S. Hrg. 113–711 

EXTREME WEATHER EVENTS: THE COSTS OF 

NOT BEING PREPARED 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

FEBRUARY 12, 2014 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
EXTREME WEATHER EVENTS: 

THE COSTS OF NOT BEING PREPARED 
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WASHINGTON : 

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88–275 PDF 2015

S. Hrg. 113–711 

EXTREME WEATHER EVENTS: THE COSTS OF 

NOT BEING PREPARED 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

FEBRUARY 12, 2014 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

RICHARD J. KESSLER, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

KRISTINE V. LAM, Professional Staff Member 

KEITH B. ASHDOWN, Minority Staff Director 

CHRISTOPHER J. BARKLEY, Minority Deputy Staff Director 

WILLIAM H.W. MCKENNA, Minority Investigative Counsel 

LAURA W. KILBRIDE, Chief Clerk 

LAUREN M. CORCORAN, Hearing Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Senator Johnson ............................................................................................... 4 

Senator Begich .................................................................................................. 4 

Prepared statements: 

Senator Carper ................................................................................................. 37 

WITNESSES 

WEDNESDAY, FEBRUARY 12, 2014 

Hon. David F. Heyman, Assistant Secretary for Policy, U.S. Department 

of Homeland Security, and Caitlin A. Durkovich, Assistant Secretary for 

Infrastructure Protection, National Protection and Programs Directorate, 

U.S. Department of Homeland Security ............................................................. 7 

Mark E. Gaffigan, Managing Director, Natural Resources and Environment 

Issues, U.S. Government Accountability Office ................................................. 12 

Collin P. O’Mara, Secretary, Department of Natural Resources and Environmental Control, State of Delaware ..................................................................... 21 

Paul H. Kirshen, Ph.D., Research Professor, Environmental Research Group, 

Department of Civil Engineering, and Institute for the Study of Earth, 

Oceans, and Space, University of New Hampshire ........................................... 24 

Lindene E. Patton, Chief Climate Product Officer, Zurich Insurance Group, 

Ltd. ........................................................................................................................ 26

ALPHABETICAL LIST OF WITNESSES

Durkovich, Caitlin A.: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 40 

Gaffigan, Mark E.: 

Testimony .......................................................................................................... 12 

Prepared statement .......................................................................................... 51 

Heyman, Hon. David F.: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 40 

Kirshen, Paul H., Ph.D.: 

Testimony .......................................................................................................... 24 

Prepared statement .......................................................................................... 71 

O’Mara, Collin P.: 

Testimony .......................................................................................................... 21 

Prepared statement .......................................................................................... 64 

Patton, Lindene E.: 

Testimony .......................................................................................................... 26 

Prepared statement with attachment ............................................................. 79 

APPENDIX 

Statement for the Record from National Electrical Manufacturers Assocation . 110 

Additional information submitted by Ms. Patton ................................................. 112 

Reports submitted by Mr. O’Mara .......................................................................... 117 

Responses for post-hearing questions for the Record from: 

Mr. Heyman/Ms. Durkovich ............................................................................ 415 

Mr. Gaffigan ...................................................................................................... 421 

Ms. Patton ......................................................................................................... 426 

(1) 

EXTREME WEATHER EVENTS: THE COSTS OF 

NOT BEING PREPARED 

WEDNESDAY, FEBRUARY 12, 2014 

U.S. SENATE, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 10:03 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Committee, presiding. 

Present: Senators Carper, Begich, and Johnson. 

OPENING STATEMENT OF CHAIRMAN CARPER 

Chairman CARPER. Well, welcome one and all. Great to see our 

witnesses. Great to be here with Senator Johnson, and we will call 

this hearing to order. I appreciate the effort of all of you to get here 

today. I am glad we are having the hearing today and not tomorrow, because if we were having it tomorrow, we might not be having that hearing. 

Today’s hearing, as you know, is focused on the costs of not being 

prepared for extreme weather events and exploring the ways that 

our Federal Government can increase resiliency in our communities—and I would just underline this—and save money in the 

long haul. Deficits are coming down—they are still too much— 

from $1.5 trillion, I think, 4 years ago, and this year we expect to 

be down to only $550 billion. That is still way too much, and we 

have to continue to look in every nook and cranny and figure out 

how do we save more money, and that is the focus of today’s hearing. 

But I will try to take about 5 minutes for my opening statement 

and yield to Senator Johnson. I am delighted that he is here. And 

then we will recognize our first panel of witnesses. Each witness 

will have about 5 minutes to offer your statement to our Committee. Following your statements, we are going to have a question-and-answer period. And then a second panel of witnesses will 

come forward, and we look forward to hearing from you as well. 

Unfortunately, extreme weather appears to be the new norm. 

Events like Superstorm Sandy, which came to my shores and our 

shores in the Mid-Atlantic a year or so ago, recent wildfires in 

other parts of the country, dangerous tornados, and historic 

droughts may well be just the tip of the iceberg of what is to come. 

And even today, the East Coast is preparing for yet another snow 

storm while the West Coast is experiencing a historic drought and 

increased fire danger with no end in sight. I have a friend who is 
2 

from Australia, and he tells me that they had the hottest weather 

in their history. So go figure. It is just sort of a crazy world that 

we live in right now. 

For years, I have been working with a number of our colleagues 

to address the root causes and unfolding effects of what I believe 

is one of the biggest challenges of our generation, and that is, climate change. 

According to the U.S. Global Change Research Program, extreme 

weather events have increased in frequency over the past 50 years 

or so and are expected to become even more common, more intense, 

and more costly. 

But let me just make a point and I will underline this, if I could: 

Today’s hearing is not intended to hash out climate science. That 

is not what we are trying to do. Instead, it is about trying to find 

common ground. 

As our country debates how to address our changing climate and 

the extreme weather I believe it is likely causing, our witnesses 

will deliver to us a clear message, and that is, put simply, the increase in frequency and intensity of those extreme weather events 

are costing our country a boatload of money—not just the cost that 

is measured in lives that are impacted but in economic and financial costs as well. 

For example, the damage from a storm still fresh in many of our 

minds, Superstorm Sandy, which impacted, again, my home State 

of Delaware and many of our neighbors, is estimated to have cost 

our economy $75 billion—think about that—$75 billion in financial 

damages. And that is enough to run a number of departments of 

our Federal Government and have money left over. That is just one 

storm. 

We are also hearing reports about the devastating effects of California’s severe drought and how it is impacting the wildfire season 

in that State and across the West. Not only are wildfires growing 

in frequency and severity, but we are now seeing severe fires and 

wildfire conditions in winter and spring, well beyond the traditional wildfire season of summer and early fall. These fires are 

enormously expensive to fight and to recover from, and they pose 

serious threats to lives and property, damaging homes and businesses alike. 

According to a 2013 report by insurance company Munich Re, the 

nearly 40 wildfires last year in the United States cost our economy 

over $1 billion. 

These economic damages can deliver a devastating blow to many 

local communities, to States, as well as to our own Federal Government. 

The Federal Emergency Management Agency (FEMA) alone has 

obligated, I am told, over $80 billion in Federal assistance for disasters declared in fiscal years (FY) 2004 through 2011. 

However, the cost to the Federal Government is not just limited 

to disaster relief. As an insurer of both property and crops, the government faces additional significant fiscal exposure. 

For example, since the creation of the National Flood Insurance 

Program (NFIP) in 1968, through December 2013 FEMA’s debt 

from insurance payments to that program have totaled approximately $24 billion. And even before Superstorm Sandy, the total 
3 

debt from payments through the National Flood Insurance Program was almost $18 billion. 

The costs of these weather events keep going up at a time when 

we are trying to bring our government spending down. That is one 

of the reasons why, for the first time, the Government Accountability Office (GAO) last year listed climate change as one of the 

biggest fiscal risks facing our country in its high-risk list report. 

Just to remind us all, every 2 years, at the beginning of every 

Congress, GAO gives us a high-risk list. Senator Johnson, you have 

heard me say this before. We use that as our to-do list on this 

Committee, to figure out other new ways or old ways to save money 

and get better results for less money, and we are thankful for that 

to-do list. 

But in response to this historic GAO announcement, House Oversight and Government Reform Committee Chairman Darrell Issa 

stated, and this is a quote from Darrell: ‘‘the Comptroller General 

has made it very clear that we have not prepared properly, that the 

Federal Government has a financial risk that we have not properly 

mitigated, I think is a wake up call to all of us.’’ 

I could not agree more. GAO’s report is a call to action for both 

Congress and the Administration, warning us that our country 

must start thinking now about how to better prepare and adapt to 

a new climate reality. Today, our witness from GAO will further 

detail these financial risks to our communities and to our taxpayers and, hopefully, offer some commonsense solutions that my 

colleagues and I can work with the Administration to see implemented. 

Fortunately, this Administration, along with a number of State 

and local governments, are starting to focus their efforts on preparing for the very real threats posed by extreme weather events 

and climate change. 

Last fall, President Obama issued an Executive Order (EO) on 

Climate Preparedness that incentivizes investments in more robust 

roads and buildings that may be more expensive, but can hold up 

during more intense storms. 

I commend the President’s approach and believe it is very timely 

as rebuilding efforts continue from Superstorm Sandy and other recent natural disasters. 

I look forward to hearing more about the President’s efforts and 

efforts by States like Delaware and a bunch of other States to do 

a better job protecting our communities and our taxpayer dollars 

from these challenges. 

As we continue to debate how to reduce our deficits, I believe we 

cannot afford to ignore the impacts these weather events are having on Federal spending. 

A little extra planning—combined with prudent, targeted investments—can go a long way in saving both lives and taxpayers dollars. I believe this is a perfect example of that very wise maxim 

I used to hear from my grandmother all the time: An ounce of prevention is worth a pound of cure. 

Thanks again to our witnesses for being here. We are eager to 

hear your testimony. 

With that, I am going to turn it over to our Acting Ranking 

Member, Senator Johnson from Wisconsin, for any thoughts, Ron, 
4 

that you would like to offer. I am delighted that you are here. 

Thanks for coming. 

OPENING STATEMENT OF SENATOR JOHNSON 

Senator JOHNSON. Thank you, Mr. Chairman. Of course, I am 

mindful the reason I am sitting in this chair is because Dr. Coburn 

is not here, so he is in our thoughts and prayers. 

Chairman CARPER. He sure is. 

Senator JOHNSON. I want to thank you and I want to thank our 

witnesses, and I am looking forward to the testimony. 

When it comes to this issue, the questions I am going to be looking to have answered is, first and foremost, since I have been here 

and have been looking into this issue, we are really declaring Federal disaster declarations on a much more frequent basis. Now, is 

that because we really have a higher incidence of the types of disasters that require that, or are we just too quick to declare those 

disasters? 

I am afraid that if we have an overreliance on the Federal Government’s help, is that restraining the mitigation—the new word I 

am hearing is ‘‘resilience’’—in terms of how we prepare? Are we 

being penny-wise and pound-foolish by not spending the money up 

front to mitigate? And, again, is the overreliance on Federal help 

when these disasters hit, everybody is expecting the Federal Government to come in and pay for things as opposed to actually mitigating these risks ahead of time? 

And so from my standpoint, coming from the private sector, I certainly understand that a private insurance market provides very 

strong discipline in terms of mitigating risks, whether it is fire risk 

in a plant, basically insurers come in there and say, listen, if you 

put in sprinkler heads every 6 feet apart versus every 24 feet 

apart, you are going to be able to mitigate that risk, and you are 

going to be able to lower your insurance price. So I really have not 

experienced that private sector insurance market is a very good 

discipline to those risk mitigation efforts, and, those are the kind 

of questions I am asking in terms of how can we certainly utilize 

the Federal Government in the most efficient way, because, like 

you said, Mr. Chairman, we do not have the money to do all these 

things. 

