Flood insurance is rising — that's a good thing

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Apr 01, 2022 View in browser   By Debra Kahn Presented by Ball Corporation THE WEEK THAT WAS Homes are surrounded by floodwaters from Tropical Storm Harvey in Spring, Texas, in 2017. | (David J. Phillip, File/AP Photo) FLOODING THE ZONE — It's finally happening: Property insurance rates are going to reflect the actual risk of a home flooding. Millions of flood-prone properties will start receiving more-accurate insurance premiums in a long-awaited federal adjustment of flood insurance rates that takes effect today, Thomas Frank reports for POLITICO's E&E News. Almost 4 million policyholders will see increased rates under the move by FEMA's National Flood Insurance Program, which sells most U.S. flood coverage. About 200,000 of them will face sharp increases, while the other 3.6 million will see moderate increases. The adjustments will happen as policyholders renew their coverage. The changes don't solve the program's basic problem of insolvency — they just shuffle who pays what. The shift could help Americans adapt to climate change: By making insurance costlier in flood-prone zones, it will discourage development there, just as floods are getting worse. FEMA is describing the change as "equity in action" because the premium increases will mostly affect higher-value properties, while owners of lower-value properties typically will see their rates decline. About 1.2 million policyholders will have lower rates. It's happening no thanks to Congress, which has been trying to block it for months. Coastal-state lawmakers from both parties, including Sens. Robert Menendez (D-N.J.) and John Kennedy (R-La.), are expressing concern over how it will affect their constituents. "The sclerosis of Congress may allow a good thing to happen in this case," said R.J. Lehmann, a flood-insurance expert at the International Center for Law & Economics. It's not all hunky-dory now: Plenty of people who need flood insurance still don't have it. An inspector general report from the Department of Housing and Urban Development found about 31,000 federally backed mortgages in the riskiest areas are uninsured for floods, exposing taxpayers to billions of dollars in increased liability, as Tom reports today. BUILDING BLOCKS THE BUILT ENVIRONMENT — The federal government also just put out new low-carbon standards for major federal construction projects, as Arianna Skibell reports for POLITICO's E&E News. The General Service Administration standards released Thursday will require federal contractors to use climate-friendly concrete and asphalt in all the agency's major projects. That's not nothing: The GSA oversees $75 billion in annual contracts, and the agency's real estate portfolio comprises more than 370 million square feet. The standards will also apply to projects funded through last year's infrastructure package, including $3.4 billion to modernize 26 land ports of entry along the U.S. borders with Canada and Mexico. The industrial sector is a major source of greenhouse gas emissions. Concrete, steel and aluminum account for 23 percent of total global emissions. And asphalt — which covers more than 40 percent of U.S. cities — exacerbates rising temperatures, particularly in urban areas. GSA didn't say what kind of emissions reductions it expects to get out of the rules, but they would limit the agency to doing business with companies whose total emissions are 20 percent lower than the national limits recommended by the New Buildings Institute, which outlines modern building codes. Contractors will have to disclose the greenhouse gas emissions associated with their building materials, including carbon generated from a product's extraction, manufacturing and transportation. And the standards will require companies to draw from a menu of eco-friendly techniques for making and installing asphalt, including using recycled materials and sun-reflecting glazes. Cost-wise, it could pencil out. About half of concrete and asphalt manufacturers reported to the agency that low-carbon versions of their products are cost-competitive with conventional equivalents. Read more from Arianna here.   A message from Ball Corporation: The U.S. recycles just 38% of aluminum cans back into cans. Our economy needs aluminum, but most cans end up in landfills. New research shows reaching a 90% recycling rate would be enough aluminum to not only improve America's domestic supply chain but add $1.6 billion to our economy, create 103,000 jobs and raise wages by billions in related industries. Better still, recycled aluminum takes 92% less energy to produce and--unlike plastic--aluminum is infinitely recyclable. ball.com/realcircularity   Oil drilling machinery sits outside of Goldsmith, Texas. | (Eli Hartman/Odessa American via AP) MORE OIL, MORE MINING — President Joe Biden made more moves on Thursday aiming to insulate the U.S. from the economic effects of sanctions on Russia. He announced the release of a massive 1 million barrels of oil per day from federal reserves, prodded oil companies to drill more on public lands and said he would use the Defense