Policymakers are increasingly viewing adaptation as a risk management strategy to protect vulnerable infrastructure that might be affected by changes in the climate. While adaptation measures—such as raising river or coastal dikes to protect infrastructure from sea level rise, building higher bridges, or increasing the capacity of stormwater systems—may be costly, there is a growing recognition that the cost of inaction could be greater. As stated in a 2010 NRC report, even though there are still uncertainties regarding the exact nature and magnitude of climate change impacts, mobilizing now to increase the nation’s adaptive capacity can be viewed as an insurance policy against climate change risks. In this context, it is important to understand (1) federal infrastructure investment, (2) the condition of existing infrastructure, (3) climate change adaptation as a risk management tool, and (4) the limited federal role in planning infrastructure projects. In total, the United States has about 4 million miles of roads; 30,000 wastewater treatment and collection facilities; and over 800,000 federal facilities such as military installations that provide for the nation’s defense and facilities where complex scientific and technological research is conducted. Collectively, this infrastructure connects communities, protects public health and the environment, and facilitates trade and economic growth, among other important functions. The nation’s highway and wastewater infrastructure is primarily owned and operated by state and local governments and the private sector. For instance, state and local governments own about 98 percent of the nation’s bridges. The federal government spends billions of dollars every year on transportation and wastewater infrastructure through a variety of funding mechanisms. According to a 2010 Congressional Budget Office report, total public spending on transportation and water infrastructure exceeds $300 billion annually, with roughly 25 percent of this amount coming from the federal government and the rest coming from state and local governments. infrastructure investments through federal assistance to states and local communities. For example, EPA’s Clean Water State Revolving Fund—a federal program that provides states and local communities with independent and sustainable sources of financial assistance, such as low- or no-interest loans to fund water quality projects—received an From 1956 to appropriation of just over $1.4 billion in fiscal year 2012.2007, the largest portion of annual public funding for transportation and water infrastructure was dedicated to highways. For the most part, the federal government supports these The federal government also owns and manages certain types of infrastructure. According to the General Services Administration, the federal government’s portfolio of building assets totaled approximately 3.35 billion square feet of space and over 800,000 building and structural assets with a total operating cost of $30.8 billion in 2010. This total includes large federal complexes such as NASA centers where scientists and engineers conduct research, design new aerospace technologies, and operate the International Space Station, among other activities. Congressional Budget Office, Public Spending on Transportation and Water Infrastructure, Pub. No. 4088 (Washington, D.C.: November 2010). NASA’s real property holdings include more than 5,000 buildings and other structures such as wind tunnels, laboratories, launch pads, and test stands, according to a December 2011 NASA Inspector General report.In total, these NASA assets represent more than $32 billion in current replacement value. The infrastructure examined for this report—roads, bridges, wastewater management systems, and NASA centers—was designed to last for decades. More specifically, according to the American Society of Civil Engineers, the average bridge in the United States is designed to last 50 years, and EPA data indicate that wastewater treatment plants typically have an expected useful life of 20 to 50 years before they require expansion or rehabilitation. Over 80 percent of NASA’s facilities are more than 40 years old and reaching the end of their designated life spans. Our past work and other studies have reported that much of the nation’s physical infrastructure is in poor condition and in need of repair or replacement. For example, as we reported in June 2010, many wastewater management systems were constructed more than 50 years ago and are reaching the end of their useful lives. Many of these systems do not have the capacity to treat increasing volumes of wastewater, particularly during periods of wet weather, leading to the release of untreated wastewater into water bodies. Citing such concerns, the American Society of Civil Engineers 2009 Report Card for America’s Infrastructure graded the condition of the nation’s wastewater infrastructure as “D-,” or between “poor” and “failing” on their rating scale.a “D-,” and a “C” for “mediocre,” respectively, due to identified structural deficiencies and other factors. Roads and bridges fared similarly in the report card, also earning Estimates to repair, replace, or upgrade aging roads, bridges, wastewater management systems, and federal facilities are in the hundreds of billions of dollars, not accounting for any additional costs to be incurred due to a changing climate, an important consideration for proposed adaptive measures that may require significant redesign, retrofitting, or replacement of planned or existing infrastructure in response to a changing climate. As we reported in May 2008, the current fiscal