So, again, I look forward to the testimony. 

Chairman CARPER. Senator Johnson, thanks so much. 

We have been joined by a fellow from a little State, Alaska. 

[Laughter.] 

A little State with a big population, and a couple of great Senators. 

Senator BEGICH. Yes, there you go. 

Chairman CARPER. Mark, would you like to say a word or two? 

OPENING STATEMENT OF SENATOR BEGICH 

Senator BEGICH. You bet. Small population, but a State with a 

big punch. But I would say in Homer, Alaska, I think last week we 

had green grass, so things are definitely changing. 

First, Mr. Chairman, I would like to read a statement for the 

record, if that is OK, and I apologize I will not be able to stay. This 
5 

is a fairly important issue, especially when you talk about extreme 

weather events and how to prepare for them. 

But first let me say, Mr. Chairman, I want to thank you and I 

appreciate you holding this hearing to examine what I consider the 

true costs of not being prepared for impacts of extreme weather. 

We are about to feel it. As I drove in today, I drove across salt, because they are waiting for snow to fall, to melt it. In Alaska, that 

would be unheard of. But that is the way it works. 

Now, the weather conditions will also change, and I am sure we 

will have power outages and many other things. We understand 

very extreme conditions in Alaska. A normal winter day in Barrow 

or Fairbanks, we will get to below zero many times, and in some 

cases that would be extreme down in the lower 48 but not in Alaska. 

Alaska truly is on the front lines in terms of changing climate. 

The effects of extreme weather and existing challenges facing our 

communities, including retreating sea ice, rapidly eroding shorelines, thawing permafrost, ocean acidification, are impacting our 

economy on many different levels. This reality puts many communities at risk throughout our State. 

The U.S. Army Corps of Engineers (USACE) and the GAO have 

both released reports identifying Alaska villages imminently 

threatened by erosion. Many of these villages have experienced incredible extreme weather, 30-plus villages at risk of literally falling 

into the ocean or disappearing totally. 

Flooding wiped out a village in Alaska called Galena, totally. We 

had a whole village wiped out by flooding and no place to evacuate. 

The closest place was 270 miles away. It all had to be done by air 

in order to move these people out quickly, and now they are trying 

to rebuild in a very short time, and the winter set in, and it was 

also very difficult. 

I know when people talk about climate change, they get nervous. 

Do they want to debate the science? I am telling you, climate 

change is occurring. My State is the example of it, of what the impacts are, and it is extreme. And we are seeing the impacts economically and from all levels. 

Our State has the longest coastline in the United States. It has 

incredible beauty but also has economic value. It also has enormous vulnerabilities in the sense of the impacts it has. Alaska’s 

unique position as an Arctic State presents a variety of advantages 

to leverage and challenges to overcome. 

I have to tell you, Alaska is clearly on the front line with dealing 

with the issue of climate change. We have our own task force set 

up. We have been active in it. We have focused on what we can 

do to mitigate the issues and these extreme changes in weather 

patterns that are impacting us on a day-to-day basis in Alaska. 

Let me say that, as the President’s Climate Action Plan moves 

forward and the State and local and tribal leaders’ task force on 

climate change preparedness begins to develop recommendations, I 

am confident investing in mitigation is the right decision. We always spend the time, Mr. Chairman, always after the fact, picking 

up the pieces and the costs are huge. We had a hearing in Alaska 

through the Subcommittee that I chair here with FEMA and the 

Corps talking about what we can do before these situations occur 
6 

when we know they are going to happen. We have 30-some villages 

on the list. We know they are going to fall into the ocean. Now, we 

can do something now, or we can wait until something bad happens, and then we are going to call FEMA, and FEMA is going to 

be writing some checks. That is the worst approach in the sense 

of dealing with this issue. We can do this in a much better way. 

I know, Mr. Chairman, you invited an individual, Mike Williams, 

Sr., who is an Iditarod musher but also an incredible native leader 

from Aniak who was going to be on the panel today, but I know 

he could not attend. If I could just ask for the Committee to insert 

his comments and his testimony into the record, if that is OK. 

Chairman CARPER. Without objection. 

Senator BEGICH. Let me just end and say, Mr. Chairman, as the 

Chair of the Subcommittee on Emergency Management that deals 

with disaster relief, emergency preparedness, first responders, mitigation in this Committee, we have had several hearings on these 

issues, and I have sat here with insurance folks that talk about 

how they are adjusting their risk analysis, how they are making 

sure that they are now seeing more severe weather patterns, and 

they are not here to debate science. What they were here to say 

was that risk is greater. Patterns are changing. They are more 

compacted, and they are much more severe. So, therefore, the risk 

analysis goes into play and, therefore, rates go up. I know this as 

an owner of commercial property. I know my rates have not been 

flat for the last 10 years, because they are analyzing the risk and 

I get that. But there is a risk that everyone is paying today for the 

lack of action in regards to mitigating these situations. 

So I want to again say to the Chairman, thank you for holding 

this hearing. It is a hard issue to grapple with because there are 

political views on climate change, but that is not the issue. The 

issue is it is happening. We can argue over it all we want. But in 

my State, we see it every single day. We have disaster after disaster. We have huge costs that are associated with it. And even 

though we are far away, 5,000 miles away, small villages, literally 

their buildings and houses are falling into the ocean. This is not 

a hypothetical situation or theory. It is real. 

So I really appreciate the work you are doing here, and I hope 

the Committee continues to talk about this. I know and I agree 

that we cannot bear all of the costs. That is just reality. But how 

we manage it, from everything from our building codes all the way 

up to what we do here on the Federal level, is critical to understand how we are going to manage this so we do not have these 

huge costs borne by the private sector, individuals, or the government. 

So I look forward to this, and thank you very much. 

Chairman CARPER. We are just glad that you could join Senator 

Johnson and me. Thanks so much for coming and for your comments. 

Ron, when Senator Begich was speaking, I was reminded of, of 

all people, Senator Mike Enzi from Wyoming. And as my colleagues 

know, I oftentimes cite him. He may be here later today. But he 

has his 80/20 rule that is one of his guiding principles in terms of 

how to get things done. And the 80/20 rule is basically we agree 

on 80 percent of the stuff here in Congress, we disagree maybe on 
7 

1The joint prepared statement of Mr. Heyman and Ms. Durkovich appears in the Appendix 

on page 40. 

20 percent. Let us just focus on the 80 percent that we agree on, 

and we will set the other 20 percent aside until another day. And 

today I think we are going to focus on the 80 percent that we can 

agree on and help chart a path for not just the Congress but for 

our country. 

One of the people who is not here yet—he will probably be here 

in a little bit—is the Senator from Arkansas, Mark Pryor, and they 

have a saying in Arkansas: Whenever you see a friend—and Mark 

Pryor said this to me about a million times. He will say, ‘‘Hey, 

man.’’ And your name is Heyman. [Laughter.] 

And I was just hoping Mark would get here so he could introduce 

you. He could say, ‘‘Hey, man.’’ But, David Heyman, we are happy 

to see you, Assistant Secretary for Policy at the Department of 

Homeland Security (DHS). Mr. Heyman heads the office that is responsible for strengthening our Nation’s homeland security by developing and integrating department-wide policies, planning, program, and strategies. 

Caitlin Durkovich is the Assistant Secretary for Infrastructure 

Protection at the Department of Homeland Security. In this role 

she leads the Department’s efforts to strengthen the public-private 

partnerships and coordinate programs to protect the Nation’s critical infrastructure, assess and mitigate risk, build resilience, and 

strengthen incident response and recovery. It is nice to see you 

again. Welcome. 

And last but not least, Mark Gaffigan. Mark is the Managing Director for the U.S. Government Accountability Office’s Natural Resources and Environmental Team. The Natural Resources and Environmental Team is responsible for GAO’s assessments of Federal 

efforts to manage our Nation’s land and water resources, protect 

the environment, ensure food safety, manage agricultural programs, ensure a reliable and environmentally sound energy policy, 

and meet our Nation’s science challenges and address the United 

States and international nuclear security and cleanup. That is a lot 

to do for one person. 

Each of you has about 5 minutes to read your opening statement. 

If you run a little bit over that, that is OK. If you go way over that, 

we will have to rein you in. The full content of your written statement will be included in the record, and with that, we are going 

to recognize Mr. Heyman, also known, as ‘‘Hey, man.’’ Welcome. 

TESTIMONY OF THE HON. DAVID F. HEYMAN,1 ASSISTANT SECRETARY FOR POLICY, U.S. DEPARTMENT OF HOMELAND SECURITY, AND CAITLIN A. DURKOVICH, ASSISTANT SECRETARY FOR INFRASTRUCTURE PROTECTION, NATIONAL 

PROTECTION AND PROGRAMS DIRECTORATE, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. HEYMAN. Well, thank you. A quick aside. Senator Pryor has 

said that to me for now over 30 years as I served as his vice president when he was a student government leader in my high school. 

His political career has skyrocketed because of my service to him. 

[Laughter.] 
8 

Thank you, Chairman Carper—— 

Chairman CARPER. This story just keeps getting better. [Laughter.] 

Mr. HEYMAN. Thank you, Chairman Carper, Senator Johnson, 

and distinguished Members of the Committee. And my best wishes 

to Senator Coburn and his family. It is a pleasure to be here this 

morning to discuss the impact of extreme weather and what the 

Department of Homeland Security is doing to improve the preparedness and resilience of our communities and Nation. This represents one of the most significant areas where we can all agree, 

I think. Investment today will help us save billions in the future. 

Over the past decade, an unprecedented number of weather-related disasters—hurricanes, floods, droughts, wildfires, crop 

freezes, and winter storms—have hit the United States, leaving 

devastated communities and billions of dollars of damage in their 

wake. In 2011, we experienced 14 natural catastrophes exceeding 

$1 billion in cost each. That is a record number. We had a record 

98 presidentially declared disasters. In 2012, we faced Hurricane 

Sandy, the largest Atlantic hurricane on record and the second 

costliest to the Nation, damaging or destroying more than 300,000 

homes in New York, 72,000 in New Jersey, and costing billions in 

damage. 

According to Munich Re, the world’s largest risk insurer, weather-related catastrophes over the past three decades have hit North 

America much harder than the rest of the world. Total economic 

losses in the United States total approximately $1.15 trillion over 

the last 30 years. Without a concerted effort, national resilience effort, the trend is likely to continue. 

The Department of Homeland Security is responsible for providing the coordinated, comprehensive Federal response in the 

event of a terrorist attack, natural disaster, or other large-scale 

emergency while working with State, Federal, local, tribal, territorial, and private sector partners so that we can ensure swift and 

effective recovery. 

Over the past several years, we have made a significant shift in 

our thinking and in our practice of preparing for, mitigating 

against, and responding to disasters. And I can summarize that in 

one word: ‘‘resilience.’’ Resilience is the ability to anticipate, prepare for, and adapt to changing conditions and withstand, respond 

to, and rapidly recover from disruptions. 

In May 2009, President Obama took a significant step toward facilitating and institutionalizing national resilience when he merged 

the Homeland Security Council and National Security Council into 

a single structure and created a Resilience Directorate within the 

National Security Council. This Directorate manages resilience policy and operates alongside the Counterterrorism Directorate. This 

action established resilience as a Homeland Security pillar and priority which was called out for the first time in the President’s National Security Strategy. 