Production Act to encourage domestic mining of minerals to make batteries for renewable energy and electric vehicles. What does it all mean? It's mostly about optics, at least for the gas part. Presidents are generally powerless to make short-term changes to fuel prices, as POLITICO's Ben Lefebvre notes. Oil and fuel markets are essentially spiderwebs registering vibrations from all over the globe. Oil prices fell on the news but might rebound quickly, as they did the first two times Biden tapped the reserves. Biden said the releases could cut the price of gasoline by 10 cents to 35 cents per gallon — but not for several days or weeks. (Your California-based host paid north of $6 last week.) "This is an attempt to buy time, change the narrative," Rachel Ziemba, senior fellow at the Center for New American Security, told Ben. "It's a difficult balancing act. There's not a lot of great options." The DPA move is somewhat meatier, as Jael Holzman and Robin Bravender report for POLITICO's E&E News . The main ways it would likely work are by helping mining companies with economic feasibility studies, modernizing their facilities, and getting other types of metals out of existing mines that were built for a different mineral. The order would produce "strong optics" that send "signals" to potential investors in new U.S. mines, said Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines. Not to be too cynical, but — as Emma Dumain and Jael report — it could also be viewed as a gift to Sens. Joe Manchin (D-W.Va.) and Lisa Murkowski (R-Alaska), powerful swing votes in a 50-50 Senate the administration needs to revive talks on the "Build Back Better Act." Mining, of course, has environmental impacts. Climate hawks in Congress are split. And environmental justice groups are worried it will interfere with a new White House-convened group meant to address concerns about the impacts of mining to Indigenous communities. "We have seen abuses, and we have seen many sites that have been abandoned," said Sen. Ben Ray Luján (D-N.M.). "The United States government takes responsibility and then it takes a lifetime to be able to go to reclaim, but what's never talked about are the people in the community that live in that community, how harmed they are."   A message from Ball Corporation:   YOU TELL US GAME ON – Welcome to the Long Game, where we're delivering the latest on efforts to shape our future. Tuesday through Friday, we've got data-driven storytelling, compelling interviews with industry and political leaders, and more news to keep you in the loop on sustainability. Our team is sustainability editor Greg Mott, deputy editor Debra Kahn, reporters Lorraine Woellert and Catherine Boudreau and digital producer Jordan Wolman. Reach them at gmott@politico.com, dkahn@politico.com, lwoellert@politico.com, cboudreau@politico.com and jwolman@politico.com. Want more? Sign up for the Long Game. Four days a week and still totally free!   SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today.     WHAT WE'RE CLICKING — Elon Musk could signal he's sincere about inviting a union vote at Tesla by addressing the company's NLRB violations, the head of the United Auto Workers says. — A former star of The O.C. (remember The O.C.?) is now an unlikely anti-crypto bro.   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.     LOOK AHEAD April 5 – A Senate Environment and Public Works subcommittee discusses the implementation of the Drinking Water and Wastewater Infrastructure Act at 10 a.m. April 5 – A House Transportation and Infrastructure subcommittee holds a hearing on FEMA priorities at 10 a.m. April 5 – The House Natural Resources Committee discusses the fossil fuel industry's role in unstable gas prices at 10 a.m. April 6 — The American Council for an Energy-Efficient Economy holds an International Symposium on Energy Efficiency at 10 a.m. April 7 — The Senate Energy and Natural Resources Committee holds a hearing on critical mineral demand and recycling at 10 a.m.. Events are listed in Eastern Time   A message from Ball Corporation: Aluminum cans are the only commonly used beverage containers that can be infinitely recycled.  Recycled aluminum also uses 92% less energy. Increasing the U.S. recycling rate for aluminum cans to 90% would help reduce aluminum imports and would give a real boost to struggling American businesses and workers. New research shows how recycling aluminum cans is good for business, since a 90% recycling rate would: ● Raise wages in recycling industries from $2.1B to $5B ● Create 103,000 jobs ● Grow the U.S. economy by $1.6 billion A 90% recycling rate would also be a giant leap forward for U.S. sustainability:  ● Keeping 1.3M tons of material out of landfills each year ● Cut emissions by the equivalent of taking 2.6 million cars off the road ● Save enough energy to power 1.5 million homes for an entire year Learn how your state would benefit from recycled aluminum at ball.com/realcircularity     Follow us on Twitter Catherine Boudreau @ceboudreau Debra Kahn @debra_kahn Greg Mott @gwmott Lorraine Woellert @Woellert Jordan Wolman @jordanwolman   Follow us

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