Potential increases in hurricane damage in the United States: Implications for the federal budget

Damage from hurricanes is expected to increase significantly in the coming decades because of the effects of climate change and coastal development. In turn, potential requests for federal relief and recovery efforts will increase as well.

The Congressional Budget Office (CBO) estimates that, over time, the costs associated with hurricane damage will increase more rapidly than the economy will grow. Consequently, hurricane damage will rise as a share of gross domestic product (GDP), which provides a measure of the nation’s ability to pay for that damage.

In considering how to ease the pressure to spend federal dollars on relief and recovery from hurricane damage, CBO examined three diverse approaches.

• Limiting greenhouse gas emissions
• Shifting more costs to state and local governments and private entities, thereby reducing coastal development
• Investing in structural changes to reduce vulnerability to hurricanes.