DHS affirmed this prioritization in its Quadrennial Homeland 

Security Review (QHSR), in 2010, promoting insurance of resilience 

to disaster as one of the Department’s core missions and responsibilities. 
9 

But the question is: How do you create and foster resilience? Establishing the concept of resilience in doctrine is an essential first 

step, but it is only one piece of proactively preparing for potential 

disasters and readily responding to a situation as it occurs. 

Across the Department, from FEMA to the National Protection 

and Programs Directorate (NPPD) to Science and Technology 

(S&T), we work with a wide array of government, private and nonprofit, and faith-based organizations to build and foster resilience— 

not as a concept but as an applied reality. FEMA is leading implementation of the National Preparedness System. My colleague here 

today will discuss our critical infrastructure security and resilience 

programs. And in my office, the Office of Policy, we coordinate resilience initiatives and policy across the Department and are working to create the framework that fosters resilience and gives a coherent baseline. I would like to share one example of some of the 

important work that we have been doing. 

We are creating a program called ‘‘Resilience STAR’’ based on the 

Energy STAR concept, which you probably are familiar with for appliances in your own home. In this case, it will help ensure that 

homes will be built to voluntary standards, stronger standards that 

will incur far less damage by disasters, protecting lives, livelihoods, 

and helping communities respond to and recover from disasters 

much more quickly. Ultimately, DHS aims to extend the Resilience 

STAR program beyond homes and facilities, and into critical infrastructure, helping to recapitalize the built environment across 

America in the long term, one home, one building, one bridge at a 

time. Our investments in resilience will pay significant dividends 

for the country. It is efficient and it is cost-effective. 

Homeland Security in the end is simply not about government 

action; rather, it is also about collective strength of the entire country. It is a shared responsibility that requires the participation of 

individuals, communities, the private sector, as well as State, local, 

and the Federal Government to be truly effective. The Department’s Ready.gov website serves as a resource for citizens and businesses and communities so they can stay informed and take appropriate prepared measures. 

This is, as I said, a shared responsibility that requires that we 

all work together to marshal all the resources to withstand whatever threats and hazards we may face. It is truly the actions of 

each of us that in the end will ensure the safety and security for 

all of us. 

I look forward to your questions. Thank you. 

Chairman CARPER. Mr. Heyman, thank you very, very much. 

Ms. Durkovich, please proceed. 

Ms. DURKOVICH. Thank you, Chairman Carper, Senator Johnson, 

and distinguished Members of the Committee. I, too, extend my 

thoughts and prayers to Senator Coburn and his family. 

It is a pleasure to appear before you today to discuss the Department’s efforts to enhance the resilience of the Nation’s critical infrastructure to extreme weather. Our daily life, economic vitality, 

and national security depend on critical infrastructure. Infrastructure provides essential services and functions, but it is easily taken 

for granted. Often it is only when an incident occurs and service 
10 

is disrupted that attention is drawn to the importance of the infrastructure itself. 

Threats to our critical infrastructure are wide-ranging, including 

aging and failing components, cyber threats, acts of terrorism, and 

climate change and extreme weather. The consequences of these 

threats to the public and private sectors can be seen in the events 

over the last decade. Hurricanes Katrina and Sandy, the tornados 

in the Midwest, wildfire and flooding across the Western States, 

the California drought, the extreme cold in the Northwest all demonstrate how weather can disrupt the availability of lifeline functions and other critical services. 

Just as terrorist attacks threaten our communities, extreme 

weather disrupts the security of our Nation. Extreme weather 

strains our resources, diverts attention from counterterrorism efforts, serves as a threat multiplier that aggravates stressors both 

at home and abroad, and destabilizes the lifeline sectors on which 

we rely. Higher temperatures and more intense storms can cause 

inefficient infrastructure operations and damaging disruptions that 

can result in cascading effects across our communities. 

Hurricane Sandy is a vivid example of the potentially devastating impacts extreme weather can have on critical infrastructure and demonstrates how interdependencies between infrastructure systems can magnify impacts and delay restoration. 

Additionally, the increasing role of cyber and communication networks creates new vulnerabilities and opportunities for disruption. 

Two years ago, high temperatures and high demand tripped a 

transformer and transmission line in Yuma, Arizona, starting a 

chain of events that shut down the San Onofre nuclear power 

plant, disabling automated switching and distribution Supervisory 

Control and Data Acquisition (SCADA) systems, leading to a largescale power outage across the entire San Diego distribution system. 

Strides have been made to address vulnerabilities that lead to such 

outages, but additional progress is needed to protect our interrelated systems. 

The Nation must take a long-term perspective and account for 

evolving threats and hazards, including those caused by extreme 

weather that are linked to changes in climate, especially with regards to building resilience for critical infrastructure. Built infrastructure has a 10-year design build phase and a life span of 50 

years or more and is expected to operate under stressor conditions 

that sometimes we cannot even imagine. 

As a result, it is a prudent investment to incorporate resilience 

into asset and system design, promote mitigation and built infrastructure, and to empower owners and operators with decisionmaking tools rather than to rebuild or redesign infrastructure after 

incidents occur. 

To achieve infrastructure resilience, owners and operators must 

be able to minimize the disruption to essential services provided to 

our communities regardless of the hazard or threat; and when a 

disruption occurs, ensure essential services and functions are 

brought back to full operations as quickly as possible. 

One year ago today, President Obama issued Presidential Policy 

Directive (PPD) 21, Critical Infrastructure Security and Resilience, 

and Executive Order 13636, Improving Critical Infrastructure 
11 

Cybersecurity. PPD–21 directed DHS to develop an update to the 

National Infrastructure Protection Plan (NIPP), which was released in 2013. The NIPP 2013 envisions a nation in which physical and cyber critical infrastructure remain secure and resilient. 

Essential services and products continue to be delivered in the face 

of incidents, and communities and businesses adapt to changing 

conditions and rapidly recover from potential disruptions. 

The Office of Infrastructure Protection (IP) is leveraging our core 

capabilities, such as information sharing, capacity development, 

vulnerability assessments, and situational awareness, to support 

owners and operators’ efforts to strengthen resilience to weather. 

As a part of the Hurricane Sandy Rebuilding Task Force, IP and 

other Federal partners worked to develop the Infrastructure Resilience Guidelines, which are sound investment principles to guide 

Federal infrastructure investment as we modernize and adapt infrastructure—simple things such as consistent application of comprehensive science-based data and a regional cross-jurisdictional 

focus for selecting projects. 

Additionally, I co-chair the new Infrastructure Resilience Work 

Group with the Department of Energy under the White House 

Council on Climate Preparedness and Resilience. Through this 

working group, we are coordinating interagency efforts on climate 

preparedness and resilience for the Nation’s infrastructure. The 

working group is studying infrastructures most vulnerable to climate impacts throughout the United States and identifying riskbased mitigation and adoption strategies. This will inform and aid 

the critical infrastructure community with planning and decisionmaking regarding climate preparedness and resilience. 

IP also works with State and local partners through the Regional 

Resiliency Assessment Program to examine a particular industry, 

region, or municipality’s dependence on key lifeline sectors and to 

mitigate the hazards that could disrupt these complex ecosystems. 

This year, we are partnering with the State of Maine to produce 

the first Climate Change Adaptation Plan for the Portland metropolitan area. 

In closing, by increasing the resilience of our critical infrastructure in our communities, we are better prepared as a Nation to the 

myriad of threats and hazards we face. Leveraging the partnership 

framework we have established over the past 10 years, IP will continue to work with owners and operators of critical infrastructure 

to understand the impact of extreme weather and to take steps to 

enhance resilience. 

Thank you very much, and I look forward to answering your 

questions. 

Chairman CARPER. Ms. Durkovich, thank you so much for your 

testimony. Stick around. We will have some questions. 

Mr. Gaffigan, very nice to see you. Please proceed. 
12 

1The prepared statement of Mr. Gaffigan appears in the Appendix on page 51. 

TESTIMONY OF MARK E. GAFFIGAN,1 MANAGING DIRECTOR, 

NATURAL RESOURCES AND ENVIRONMENT ISSUES, U.S. 

GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. GAFFIGAN. Senator Carper, good to see you again, Senator 

Johnson, thank you for inviting me here. Let me also extend best 

wishes to Senator Coburn and his family. I had the fortune to attend one of Senator Coburn’s first hearings when he was on the 

Hill, and he told us afterwards he was going to do some oversight. 

And I think he has followed through on that, so I am very sorry 

he is not able to join us today. 

Chairman CARPER. And he has announced he is going to step 

down at the end of the year, and while he has some health challenges right now, he said that has nothing to do with those. It is 

just a personal decision he and his family have made. But I have 

said to him, ‘‘Well, you are still on the payroll for another 10–1/2 

months, so I know you want to finish strong. And we are going to 

make sure that you do,’’ and he is determined to. So plenty more 

oversight to come. 

Mr. GAFFIGAN. Great. 

I want to make three points. First, there is a lot at stake. We 

have all talked about the numbers in your opening statement. 

There are significant costs from extreme weather; not only to the 

Federal Government, but also to State, local, and tribal governments, businesses, farmers, individuals—in short, everyone. 

Second, there is uncertainty about the specific risks we might 

face from extreme weather and how we can adapt to those changes 

and manage those risks. Complicating this uncertainty is that the 

risks faced and the appropriate adaptation is particular to the situations and the locations of those facing the risks. To borrow from 

the phrase ‘‘All politics is local,’’ all adaptation is local. 

Third, the challenge is to strive for the best, most updated information to help inform specific preparation, resilience, and adaptation so that the investment, preparation, and resilience is most effective. And, as we have explained, funds are tight. 

So let me illustrate what is at stake and describe challenges in 

four areas that are particular to the Federal Government. 

First, the Federal Government has a great deal at stake as an 

insurer of property and crops. In 2012, the National Flood Insurance Program had property coverage of over $1.2 trillion while the 

Federal Crop Insurance Corporation covered $120 billion in crops. 

That is a fourfold increase in the crop insurance coverage since 

2003. 

However, the National Flood Insurance Program has a debt of 

$24 billion as of December 2013, as you pointed out, and the Nation’s crop insurance annual costs have more than doubled from 

$3.4 billion in 2001 to $7.6 billion in 2012. 

Back in March 2007, GAO did a study and found that both of 

these programs’ exposure to weather-related losses had grown substantially and that FEMA and the U.S. Department of Agriculture 

(USDA) had done little to develop the information necessary to understand what those risks were. They have since developed reports. 

Now, those reports—USDA released its report in 2009. The Na-
13 

tional Flood Insurance Program released its report in 2013. They 

recognized the potential risks. They recognized the uncertainty. 

But it is still unclear what actions these programs are going to 

take in the future, and that will have a lot to say for the financial 

solvency of these programs going forward. 

But, also in 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act, which, among many things, required the use 

of information on coastal erosion areas, future change in sea levels, 

and intensity of hurricanes to update its flood maps. Implementation of this law will be key in making changes to the National 

Flood Insurance Program. 

Second, the Federal Government is a significant provider of disaster aid. The number of Federal disaster declarations increased 

from 65 in 2004 to a peak of 98 in 2011, and, as has been mentioned, FEMA has provided over $80 billion in disaster aid during 

those years. And after Superstorm Sandy, Congress provided about 

$60 billion in budget authority for disaster assistance. 

The Federal Government could do a couple things. It could start 

by fully budgeting for these costs to address the fiscal exposure 

that is largely outside of the budget process. And FEMA could also 

develop an updated formula—the formula has not been updated 

since 1986—to determine the capacity of jurisdictions to respond to 

those disasters. 