environment makes it even more important that federal, state, and local governments make prudent decisions on how to invest limited available Yet, in many cases, we resources as they address infrastructure needs. reported that federal infrastructure investment decisions are still based on conditions, priorities, and approaches that were established decades ago and are not well suited to addressing complex, crosscutting, and emerging challenges like climate change. Our May 2008 report identified principles that could guide a reexamination of federal infrastructure programs. These principles include creating well-defined goals based on identified areas of national interest, establishing and clearly defining the federal role in achieving each goal, incorporating performance and accountability into funding decisions, and employing the best tools and approaches to emphasize return on investment. GAO, Physical Infrastructure: Challenges and Investment Options for the Nation's Infrastructure, GAO-08-763T (Washington, D.C.: May 8, 2008). See also GAO, Transportation: Key Issues and Management Challenges, GAO-12-581T (Washington, D.C.: Mar. 29, 2012). for, absorb, recover from, and more successfully adapt to adverse events. Enhanced resilience results from better planning to reduce losses, rather than waiting for an event to occur and paying for recovery afterward. America’s climate change adaptation choices involve deciding how to cope with climate changes that we cannot, or do not, avoid so that possible disruptions and damages to society, economies, and the environment are minimized and—where possible—so that impacts are converted into opportunities for the country and its citizens. In some cases, such as in Alaska, the need to adapt has already become a reality. In most cases, however, adapting today is about reducing vulnerabilities to emerging or future impacts that could become seriously disruptive if we do not begin to identify response options now; in other words, adaptation today is essentially a risk management strategy. Further, as we reported in 2009, given the complexity and potential magnitude of climate change and the lead time needed to adapt, preparing for these impacts now may reduce the need for far more costly steps in the decades to come. Of particular importance are planning decisions involving physical infrastructure, which require large capital investments and which, by virtue of their expected life span, will have to be resilient to changes in climate for many decades. Substitutes for infrastructure could also affect adaptation decisions; damages from disruptions due to climate change would be greater, all else equal, when fewer alternatives are available. The long lead time and long life of large infrastructure investments require planning decisions to be made well before further climate change effects are discernible. Risk management is not a new concept, and it is used extensively almost anywhere decision makers are faced with incomplete information or unpredictable outcomes that may have negative impacts. Broadly defined, risk management is a strategic process for helping policymakers make decisions about assessing risk, allocating finite resources, and taking actions under conditions of uncertainty. Leading risk management guidance recommends a sequence of activities similar to the one described in the International Organization for Standardization (ISO) 31000:2009 standards on risk management. Specifically, these standards recommend that organizations such as federal agencies develop, implement, and continuously improve a framework for integrating risk management into their overall planning, management, For risk management to be effective, reporting processes, and policies. these standards state that an organization should at all levels comply with the following principles: Risk management is not a stand-alone activity that is separate from the main activities and processes of the organization. Risk management is part of the responsibilities of management and an integral part of all organizational processes, including strategic planning and all project and change management processes. Risk management is part of decision making. Risk management helps decision makers make informed choices, prioritize actions, and distinguish among alternatives. Risk management explicitly addresses uncertainty. Risk management explicitly takes account of uncertainty, the nature of that uncertainty, and how it can be addressed. Risk management is based on the best available information. The inputs to the process of managing risk are based on information sources such as historical data, experience, stakeholder feedback, observation, forecasts, and expert judgment. However, decision makers should inform themselves of, and should take into account, any limitations of the data or modeling used or the possibility of divergence among experts. Concerning risk management for federal facilities, OMB issues guidance for agencies on managing non-information technology capital assets that contains risk management criteria. Under OMB’s guidance, agencies are to complete a business case for physical infrastructure investment that includes sections on alternatives analysis and risk management. Risk must be actively managed throughout the life cycle of the investment, and a risk management plan must be available to OMB upon request. The federal government has an inherently limited role in the project-level planning processes central to adapting infrastructure to climate change because these are typically the responsibility of state and local governments—except when federal assets are involved.