Yesterday the Government Accounting Office released a statement by David M. Walker, Comptroller General of the United States, on the challenges for the National Flood Insurance Program (PDF), before the Chairman, Committee on Banking, Housing and Urban Affairs, U.S. Senate. The report notes the tremendous impact of the hurricanes of 2005 for the program, and goes over some of the basic challenges facing the NFIP, like the fact that the program is by design not actuarially sound. However, the report does not address what is the most fundamental flaw in the program: it is built upon a vision of climate science that does not square with reality.

As we discusses in depth here last week, policy makers almost always have to simplify their world in order to make policies. Such simplifications are often practically useful if they lead to desired outcomes. But if a policy is based on a fundamentally incorrect notion of how the world works, the policy may fail or even lead to outcomes opposite of those intended. Such is the case with the NFIP. The NFIP is at its core based on the notion that climate is stationary and unchanging. It does not recognize climate variability or change. As such it produces maps of flood risk that are used to guide implementation of the program that are based on a completely incorrect vision of how the world works. Comptroller Walker’s testimony yesterday observed,

Accurate flood maps that identify the areas at greatest risk of flooding are the foundation of the NFIP. Flood maps must be periodically updated to assess and map changes in the boundaries of floodplains that result from community growth, development, erosion, and other factors that affect the boundaries of areas at risk of flooding. FEMA has embarked on a multiyear effort to update the nation’s flood maps at a cost in excess of $1 billion. The maps are principally used by (1) the approximately 20,000 communities participating in the NFIP to adopt and enforce the program’s minimum building standards for new construction within the maps’ identified flood plains; (2) FEMA to develop accurate flood insurance policy rates based on flood risk; and (3) federal regulated mortgage lenders to identify those property owners who are statutorily required to purchase federal flood insurance.

No mention there of climate variability or change. Here is what I said in a 1999 paper (PDF) about flood risk and how perceptions of flood risk are the number one fallacy policy makers hold about floods:

The concept and terminology of the ‘100-year floodplain’ was formally adopted by the federal government as a standard for all public agencies in 1977 under Executive Order 11988. In 1982 FEMA reviewed the policy and found that it was being used in the agencies and, lacking a better alternative, concluded that the policy should be retained (FIFMTF, 1992, p. 8-3). However, despite the FEMA review, use of the concept of the 100-year flood is encumbered by a number of logical and practical difficulties (cf. Lord, 1994).

First, there is general confusion among users of the term about what it means. Some use the term to refer to a flood that occurs every 100 years, as did the Midwestern mayor who stated that ‘after the 1965 flood, they told us this wouldn’t happen again for another 100 years’ (IFMRC, 1994, p. 59). Public confusion is widespread: A farmer suffering through Midwest flooding for the second time in three years complained that ‘Two years ago was supposed to be a 100-year flood, and they’re saying this is a 75-year flood, What kind of sense does that make? You’d think they’d get it right’ (Peterson, 1995).

Second, the ‘100-year flood’ is only one of many possible probabilistic measures of an area’s flood risk. For instance, in the part of the floodplain that is demarcated as the ‘100-year floodplain’ it is only the outer edge of that area that is estimated to have an annual probability of flooding of 0.01, yet confusion exists (Myers, 1994). Areas closer to the river have higher probabilities of flooding, e.g., there are areas of a floodplain with a 2% annual chance of flooding (50-year floodplain), 10% annual chance (10-year floodplain), 50% annual chance (2-year floodplain) etc., and similarly, areas farther from the river have lower probabilities of flooding. The ‘100-year floodplain’ is arbitrarily chosen for regulatory reasons and does not reflect anything fundamentally intrinsic to the floodplain.

Third, the ‘100-year floodplain’ is determined based on past flood records and is thus subject to considerable errors with respect to the probabilities of future floods. According to Burkham (1978) errors in determination of the ‘100-year flood’ may be off by as much as 50% of flood depth. Depending on the slope of the flood plain, this could translate into a significant error in terms of distance from the river channel. A FEMA press release notes that ‘in some cases there is a difference of only inches between the 10- and the 100-year flood levels’ (FEMA, 1996). Further, researchers are beginning to realize an ‘upper limit’ on what can be known about flood frequencies due to the lack of available trend data (Bobée and Rasmussen, 1995).

Fourth, the 100-year floodplain is not a natural feature, but rather is defined by scientists and engineers based on the historical record. Consequently, while the ‘100-year floodplain’ is dynamic and subject to redefinition based on new flood events that add to the historical record, the regulatory definition is much more difficult to change. For instance, following two years of major flooding on the Salt River in Phoenix, Arizona, the previously estimated 100-year flood was reduced to a 50-year flood (FIFMTF, 1992, p. 9-7). What happens to the structures in redefined areas? Any changes in climate patterns, especially precipitation, will also modify the expected probabilities of inundation. For example, some areas of the upper Midwest have documented a trend of increasing precipitation this century (Changnon and Kunkel, 1995; Bhowmik et al., 1994). Furthermore, human changes to the river environment, e.g., levees and land use changes, can also alter the hydraulics of floods. Finally, the extensive use of the term ‘100-year flood’ focuses attention on that aspect of flooding, sometimes to the neglect of the area beyond the 100-year flood plain (Myers, 1994).

The fact of the matter is that the NFIP is based on the idea that floods occur with a constant probability and that such constancy can be quantified in maps to guide development and insurance. This assumption is fundamentally wrong. The NFIP cannot succeed until it addresses this fundamental flaw. Meantime, expect the public to foot the bill for a policy that cannot work because it fundamentally mischaracterizes how the world really works.