Third, the Federal Government is the owner and operator of significant infrastructure. The Department of Defense (DOD) alone 

has over half a million buildings and facilities throughout the 

world, including some in vulnerable coastal areas. In addition, the 

Federal Government manages about 30 percent of the Nation’s 

lands, forests, and wildlife. These natural resources face threats 

from extreme weather. 

DOD has recognized the risk to its facilities and is trying to assess the potential impacts and consider what adaptation may be 

necessary at facilities in many different environments. And regarding Federal lands, the Federal resource agencies are also trying to 

incorporate climate-related information at the local level to decide 

what to do. 

Fourth, the Federal Government is both an investment partner 

in public infrastructure and a potential provider of technical assistance. The Federal Government invests billions annually in public 

infrastructure projects. For example, the Congressional Budget Office (CBO) estimates that total public spending on transportation 

and water infrastructure is about $300 billion annually, with about 

25 percent of that coming from the Federal Government and the 

rest from State and local governments. 

Our work has found that incorporating considerations about climate into the planning of this infrastructure that may be in place 

for 50 to 100 years can help avoid the need for assistance in the 

future because the infrastructure can withstand extreme weather. 

However, responsibility for planning and prioritizing these projects 

is primarily at the State and local level. And they may not have 

the information or expertise they need to incorporate climate considerations into their site-specific local projects. Thus, the Federal 

Government is in a position to be a provider of technical assistance, 

helping State and local officials identify and use the best available 
14 

information that is specific to their circumstances while also enhancing access to experts who could help translate that information 

at the local level. 

That concludes my opening statement. I welcome your questions. 

Thank you. 

Chairman CARPER. Thanks. Thanks so much, Mark, for the work 

that you—anybody here on your team, anybody in the audience 

from GAO, would you all raise your hand? 

Mr. GAFFIGAN. The gentleman right behind me, yes. And there 

are plenty more back in the building. 

Chairman CARPER. Well, we just want to say on behalf of Dr. 

Coburn and myself how much we value the work that you do and 

appreciate the opportunity to partner with you. 

Mr. GAFFIGAN. Thank you, Senator. 

Chairman CARPER. I want to first talk a little bit more, about the 

Flood Insurance Program. Senator Johnson and I both voted 

against, as did Dr. Coburn, we voted against the flood insurance 

corrections bill that passed the Senate not very long ago, just earlier this month or late last month. And I go back in time to about 

1990. I was a House Member on the Banking Committee and 

worked, believe it or not, I think with a guy named Tom Ridge, 

who was the ranking Republican on the Subcommittee that I 

chaired, and one of our focuses was the National Flood Insurance 

Program because we were concerned that the program was underwater. And here all these years later, it still is. And given the kind 

of changes we are seeing in weather, it is getting to be more underwater. And we adopted some changes to the legislation in the last 

year or two, and the costs as they come to bear on people who live 

in areas that are prone to flooding are in some cases very steep. 

There are concerns about flood mapping and so forth that people 

who were not living in areas where they used to have flooding, now 

they do. And so the question is: What do we do, if anything, in response to those conditions, those changing conditions, and to try to 

be humane but also to realize that there is a lot of money at stake 

here? I think doing nothing is not an option. 

So the Senate has passed a bill—it is over in the House, and we 

are not sure what, if anything, the House is going to do, but my 

guess is that there will be an opportunity here to find a principled 

compromise that actually makes progress toward reducing this unfunded liability that is not cruel or heartless with respect to people 

whose homes, whose businesses are at risk. 

I know how closely you have been following what the Senate has 

done, the state of play, but if any of you have any advice for us 

as to how to proceed and what might be a principled—some of the 

elements of a principled compromise, I would welcome hearing 

those. And my guess is that we are going to have the opportunity 

later this year to work more closely with you and with the Administration. The Administration, the President is not crazy about this 

bill that the Senate has passed, as you know. So there is an opportunity for the Administration to weigh in and be part of the solution. 

Any thoughts you have with us on that? 

Mr. GAFFIGAN. Just very quickly, and, again, flood insurance is 

not necessarily in my portfolio. I have a lot of issues, but not that 
15 

one. I think it is a tradeoff between the affordability of the program 

and the individuals who have to pay the premiums. At the end of 

the day, someone has to pay for this, and it is a question of the 

balance between the taxpayer and the individual businesses, and 

homeowners, who own flood insurance. 

I think some of the things talked about in Biggert-Waters relate 

to building in consideration of future risks. Trying to build in some 

resiliency going forward in that program would help minimize the 

risks so that we do not have to pay the higher premiums because 

we did not anticipate that high risk down the road. I think that 

is where the area of compromise is probably best sought. 

Chairman CARPER. OK. Ms. Durkovich, Mr. Heyman, anything 

you want to mention on that before we go to another question? You 

do not have to. If you have something you want to say, go ahead. 

Mr. HEYMAN. I just want to say that FEMA has actually been 

working closely with both the House and Senate on this. This is obviously a concern that we hear about, and I know that there are 

possibly going to be amendments down the road. 

Right now, our authority is only to complete a study on affordability. We have no authority to address the affordability of actual 

flood insurance. But we are happy to work with you to help try to 

think this through. 

Chairman CARPER. All right. Thanks. 

I am going to come back to Mark Gaffigan for my next question. 

This deals with prioritizing risks. I think in your testimony you 

may have mentioned three or four areas where the government 

could limit its fiscal exposure when it comes to climate change and 

to extreme weather events. And within those three or four areas, 

which stands out to you for maybe the biggest fiscal concern? 

Let me just add to that. This is kind of a P.S. Are there highrisk areas that cannot be addressed by the Executive Branch and 

should be maybe of higher priority for my colleagues and me here 

in the Congress? 

Mr. GAFFIGAN. Well, you mentioned the National Flood Insurance Program. That is one in terms of fiscal risk, and I think it is 

hard to pick one that is more significant than others. And I just 

touched upon four areas. There are a lot of other potential impacts 

to the Federal Government. 

We think the disaster assistance program, stands out, Congress 

authorized $60 billion for one storm, Superstorm Sandy. 

Right now, as an owner of infrastructure, the agencies are trying 

to assess what is at risk. The Department of Defense has some serious concerns. They have at least 30 major facilities that are in 

coastal areas that are vulnerable to flooding. They have to be concerned about dry docks, making sure those are not exposed. So I 

think that it is hard to pick a ‘‘most important’’ out of all those. 

Chairman CARPER. All right. A question for either Mr. Heyman 

or Ms. Durkovich or both, but in Mr. Gaffigan’s testimony, he mentioned, as I recall, that infrastructure decisionmakers have not necessarily incorporated potential climate change impacts in planning 

for roads, in planning for bridges, in planning for waste management systems because they face challenges identifying and obtaining available climate change information best suited for their locations and for their projects. 
16 

Could one or both of you take a minute or two and just talk a 

little bit about how your agency is addressing this concern? In particular, I would like to hear how your agency is coordinating with 

other agencies to make sure that local planners have the best data 

possible, especially related to Superstorm Sandy rebuilding efforts? 

Ms. DURKOVICH. Thank you very much for that question. In our 

unique role within the Office of Infrastructure Protection, we both 

have the ability to convene and coordinate with owners and operators, but with other members of the Federal interagency. Let me 

speak to that latter point first and two topics related to that. 

First, I was in front of you a few months ago talking about Federal facility security, and I happen to chair a group called the 

Interagency Security Committee that works with 53 different departments and agencies to set standards related to Federal building safety and security. Climate change is an issue that this Interagency Security Committee is addressing and is working to incorporate it into its design basis threat scenarios, which are over three 

dozen scenarios that Federal buildings think about when incorporating protective and mitigation measures to, again, ensure the 

safety and security of those facilities. 

So this is a group of physical security officers who are looking at 

how we address climate change when it comes to the over 300,000 

Federal facilities that are in the area. We are dependent, though, 

as a Federal interagency on other lifeline sectors, and in the Office 

of Infrastructure Protection, we have the ability to convene our 16 

sectors and partners both on the government side but also on the 

private sector side to talk about what they are doing to raise 

awareness, to look at best practices, to identify best practices, to 

help share those best practices to understand where the gaps are 

and to look at the comparative advantage that the Federal Government has and to think through what are some of the capabilities 

that we can bring to bear to help this effort. 

And then just to speak briefly to the work that we are doing 

within the Infrastructure Resilience Working Group, this is, again, 

a unique opportunity to look across the Federal interagency and to 

look at the programs that are available to State and local communities to the owner/operator community, and to, again, understand 

what is working, where the gaps are, where we need to remove 

those barriers so that we can enable planning, that we can bring 

consistent comprehensive data to our partners so they can begin to 

incorporate it into their planning. 

So a lot going on this front that I think we can continue to harness. 

Chairman CARPER. All right. Before I yield to Senator Johnson, 

Mr. Heyman, do you want to add anything to that? Thank you for 

those comments. 

Mr. HEYMAN. Sure. Thank you. As part of the National Preparedness Plan, we work very closely with States and communities to 

help them assess the threats and hazards and risks that they face. 

This is called the Threat and Hazard Identification and Risk Assessment (THIRA). Every State is required to do this. FEMA has 

a policy of making the best available data available, so that is to 

say, whatever is sort of the top-line scientific data that is available, 

FEMA tries to facilitate to the best of their ability. 
17 

Two years ago, there were only 15 States that had Climate Action Plans. Today there are 36 that have Climate Action Plans. 

They are incorporating the best data and the risk assessments to 

develop an action plan to better prepare their communities. 

Chairman CARPER. Thanks very much. Senator Johnson. 

Senator JOHNSON. Thank you, Mr. Chairman. 

I am a big fan of a fellow named Bjorn Lomborg, who basically 

issues his report—I think it is called the ‘‘Copenhagen Project,’’ and 

I believe he is an adherent of climate change, but he is also pretty 

good at prioritizing with limited resources where we should be 

spending our dollars. So I think my first set of questions really 

goes toward that prioritization. How do we do that? And are we 

doing it effectively? And can we be, for example, killing two birds 

with one stone? 

I will start with you, Ms. Durkovich. You talked about 

cybersecurity, which brings to mind power grids, which brings to 

mind the attack at the Metcalf transmission station in, I believe, 

San Jose, California. There are a number of things that could affect 

our infrastructure: obviously natural disasters, weather disasters, 

as well as manmade terrorist attacks. Are we trying to combine 

these and take a look at that from the standpoint of prioritization 

of trying to mitigate problems? 

Ms. DURKOVICH. Our role within the Office of Infrastructure Protection is to help owners and operators understand the range of 

threats and hazards they face, and as they look across their enterprise to manage risk, to provide them with information, with tools, 

with best practices so they can be both efficient and effective in application of how they go about managing these risks. 

Part of the reason that we have moved to a more all-hazards 

focus within the Department of Homeland Security and across the 

Homeland Security enterprise is that we find as you work to adapt 

preventive measures and mitigative measures to a range of threats 

and hazards, they are applicable not only to just one particular 

hazard but to many hazards. And so we work very closely with the 

owner and operator community to think through this. But let me 

touch briefly, for example, on the substation issue. 

So as we think about security but also incorporate climate 

change and extreme weather into that conversation, as owners and 

operators are looking to invest in upgrades and to modernize that 

infrastructure, as they make improvements related to security, we 

can also have conversations with them about whether these assets 

and these facilities are in flood-prone areas, are in areas that are 

susceptible to sea rise. So as they start to make the multi-milliondollar investments that you are seeing, again, to enhance their security and resilience, we are thinking about these things in parallel, in an integrated fashion, and ensuring that the money that 

is invested in these enhancements and these mitigation measures 

is used effectively. 

