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With the April 15 tax deadline now behind us, many filers are probably pondering how their tax money is used — and whether those uses are constructive or wasteful. Given that some companies have made great use of “negative externalities” over decades, we might want to ponder how lack of foresight has pushed costs onto all of us, whether we like it or not.
Sadly, one of the issues squandering taxpayer resources is the ramifications of climate change. Had more corporate managements thought long-term, these effects could have been avoided. Fortunately, some companies and investors are currently trying to do something about it. These are the companies investors should keep their eye on, because they’re actively preparing for the future.
Public funds going down the storm drain
Just in time for the end of tax season, Ceres, a coalition of investors, companies, and public interest groups advocating for sustainability leadership, has recently revealed some figures about the tax ramifications of climate change.
Take extreme weather’s burgeoning costs: Many of these are shifted to taxpayers through federal and state spending. The National Flood Insurance Program is a case in point. With the devastation of Superstorm Sandy, losses from last year are expected to reach about $8 billion. The NFIP may collect $3.5 billion each year in premiums, but the agency’s paid claims have exceeded its premiums collection in four of the last eight years.
With the recent major drought impacting farmers, the Federal Crop Insurance program has experienced triple the losses of just three years ago, skyrocketing to $16 billion in 2012.
Last year, wildfires raged through more than 9 million American acres, resulting in the third-worst year for fires in U.S. history. The Forest Service exceeded its fire suppression budget by $400 million, a trend that has continued for 20 years now. It’s so busy putting out fires that money is not allocated to other land-management uses. Meanwhile, climate models are predicting increased fires in the future.
Obviously, 2012 has been a turning point, and in a scary way. It has given stark and more frequent examples of how climate change is altering the world we live in more and more all the time.
Embracing positive change instead of fearing it
Fortunately, some companies and organizations are actively dealing with the issue, despite the lack of U.S. government policies.
Ceres has formed a splinter advocacy coalition, Business for Innovative Climate & Energy Policy, which seeks to work with policymakers to pass energy and climate legislation to hurry along a shift to a low-carbon modern economy in America.
