempera-

ture uctuations or extreme heat, drought, precipitation

changes, and wildre—could also pose signicant direct

and indirect risks to coa stal industries that could result in

industrial disasters. e author’s arguments for how FAMs

could help to reduce regulatory and enforcement burdens

related to climate-driven industrial disasters could be a

positive step toward focusing limited public resources on

advancing other climate actions and limiting climate risk

and impact costs in other sectors.

II. Industrial Development and

Our Coasts

e author bases much of his argument for climate FAMs

on the premise that they can be used to reduce commu-

nity and environmental risk when applied primarily to new

industrial development in vulnerable coasta l areas. As non-

water dependent uses of our coastlines increase, the pop-

ulation living, recreating a nd working by our coasts also

grows, as do the investments in transportation and other

infrastruct ure. In 2010, 123.3 million people, or 39% of

the nation’s population, lived in counties bordering the

shoreline, and by 2020 this number is expected to increase

by an additional 10 million people, or 8%.4 erefore, the

author is correct in stating that the a ssociated risk from

industrial accidents resulting from accelerating climate

change, rising sea levels, a nd increasingly extreme weather

is expansive and growing. However, applying FAMs pri-

marily to new industrial de velopment may limit their scope

3. In this Comment, the term “coastal” refers to both ocean- and embayment-

fronting areas of the coastal environment.

4. NOAA, What Percentage of the American Population Lives Near the Coast?,

N’ O S., https://oceanservice.noaa.gov/facts/population.html

(last visited Apr. 4, 2018).

*e opinions and statements outlined in this Comment are the

personal opinions of the author and should not be interpreted to

represent any opinion other than those of the author.

Copyright © 2018 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.