But again, our role is really to help them understand the range 

of threats and risks and consider measures and options that allow 

an efficient and effective application of resources. 

Senator JOHNSON. Mr. Heyman, in terms of prioritization, are 

there lists being prepared? We talk about it. We talk about 
18 

prioritization. But is there any product that is actually ever produced? 

Mr. HEYMAN. There is. The National Preparedness System has 

about five parts to it. One is to identify the risks. Two is to get a 

sense of where the gaps are, looking at communities based upon 

what capabilities are required for preparedness, then to do the resource assessment and ultimately resourcing followed by training 

and exercises, and you do that cycle again. 

At the end of that exercise, there is a list of capabilities that are 

prioritized for communities, for States. Those States then apply for 

grants to FEMA based upon that gap analysis, and that becomes 

the basis for the next year’s preparedness planning and evaluation, 

and so that is a regular cycle that is done. The National Preparedness Report is an annual report, and its last release was last year. 

Let me just talk a little bit about prioritization as a concept because I think that everyone has said that mitigation is critically 

important, and I think that is right. There was a study done a few 

years ago by the Multihazard Mitigation Council which said a dollar’s worth of investment up front in mitigation led you on the back 

end to $4 back in terms of return on your investment. And, similarly, the Louisiana State University Hurricane Center evaluated 

what kind of benefit mitigation would have done in Hurricane 

Katrina, and they came back with a figure of $8 billion would have 

been saved. 

So how do we do that? One way of doing that, because the Federal Government does not own and operate most of the infrastructure and it does not own the residential housing or the buildings 

that are out there, is to try to incentivize and encourage raising 

standards as it pertains to the built environment. And the program 

I mentioned, Resilience STAR, which we are piloting in the residential environment this year, provides a basis for trying to look 

at how we can do that on a broader scale across infrastructure so 

that people are motivated and incentivized either through self-preservation, because their house will be the one standing, or through 

other incentives, whether it is mortgage reductions or perhaps premium reductions on insurance. And so we are looking at that, and 

I think that is something that this Nation should take a serious 

look at. 

Senator JOHNSON. Well, let us talk—because you are using the 

word I wanted to get to next is ‘‘incentivize.’’ Where are those incentives best—where do they best come from? Private insurance 

market where you have basically millions of different decisions 

being made or from some centralized entity like the Federal Government trying to do it with a one-size-fits-all approach? 

Mr. HEYMAN. So there are a number of different actors in this 

world. When you go to buy a house, there are the builders. Are 

they going to build it to code-plus standards? How do you get them 

engaged in that? As we are going ahead with the pilot, what we 

are seeing is that a lot of builders are interested in this because 

they see a market advantage. And so there is a benefit to being labeled, for example, Resilience STAR. 

The insurance industry is interested in this because it saves 

them a whole lot of money on the back end with possible claims 
19 

for damage, if you are looking at the life cycle of a house, every 40 

years. And residential owners may see a benefit because—— 

Senator JOHNSON. Let me just stop, though. Wouldn’t the insurance industry itself have a vested interest to develop these standards? And if they developed them themselves in the private sector, 

wouldn’t it be more effective than a government-run solution? 

Mr. HEYMAN. So insurers have looked at this. In fact, we are 

partnering with the insurance industry to try to develop this pilot 

project. And I think for various reasons, possibly because there are 

so many different fractured—you have a fractured insurance market, you have a number of different State players and all. I think 

one of the benefits that the Federal Government can bring is a national perspective, which is not something any individual insurance 

company can do. 

Senator JOHNSON. Can I ask just one more question? 

Chairman CARPER. Yes. 

Senator JOHNSON. Because I have a great deal of concern. If the 

Federal Government is the 800-pound gorilla and everybody in the 

private sector is looking—or at the State level or local level is looking for the Federal Government to bail them out, is that a real disincentive to do the resiliency, do the mitigation efforts? If we have 

a big flood, if we have a big hurricane, the Fed is going to come 

in there and cover our losses and then some? To what extent are 

we witnessing that really throughout the country? 

Mr. HEYMAN. Well, you are not, unfortunately, witnessing that. 

In many places, you have communities that are devastated, that 

people have packed up their bags and left, and you are losing your 

tax base. You are losing your ability to attract individuals to come 

to your community. And the Federal Government cannot help in 

that regard when people move with their feet. 

So this is one of those issues that I think local governments or 

urban communities will probably take a good look at, because if 

you are a resilient community sitting next to a zone which has a 

risk, people may want to be there because in the long run you are 

safer, more secure, and, frankly, the funds that you would have to 

pay in building your community can be paid to other priorities like 

public safety and education. 

Senator JOHNSON. Of course, that is the point, isn’t it, that we 

need to raise the price for individuals that are building in very 

risky environments, correct? We do not want to continue to 

incentivize people to be building in areas that we know are going 

to flood every year or get wiped out every 10 years. 

Mr. HEYMAN. And that is why it is important to have the best 

available data so that people actually are cognizant of where they 

are building or living or moving to. FEMA has tried to get that as 

a basis for getting data out, and then, frankly, when we work with 

communities to do their Threat and Hazard Identification Risk Assessment, that is all—with your eyes wide open, looking at what 

the highest risks are, and then asking if there is a way that we 

can partner together to reduce those risks. 

Senator JOHNSON. OK. Thank you. Thank you, Mr. Chairman. 

Chairman CARPER. I wish we had time for another round of questioning. We have just learned that a series of votes starts at 11:30, 
20 

and I want to make sure we have good ample time to hear from 

our second panel. 

I just want to followup, though, on what Senator Johnson is saying. We have had some demonstrations already on STAR programs, 

Energy STAR and some others that we are aware of, and just to 

make sure that we use those as laboratories of democracy, that we 

can figure out why they work and may be just as important as 

some that were attempted that did not work out. And I am one, 

like Senator Johnson, I am always interested in how do we align 

incentives in order to get the kind of behavior that we are interested in encouraging. 

The other thing I like to do here, sometimes I quote David 

Osborne, who wrote a book back in, oh, I think the early 1990s 

called ‘‘Reinventing Government,’’ and he talked about the role of 

government and the role of the private sector. And he used boats 

as the analogy. He said that the role of government is to steer the 

boat, the role of everybody else is to row the boat, so to actually 

do the work and to make it work. And so there is a good role for 

both, I think an important role for both, and hopefully we can find 

the good balance. 

I just want to say to each of you, thanks for the work you do. 

Thanks to the folks who work with you, and to say especially with 

respect to flood insurance, we will look forward to maybe working 

very closely with GAO and with DHS and others to try to find a 

principled compromise that makes a lot of sense. My father would 

say, if you looked at it from above, he would look at our final work 

on flood insurance and say, ‘‘Well, they used some common sense.’’ 

So hopefully we will do that. 

So, with that, you are excused, and we thank you for joining us, 

and there will be some followup questions. We just hope you will 

respond to those in a prompt way. Thank you so much. 

[Pause.] 

Collin O’Mara, all the way from—I want to say San Jose, California. Did you used to live in San Jose? 

Mr. O’MARA. We did. 

Chairman CARPER. We stole him. Governor Jack Markell stole 

him from San Jose at the tender age, I think, of 29 or 30 to come 

all the way to Delaware to be our Secretary of Natural Resources 

and Environmental Control. 

Ron, if I had half the energy of this guy, I would be President 

and Vice President. He is an amazing guy. I love working with 

him, very proud of the work that he does, and thank you for joining 

us today. 

Our second witness is from a bigger State than ours—New 

Hampshire. Kelly Ayotte cannot be with us this morning. She 

sends her best. And Dr. Kirshen, research professor at the University of New Hampshire—what is your mascot there? 

Mr. KIRSHEN. It is the Wildcats. 

Chairman CARPER. The Wildcats, yes. We have had some rough 

football Saturdays against the Wildcats, and the Blue Hens, but we 

are always happy to welcome you here. I understand your research 

focuses on water resources engineering and management as well as 

climate change vulnerability assessment and adaptation planning. 
21 

1The prepared statement of Mr. O’Mara appears in the Appendix on page 64. 

So that is a mouthful, but we are happy that you could join us. 

Thanks so much for coming. 

And Ms. Lindene Patton—my mother was a Patton—chief climate product officer for Zurich International Group. In this role, 

Ms. Patton, I am told, is responsible for policy and risk management related to climate change. A member of my staff said that you 

might actually have a member of your family here or two. Is that 

true? 

Ms. PATTON. I do. 

Chairman CARPER. Would you turn your mic on and just introduce whoever is here from your family? Maybe they will stand up 

or something. 

Ms. PATTON. My daughters Amelia and Zoe. 

Chairman CARPER. Amelia, would you raise your hand? Hi, 

Amelia. Zoe, would you raise your hand? All right. And who is in 

the middle? 

Ms. PATTON. A friend of hers, Sharon. 

Chairman CARPER. Hi, Sharon. Nice of you to come. 

Ms. PATTON. And our au pair, Gosia. 

Chairman CARPER. All right. Ladies, thanks for bringing your 

mom. 

OK. You heard me say to the first group take about 5 minutes 

or so, if you will, and then we will ask some questions. But we are 

delighted that you have come. Thank you so much. This is an important hearing, and I am happy to be here along with Senator 

Johnson to welcome you. 

Collin, would you please proceed? Secretary O’Mara. 

TESTIMONY OF COLLIN P. O’MARA,1 SECRETARY, DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL 

CONTROL, STATE OF DELAWARE 

Mr. O’MARA. Senator Carper, Senator Johnson, our thoughts also 

go out to Senator Coburn. Thank you so much for holding this 

hearing today. I think your timing is good, and it is a critically important topic to Delaware as the lowest-lying State and one of the 

most vulnerable to these kind of storms. 

Senator Carper and I spent a lot of time in helicopters and on 

the ground looking at the damage after the fact. That is in Delaware. We have actually probably done a better job preparing than 

almost any other State because of the way we are looking at it. 

What I would like to do in my testimony is talk a little bit about 

Delaware’s approach but then also offer some, I think, very commonsense solutions that should be part of the conversation going 

forward about shifting the focus to preparedness and resilience and 

a little less on the money on the back end. 

In Delaware, our approach has been fairly simple. Start with the 

science and the economics and make sure you have good science 

and economics to know your vulnerabilities and the tradeoffs. it is 

easy in a political environment to move toward the thing that gets 

the most attention, but it is not always necessarily the thing that 

has the best economic imperative. And so we have done extensive 

analyses of our flood plains, and we have looked at sea level rise. 
22 

I have a particular here that I will introduce into the record with 

the Chairman’s consent. 

We have looked at 75 different types of infrastructure in the 

State and the vulnerabilities of each. Then we took that data to actually begin making infrastructure investments. We have looked at 

other climate impacts from temperature to more precipitation to 

more extreme storms, and really having that data drive our decisionmaking in a way that takes the politics out of it and really has 

the types of lists that Senator Johnson was asking about, having 

that strict priority list to make sure the limited dollars are going 

into places that make sense. 

We have done an extensive analysis with Tony Pratt, who is behind me, who is our Administrator of Shoreline and Coastal Protection, looking at all of our bay beaches, and these are areas that do 

not really qualify for Federal assistance, and looking at the economics and who gets the benefit. And it turns out that most of the 

benefit is just the private owners, not to the broader population, 

which suggests that the private owner should pay rather than the 

broader community. 

We have also looked at the economic contribution of the coast 

and try to figure out the economic benefits of having protections. 

So having that kind of analytic rigor behind our decisionmaking is 

critically important because it then allows us to invest strategically. And we have a strong preference on natural systems. Senator 

Carper and I have seen places that have healthy dunes, healthy 

wetlands, places that build above code standards, are the ones that 

turn out very well after these storms. We see it time and time 

again. The communities that are not as prepared do not do nearly 

as well. 

We are also taking a lot of steps to try to build resiliency into 

everything we do going forward, so modernizing storm water—we 

do not want to make the problem any worse. We want to stop the 

bleeding, and make sure that new developments are more resilient 

so now that we have this kind of data, that we are not exacerbating 

the problem and exacerbating the cost. 

So because of all this, the Governor was actually invited to be on 

the President’s Climate Task Force and really with a focus on this 

natural infrastructure and the natural resource projects that we 

have been doing across our State, whether it is in Wilmington or 

down in our inland bays and everywhere in between, we really are 

piloting projects that we believe can be a national model. So, with 

that, here are some commonsense recommendations for the Committee’s consideration. 

One, resiliency needs to be built into every single Federal investment. We do not need a new bureaucracy around this. We are 

spending billions of dollars every year on transportation, on wastewater, on community development block grant projects. If we build 

resiliency standards into those projects, we can make sure that 

money is spent a lot better. There is nothing more painful than 

seeing a project that has 80 percent Federal money and 20 percent 

local money wash away in a storm when it is only 10 years old, 

when we know if it was built better that would have survived. It 

is just throwing good money after bad. 
23 

The second is that we need to invest more in protection. We are spending $5 billion in the Army Corps protection line through the 

Sandy supplemental. That is almost 50 years’ worth of investment 

compared to what they normally get for their protection line. It is 

about $100, $150 million. We are spending $5 billion in one year. 

If we spent $300 or $400 million a year on coastal protection, we 

could save ourselves tenfold that money in the years ahead. It just 

has become easier to pay for it after the fact as opposed to investing annually, and we continue to cut these lines. 

Third, we really need to break this disaster-rebuild-disaster cycle 

that we have. It is still easier to rebuild to the old infrastructure 

standard that was there before the storm. You can get your money 

quicker through FEMA if we do that, as opposed to building something at a more resilient standard. We have seen it in Delaware 

with the dike repairs we are making in the northern part of the 

State, and there has been a lot of conversation about this, great 

recommendations coming out of Georgetown and some other places. 

But we need to make sure we are building to a higher standard 

when we are rebuilding, and I think there has been some good 

progress, but we need to figure out how to institutionalize and 

make sure money can move quickly as we are rebuilding to higher 

standards. 

We also need to prioritize comprehensive projects. Right now, as 

we have talked about the Water Resources Development Act 

(WRDA) context, you can have two projects by the Army Corps: a 

navigation project that is taking a bunch of sediment out of a waterway, but it is cheaper to put that in a landfill than it is to put 

it on the beach next to it or the wetland next to it that actually 

could provide a protection project. The Army Corps right now will 

choose the lowest-cost option, and so they will not actually put it 

on the beach. They will move it somewhere else. We need to combine this. This is absolutely ludicrous. We could be saving tens of 

millions of dollars a year easily by putting those projects together 

and looking at the overall cost. 

We need to make sure that sound science is continuing to drive 

the decisionmaking, particularly with our flood plain mapping. We 

are doing a better job. There is a lot of progress there. 

We need to update the NFIP regulations. They really have not 

been updated since 1989. We have been focused on the money side. 

But the cost of the insurance becomes a lot cheaper if the standards are higher. And so it is a way to actually mitigate the challenge that all of you are facing with constituents complaining about 

the high cost. 

We need to prioritize natural infrastructure. We see the wetlands, the dunes, the living shoreline projects. They work. They 

work exceptionally well. They should not be the exception or the 

pilot projects anymore. They need to become the default. 

We need to stop rewarding communities that fail to prepare. 

Right now, a State like Delaware that has spent a lot of State 

money and a lot of local money does not receive as much after a 

disaster because our systems work, where a community adjacent to 

us might have spent very little money, they get everything paid for, 

they get all the new shiny infrastructure. It is completely crazy, 

and we need to make sure that there are incentives and priority 
24 

1The prepared statement of Mr. Kirshen appears in the Appendix on page 71. 

given to folks that have made their own investments and are really 

doing the hard work to hold themselves accountable and not relying on the Federal Government, as Senator Johnson said, where 

they are expecting the windfall after the fact without doing the 

work themselves. 

The very two last points. We need to ensure that public expenditures produce a public benefit, making sure that we are not just 

subsidizing private activity but really prioritizing things that do 

have a broader benefit to all taxpayers. 

And then we need to have a much greater focus on hazardous 

sites. We talk a lot about coastal communities and residences and 

businesses along the coast. We have old Army landfills. We have 

national priority list sites, Superfund sites. When those sites wash 

out, the potential for catastrophic damage from these storms is 

massive. So we have been focusing on these in Delaware, but they 

are not receiving nearly enough attention, and there are issues 

right now; if you want FEMA to help you acquire a parcel, if the 

parcel actually is contaminated, FEMA will not touch it for Federal 

liability reasons. And so you end up buying another parcel that, 

will be less important. These are very commonsense things that we 

could change. 

We are so grateful, Senator Carper, for you looking at these 

issues, because I think our experience in Delaware shows that if 

you do prepare, that ounce of prevention can be worth a pound of 

cure. So thank you, sir. 

Chairman CARPER. All right. Thank you so much. Boy, he got a 

lot in in 6 minutes and 50 seconds. Didn’t he? 

Mr. O’MARA. I apologize for going over. I always talk quick. 

Chairman CARPER. That is all right. I was watching the body 

language of the co-panelists here, and Dr. Kirshen nodded his head 

up and down a whole lot. I think he may have agreed with one or 

two things that you said, but we will find out now. 

Dr. Kirshen, thanks so much. 

TESTIMONY OF PAUL H. KIRSHEN, PH.D.,1 RESEARCH PROFESSOR, ENVIRONMENTAL RESEARCH GROUP, DEPARTMENT OF CIVIL ENGINEERING, AND INSTITUTE FOR THE 

STUDY OF EARTH, OCEANS, AND SPACE, UNIVERSITY OF 

NEW HAMPSHIRE 

Mr. KIRSHEN. Thank you very much. Thank you, Mr. Chairman, 

Senator Johnson, for giving me the opportunity to talk in front of 

this Committee. 

I do agree very enthusiastically with everything Secretary 

O’Mara is proposing, and I hope to take some of his ideas back 

with me to New Hampshire. 

With the support of my colleagues at the University of New 

Hampshire and other institutions, I have conducted several studies 

on the long-term economic consequences of New England cities 

being impacted by, first of all, extreme amounts of precipitation 

and, second of all, coastal flooding from large coastal storm surges. 

Here I am going to talk about the long-term costs of not being prepared for these present and future events and compare them to the 
25 

benefits of being prepared. Because of the changing climate, climate change impacts have always been part of my analyses. 

I also want to point out that while the case studies are particular 

to New England, the findings are relevant to many parts of the 

United States—in fact, the world. 

One of the first studies I am going to talk about was the impacts 

of coastal surge flooding on the eastern coast of Massachusetts, the 

region stretching from north of Boston to almost Cape Cod. This is 

an area of large cities like Boston but also suburbs. And there we 

looked at the total damages from surge flooding from storms to residential, commercial, and industrial buildings over the next 100 

years assuming several moderate, plausible sea level rise scenarios, 

and we looked at the damages and compared them with where the 

damages were reduced if adaptation had taken place, and we measured the benefits of adaptation by damages avoided and measured 

the cost by the cost of adaptation, and we found benefit/cost ratios 

ranging from 6 to 30 for urban areas and 9 to 13 for suburban 

areas. So what that means, for example, a benefit/cost ratio of 6:1 

means that every dollar invested in adaptation reduces long-term 

damages by 6 times. So these are, again, showing the true benefits 

of preparing for these present and future events. 

Our second case study was the Hampton-Seabrook-Hampton 

Falls area of New Hampshire. It is a coastal area of New Hampshire with many second homes, particularly on the barrier beaches 

of Hampton and Seabrook. And here we looked at the benefits and 

costs of protecting privately owned buildings—in other words, 

homes and commercial facilities—and also key public assets, such 

as sewage treatment plants, schools, fire and police stations, from 

present and future coastal storms by, again, developing adaptation 

plans to protect to 2050 under low and high sea level rise scenarios 

of approximately 1 feet to 2 feet. And, again, we found very large 

benefit/cost ratios ranging from 11 to 16 for private assets and 7 

to 8 for public assets. 

The last case study is managing storm water in the Winter Hill 

section of Somerville, Massachusetts. This town is located north of 

Boston and Cambridge on the tidal Mystic River and is one of the 

most densely populated municipalities in New England. This area 

is served by a combined sewer system which carries both storm 

water and sanitary waste. Presently, the storm system—the sewer 

system only has the capacity to handle all the wastewater and a 

small amount of the storm water. But when a larger storm occurs, 

like only 1 inch of rainfall, some of the extra combined sewage is 

treated at the regional wastewater treatment plant, but most of the 

combined waste is discharged partially treated into the Mystic 

River, and there is flooding in the streets with raw untreated sewage. And this performance of the system is going to be further 

stressed by increases of extreme rainfall of 10 to 30 percent by 

2070 and higher sea levels in the Mystic River. 

So, again, we did a benefit/cost analysis comparing the cost of adaptation and preparing the sewer system to handle more waste 

with the benefits to be avoided by adaptation, and we found benefit/cost ratios of about 4:1, again, showing the advantages of dealing with these problems now rather than later. 
26 

1The prepared statement of Ms. Patton appears in the Appendix on page 79. 

So to summarize, I have talked about some of my recent research 

on the benefits of urban adaptation to climate change compared to 

the costs of damages. Actually, the costs I talk about may actually 

be underestimated because I do not include in my costs such items 

as human deaths and injury, damages to ecosystems, indirect costs 

such as lost employment and business activities, and community 

displacement and disruption. But even with these costs not included, we found that over many scenarios of climate change and 

sea level rise, adaptation paid off in terms of damages avoided. And 

undertaking no adaptation, no action, in all cases was the worst 

thing to do. And, also, with these benefit/cost ratios so high, all 

greater than 4, this to me would indicate that these actions are 

useful even if we did not have climate change. These are so-called 

no-regret actions. 

So I just want to say a couple more comments. First of all, one 

of the first steps we can take to better control these threats from 

climate change is to control emission of greenhouse gases. That will 

make a big difference whether we have 3 feet of sea level rise by 

the end of the century or 6 feet, also whether we have a 10-percent 

increase in extreme rainfall or 30 percent. But because we cannot 

reverse climate change, we cannot change climate change, climate 

change is going to continue for centuries, we have to adapt, be prepared. And like everyone else here, I really support we undertake 

planning now to start dealing with these threats; otherwise, we are 

going to be suffering large human, social, and environmental consequences. 

Thank you for your time. 

Chairman CARPER. Thank you for coming all the way from New 

Hampshire to be with us today. Tell those Wildcats we said hello, 

and thanks for sending you down to spend some time with us. 

Ms. Patton, your whole statement will be made part of the 

record. Please proceed. 

TESTIMONY OF LINDENE E. PATTON,1 CHIEF CLIMATE 

PRODUCT OFFICER, ZURICH INSURANCE GROUP, LTD. 

Ms. PATTON. Thank you very much. Chairman Carper, Ranking 

Member Johnson, thank you very much. My name is Lindene Patton. I serve as the chief climate product officer for Zurich. 

Zurich is a global insurer providing insurance and risk management solutions to customers in 170 countries. We have been serving customers in the United States since 1912 and today stands as 

the third largest commercial property casualty insurer in the country, with over 8,000 employees nationwide. 

I would like to thank you for holding this timely hearing, and I 

am pleased to share with the Committee an insurance industry 

perspective on the current State of our Nation’s resilience to extreme weather events and the economic importance of investing 

today in improving resilience. 

Zurich observes that the United States is increasingly reliant on 

disaster recovery funds to respond to extreme weather events and 

is underinvested in resilience—both physically and economically. 
27 

Data show that the number of loss-relevant weather catastrophes 

has increased from an average of 400 per annum in 1980 to over 

1,000 per annum in North America today. The Federal disaster relief expenditures alone over the last 3 years have risen to $400 per 

household. That is more than a fourfold increase over the past 30 

years. In other words, the resilience gap is large and growing. 

How large? In 2010, Professor Cummins projected that over the 

next 75 years costs for the Federal Government share of unfunded 

response costs for weather-related disasters would grow to more 

than US $1 trillion and might be as much as US $5.7 trillion. 

Unfunded exposures of the State catastrophe funds are in addition to this number and have been projected to be at $3 trillion. 

Taxpayers are bearing the burden of this increasingly 

unbudgeted risk and associated loss costs. Without decisive risk reduction action by government as well as insurers, economically 

unsustainable accretive unbudgeted disaster management costs can 

be expected to continue on an upward trajectory. 

Insurance has a unique capacity to facilitate resilience, providing 

risk assessment, risk management, and risk-based price signals, all 

of which help inform stakeholders about risk magnitude and risk 

reduction priorities. A study by the Bank of International Settlements found uninsured and underinsured economies are more likely to suffer long-term macroeconomic damage. Some may believe 

that ex post disaster recovery funding takes the place of insurance, 

but it does not. 

One of the many critical differences is that disaster recovery 

funds typically are delivered more slowly than insurance payments, 

resulting in slower recovery and even longer-term negative economic impacts. But assuring resilience to extreme weather events 

requires risk management before, during, and after a loss event. If 

our response to extreme weather events is only after they occur, society has squandered its best opportunity to control risks and costs 

related to these events. 

So should resilience be prioritized over other disaster response 

costs? Absolutely. Why? Investment in resilience saves taxpayers 

billions of dollars, provides greater protection to the public in the 

face of increasing extreme weather events, reduces human suffering, and creates domestic jobs and promotes domestic manufacturing in building more resilient housing and infrastructure. 

Zurich understands the importance of pre-event investments in 

resilience and acts accordingly. We are very proud of our efforts. 

Here are but a few examples. 

Zurich has supported the following institutions and work focused 

on resilience improvement including: the World Economic Forum, 

the Business Continuity Institute, the Institute for Building and 

Home Safety. 

Over the years, we have worked with progressive customers like 

Marriott and Verizon to demonstrate by design and implementation cost-beneficial extreme weather event risk mitigation solutions. Zurich has committed to purchase $1 billion U.S.D. of green 

bonds focused specifically on resilience, making Zurich a global 

leader in the purchase of such resilience-supporting instruments at 

a scale that really matters. 
28 

What action might the government take in the short term, medium term, and long term to close this resilience gap? Develop a 

national priority plan for resilience investment. Promote increased 

government and private investment in infrastructure resilience, 

educate society on the true costs of extreme weather, and promote 

and enforce stronger building codes. 

Two specific actions Congress could take to improve resilience 

might include: 

Use the language of the Extreme Weather of the Water Resources Development Act as a template to improve resilience requirements framing the billions the Federal Government invests 

annually in water, port, highway, transit, and aviation infrastructure. 

They also might expand the Resilience STAR pilot currently proceeding at DHS to include commercial applications and, most importantly, entire community resilience ratings. 

How much should be budgeted? It might be logical to take a portion of the predicted emergency disaster appropriations and use it 

to improve resilience in assets. From a practical perspective, funding resilience is a fundamentally wiser investment than spending 

on disaster relief and recovery. The Multihazard Mitigation Council 

found that funding resilience provides a 4:1 return on investment. 

Our co-panelists noted other studies which have indicated similar 

or improved returns on investment. 

As the incidence and costs to the Federal Government of extreme 

weather events increase, so does the budget imperative to make 

greater investments in resilience. 

In conclusion, Zurich believes that we have an opportunity to 

dramatically improve the resilience of our Nation’s homes, businesses, and critical infrastructure and that this can be achieved in 

a manner that will ultimately save Federal, State, and local governments billions of dollars annually while providing citizens greater protection from extreme weather events. Zurich is extremely encouraged by this Committee’s efforts to improve our Nation’s resilience and looks forward to working with the Committee in any way 

that we can help. 

Chairman CARPER. Great testimony. Thank you very much for 

that. 

I am going to slip out of the room and take a phone call, and 

Senator Johnson is going to lead off with the questions for this 

panel. I will be right back. Thanks. 

Senator JOHNSON. [Presiding.] Thank you, Mr. Chairman. 

Ms. Patton, I would like to start with you. You mentioned a 

growing resilience gap. How much of that gap, especially the 

growth of it, would you attribute to the fact that we have just continued to build in very risky areas in this country? 

Ms. PATTON. I am not in a position here to identify the percentage or a precise number, but it is substantial. We simply have 

more assets in harm’s way. We have a history and there is a lot 

of data and research which indicates that we have a migration to 

coasts. We have a migration to locations which have limited water 

supplies. We have migration to the wilderness-urban interface 

(WUI). 
29 

Under all of those circumstances, you put more assets in harm’s 

way, so the suggestion is that at least that is a portion of the driver, but we also have other suggestions that the climate is changing. 

There is no question. 

Senator JOHNSON. Now, when society subsidizes private individuals taking those types of risks, that increases that type of behavior, correct? 

Ms. PATTON. And there is research, which I have cited in my 

written testimony, which does demonstrate that. In fact, if there is 

an interference with risk-based price signals and a subsidy which 

basically provides information to an individual that moving to this 

location is not that cheap and if there is a disaster it will be subsidized, then yes. 

Senator JOHNSON. Well, we have that interference, correct? 

Ms. PATTON. We do. 

Senator JOHNSON. What would cause that interference, from your 

standpoint? 

Ms. PATTON. Well, there are a multitude of things. Some of it is 

actual funding and some of it is perceptive. So in the case of actual 

funding, there are programs which come in and provide subsidies 

for government-run insurance programs. There are also circumstances where there are perceptions—and there was a study 

done by a Federal task force after Hurricane Sandy which was trying to look into what people understood about their insurance, and 

what that study revealed was that people really did not understand 

what was insured and what was underinsured. And their assumption was that Federal disaster funds would be delivered kind of like 

insurance. 

Senator JOHNSON. They were correct, weren’t they? 

Ms. PATTON. Well, the reality is, in fact, the priorities for Federal 

disaster funding is to really look at getting critical infrastructure 

up and started, but not necessarily always focused on an individual 

asset, which is the purview of private insurance. And they are a 

not a 100-percent substitute, and I have cited research in my written testimony that affirms that, that demonstrates that, in fact, 

disaster recovery funds do not have the same economic value that 

you have from private insurance and that you can have longer-term 

negative macroeconomic impacts if you are underinsured versus 

having adequate insurance. 

Senator JOHNSON. As necessary as Federal help is in those circumstances, it creates moral hazard, does it not? 

Ms. PATTON. It is very clear that under circumstances the Federal Government must respond under disaster. It is a political imperative. 

Senator JOHNSON. Right. 

Ms. PATTON. It is a social imperative. But how you manage and 

structure that is very important, and as some of the other co-panelists have suggested, there are ways to prioritize that spending, and 

there are ways to structure programs in terms of providing information and risk-based price signals that are consistent. There have 

been recommendations that have been made by the Wharton 

School as to how some of those risk-based price signals might be 

adjusted in a way for certain Federal insurance programs. There 
30 

are other suggestions that exist in terms of prioritizing infrastructure investment so that resilience is baked into the design. 

Senator JOHNSON. Do you think people would build $1 million, $2 million homes right on the beach if they had to pay the full cost 

of the risk on their insurance? 

Ms. PATTON. I do not think I am in a position to know that. 

[Laughter.] 

Senator JOHNSON. You come from the insurance business. Is it 

a fantasy to think that we could over time privatize the Flood Insurance Program? 

Ms. PATTON. I think that that will be a question that I will have 

to return to you on in terms of responding in full. I would tell you 

that I think it is very important for us to send consistent riskbased price signals in this context and let the market work. 

Senator JOHNSON. And that is not happening right now with the 

National Flood Insurance Program, correct? 

Ms. PATTON. There are changes to that flood insurance program—— 

Senator JOHNSON. Which we suspended. 

Ms. PATTON. Which are designed to allow that. 

Senator JOHNSON. OK. And, again, that is not a good thing in 

terms of reduction of that moral hazard of—— 

Ms. PATTON. The position of Zurich is—— 

Senator JOHNSON. And you are really creating the incentive for 

risk management and risk mitigation and resiliency creation, correct? 

Ms. PATTON. Absolutely. I could not agree with you more. It is 

very important that the risk-based price signal and the insurance 

functionality be permitted to make sure that risks can be assessed, 

the asset owners can be fully informed about what, not only the actual functional risk is, but what the cost of that risk is so that they 

can make cogent decisions about how they invest. Not only where 

they invest, but when they put structures together, how much they 

invest. 

Senator JOHNSON. OK. Now, we are talking about private individuals, private property. But at the same time, government has 

property which they also purchase insurance for, correct? 

Ms. PATTON. Well, there is something called the ‘‘self-insurance 

rule’’ under government, and there are—it depends on whether you 

are talking about local, State, or Federal Government. And in general, the Federal Government is primarily a self-insurer, and when 

it—— 

Senator JOHNSON. Does that reduce their incentive to mitigate 

risk—— 

Ms. PATTON. It is their money. 

Senator JOHNSON [continuing]. In your opinion? I mean, if they 

were forced to buy insurance, not self-insure, would they potentially—because within their budgets, if they are building and not 

mitigating risk, would that help mitigate risk? 

Ms. PATTON. The only thing I can point you to is that there is 

a longstanding Comptroller General’s opinion, which dates back to 

the 1700s, which indicates that the Federal Government is supposed to be a self-insurer by rule, and there are policy reasons for 

that. But the functionality of private insurance, you are absolutely 
31 

correct, is to send a risk-based price signal to encourage people to 

mitigate risks so that they can control those costs over time. 

Senator JOHNSON. Well, as you said in your testimony, the insurance industry has a unique capacity to provide that discipline. 

Do either of you two gentlemen want to comment on that line of 

questioning? 

Mr. O’MARA. I think I would just add that the problem that we 

are seeing kind of continuously is that folks see themselves as libertarians until they need help because they have not taken care of 

the private markets. And so, we are trying to figure out ways in 

Delaware, particularly in one of our counties where they do not 

have some of the more protective policies in place, to not have 

State government in this case be the backstop because they are not 

getting private insurance and you do not have the policies in place, 

and then they are coming to us and saying, ‘‘Will you fix this drainage issue, this erosion issue?’’ So trying to realign those incentives 

is the same issue whether you are local or national. 

Senator JOHNSON. OK. Dr. Kirshen. 

Mr. KIRSHEN. I am not an expert on insurance, but I know if 

water rates go up, people start to conserve. So I think it is very 

important we send the right market signals for climate change preparedness as well. 

I also want to say that I think the engineering and the science 

community and the social science community, I think we know how 

to do adaptation, and we need to send the right signals to the market to give us the opportunity to work with stakeholders to implement adaptation. 

Senator JOHNSON. OK. Again, thank you all for your testimony. 

Thank you, Mr. Chairman. 

Chairman CARPER. [Presiding.] Thank you. 

I just asked my staff to double-check to see when we passed the 

omnibus appropriations bill, if there was a 2-year stay on the effective implementation of the flood insurance, changes to the laws 

that were—was it Biggert-Waters legislation? And my understanding is that there is a 1-year stay, but I think it expires at the 

end of this fiscal year. So there is a great opportunity for us to take 

some of what you said here today and to work with the Administration, who is not wild about the legislation that the Senate has 

passed on flood insurance, and to work especially on this Committee and to see if we cannot make sure that we are properly 

aligning the incentives to advise folks to do what they need to do 

so that it does not all fall on the taxpayers. 

I notice out in the audience Tony Pratt. Collin O’Mara referenced 

him by name, and, Tony, it is great to see you. Thank you so much 

for all the good you do for the people of our State and really the 

example that I think you help set for folks in other States as well. 

You said something, Ms. Patton, in your testimony—I think you 

mentioned some actions that Congress could take to improve resilience, and you said—I am just going to read it. The first one is 

pretty short. It says, ‘‘Use the language of the Extreme Weather 

Title of the Water Resources Development Act as an example of 

what could be applied to improve the resilience requirements framing the hundreds of billions of dollars the Federal Government invests annually in water, port, highway, transit, and aviation infra-
32 

structure.’’ And I think at that point, I looked at both of your colleagues as witnesses, and they were both vigorously nodding their 

heads up and down. I think I know why, but I am going to ask 

them. Secretary O’Mara, why were you so effusive in your response 

to Ms. Patton’s testimony at that point? 

Mr. O’MARA. Right now, I mean, there is a significant disconnect—and it is not just within WRDA; I mean, it is also kind 

of other appropriation bills—where the design standards have not 

kept up with the risks. And we saw this, frankly, in Delaware at 

the Indian River Bridge where we built a beautiful new bridge, 

$150 million, but we were not successful working with the Army 

Corps to bring the protection necessary through our cost sharing— 

we were happy to pay our share—of a dune system to protect that 

asset. And so either having a better design or more protection, kind 

of across business lines and across agencies, is critical. And so 

whether it is the authority through WRDA or just additional language in the authorizations and making sure that the designs are 

stronger across all those—it is not just transportation, but wastewater and the community development block grant in particular, I 

mean, those are the lifeblood of many municipalities and States in 

terms of delivering projects. And having that especially with the 

cost share, having more accountability in there, could save a lot of 

money in the long run. 

Chairman CARPER. All right. Thanks. Dr. Kirshen. 

Mr. KIRSHEN. I am not going to say too much because I am not 

a real expert on this, but just like—— 

Chairman CARPER. That never stops us from weighing in. 

[Laughter.] 

Mr. KIRSHEN. But I am going to say that from my observations 

working with communities, there are many institutional barriers to 

adaptation, and we have to address them as well as the financial 

ones. This is an example of some of them. 

Chairman CARPER. OK. Thanks. 

The next question will be for, I think, probably Secretary O’Mara 

and Dr. Kirshen. Mitigation can, as we know, be very cost-effective 

in reducing lives lost and damages caused by natural disasters. I 

believe we have had a lot of success with mitigation in Delaware, 

in part because of the fellows that are sitting here in front of us 

today. I think we have done it with a relatively small investment, 

saving our State a lot of money. And I would just ask a question, 

if I could, of you, Dr. Kirshen, and then one of Secretary O’Mara. 

But, Dr. Kirshen, based on your research, how beneficial is extreme 

weather mitigation, especially long-term planning and when it 

comes to saving money? 

Mr. KIRSHEN. Well, I think, as I said earlier, we are getting extraordinary benefit/cost ratios, if we really look at the benefits of 

adaptation versus doing nothing, benefit/cost ratios of, 4 up to 30 

in some cases. So it is extremely beneficial to do this. And I think 

communities realize this. I am working with quite a few local communities in Massachusetts and New Hampshire on adaptation. 

Communities get it because they are in charge of infrastructure, 

and they are looking for help in how to do this. I mean, it is more 

than just giving them the data. They also need people to help them 

interpret the data and also think about how to use the data in 
33 

planning for climate change. The problem with climate change is 

the uncertainty. We are not exactly sure what the future climate 

is, but we know how to deal with uncertainty through scenario 

analysis and other decision and analytical techniques. 

So I think we have to provide support to the communities to do 

planning, which is relatively cheap compared to the huge costs we 

are going to face if we do not do good planning. Thank you. 

Chairman CARPER. OK. Thank you. 

And, Secretary O’Mara, just to followup on that, based on your 

experiences, what needs to be done to encourage and support State 

and really local governments, too, to support individuals and businesses to adopt mitigation measures such as adapting or adopting 

updated building codes to better address the threats of extreme 

weather? 

Mr. O’MARA. Yes, I think there are kind of two pieces to the 

equation: one deals with something Senator Johnson was raising 

about the economics and making sure the economics of inaction are 

very clear to folks; and then also, kind of toughening up a little bit 

and making sure if folks do not take those actions, that government does not, come in and bail them out after the fact, which is 

obviously always the easier political outcome, and if we are able to 

do those things, you will see behavior change fairly quickly. I 

mean, the money is going to drive a lot of these investments. 

I do think that there are significant opportunities for the Federal 

Government to incentivize and reward those communities that take 

the types of actions that we have all been talking about. And so 

whether that is earlier consideration for Federal resources, whether 

it is, you know, competitive grants, or even having a slightly higher 

percentage for either percentage allocations for match or other 

types of Federal assistance, where if you have done the hard work, 

it is going to save the Federal Government money in the long run. 

Because, for example, in Delaware, we did not have individual assistance claims that met the FEMA threshold after Sandy because 

most of our systems worked. Our dunes worked. Rehoboth was intact. We were not hit as hard as some other States, but there are 

States to the south of us that received a lot of Federal money, and 

we did not really receive any from the Housing and Urban Development (HUD) because our systems were successful. We should be either rewarded or incentivized in some ways. And the other States 

that do not take those actions should be penalized in some ways. 

And I think aligning those incentives, as you have often talked 

about, is some work that this Committee I think could really lead 

on and really align some incentives to drive great investments at 

the local level. 

Chairman CARPER. All right. Thanks for saying that. 

Ms. Patton, if I could, a question for you. With the insurance 

companies having a long history of risk management when it comes 

to extreme weather events, are there ways to create more publicprivate partnerships to help share the knowledge between Federal 

and State and local governments? 

Ms. PATTON. I believe that there are, and I think it is very important to continue those and to take those exemplars that you 

have which are ongoing and expand them. As I mentioned earlier 
34 

in my testimony, I am very excited about the Resilience STAR pilot 

at DHS. It provides a framework—— 

Chairman CARPER. So am I. Let the record show so am I. 

Ms. PATTON. It provides a framework in which we can actually 

and we are collaborating in a public-private partnership context. 

We are just at the beginning of this pilot, but I can see it very easily extended to the commercial and infrastructure context. And 

when that happens and you can actually create a resilient community, it would enable other private sector opportunities. Other types 

of incentives may present themselves. If you have a resilient community, it may be obvious that that might be a really good place 

to invest. It might be obvious that the risks where loans are placed 

under those circumstances are reduced. It is not just about insurance. It is about the long-term functionality and economic resilience of that community to be able to survive and thrive even before, during, and after extreme weather events. 

That is just one example. I think that to the extent that some 

of the other recommendations of the panel can be followed through 

in terms of providing opportunities with infrastructure investment 

and matching funds, that will provide other opportunities for private sector to inject themselves into the process. 

Chairman CARPER. All right. Thanks. 

One final question, and I am going to ask you to make just real 

brief answers because our votes have begun. As you know, we are 

at a time when we are trying to further reduce our Federal spending. It is down from a $1.4 trillion deficit 4 years ago to this year 

it will be about $550 billion. But as a result, some of my colleagues 

have been critical of extreme weather mitigation efforts because 

they cost the Federal Government money, such as beach replenishment for coastal communities, but other things as well. 

What are the counterarguments to those who say that taking the 

steps needed to build resilience are really too costly and, therefore, 

should not be taken? And do you have any parting advice to us on 

how we can better plan for extreme weather events and reduce financial risks to our government? I would ask you to wrap it up 

fairly briefly, but, Secretary O’Mara, would you close us out with 

that? 

Mr. O’MARA. Sure. I think we let the economics speak for themselves. I think that, if we can say that an extra dollar invested in 

the Army Corps’ protection line is going to save you $5 or $10 on 

the FEMA budget, that is a compelling argument. I will take a 5:1 

return any day. 

The same thing can be said for many other types of infrastructure investments today, and I think there is a huge opportunity 

right now because we do have data that we could collect fairly easily between communities that were well prepared before Hurricane 

Sandy and ones that were not as well prepared before Hurricane 

Sandy. We should be collecting that data as we speak to make sure 

we know the costs to the Federal Government for communities that 

were not prepared. 

Now, you have two communities in New Jersey, for example, one 

had healthy dunes, one did not. The one without healthy dunes is 

getting significantly more money. We should be quantifying that 
35 

because that could help make your case to your colleagues about 

the cost savings from making the investments up front. 

Chairman CARPER. Good. Thanks. Very briefly, Dr. Kirshen? 

Mr. KIRSHEN. I agree with Secretary O’Mara, but, again, as everyone said, an ounce of prevention is worth a pound of cure. 

Chairman CARPER. You have got it. 

Mr. KIRSHEN. And I think that is the solution. 

Chairman CARPER. Good. Thank you. Ms. Patton. 

Ms. PATTON. I would also agree that economics do speak for 

themselves. I think it is not just about the expense. It is about the 

potential interruption to the gross domestic product (GDP) for the 

impacted regions and about the potential for actual communities to 

no longer exist or to be severely interrupted not just for weeks but 

for years and to not be restored to what they were before. So the 

investment and resilience has both direct economic value, but it 

also has social value in the short term and long term. 

Chairman CARPER. Let me conclude. First of all, thank you, 

thank you all. You have a lot going on in your lives, but we are 

grateful that you took some time to spend this morning with us. 

The other thing, I go back to what I said as we were beginning 

this hearing—Mike Enzi, the Senator from Wyoming, one of my favorite colleagues, I think everybody loves Mike Enzi here. But his 

80/20 rule, and how do you get a lot done? Focus on the 80 percent 

where we agree, set aside the 20 percent where we do not agree. 

There is a lot of agreement here. 

One of the things I love, this could have been a fairly controversial hearing or a combative hearing. It was not at all. Senator 

Johnson came, and I am grateful that he stayed, and he stayed a 

lot longer than he had actually frankly anticipated staying because 

he thought it was worthwhile. And there is a good deal that we can 

agree on and work together on, and that is what the people of 

America sent us here to do. 

So I just thank you for helping us to find that 80 percent, find 

the middle, and we are going to have some more questions that 

folks will ask of you. Some who were here, some Senators who were 

not here will submit those questions, and I think they have about 

15 days to do that. And if you receive any of those questions, if you 

could respond promptly, we would be most grateful. 

And with that, this hearing is adjourned. Thank you so much. 

[Whereupon, at 11:47 a.m., the Committee was adjourned.] 

(37) 

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Æ