Federal incentives for community-level climate adaptation: an evaluation of FEMA’s Community Rating System

Abstract In response to growing threats of climate change, the US federal government is increasingly supporting community-level investments in resilience natural hazards. As such programs become more widespread, evaluating their efficiency and equity essential. The Community Rating System (CRS), which part National Flood Insurance Program (NFIP), a promising example policy designed reduce flood losses by providing financial incentives for local adaptation. exchange community engagement range risk communication reduction activities, CRS provides discounts on NFIP premiums ranging from 5% 45%. Using national-scale claims, policies, data between 1998 2020, we assess program, asking whether it has been effective reducing losses, how can be improved, what lessons holds similar programs. We find that participation associated with reduced damage, percent claims roughly proportional premium discounts. Among those related ‘Flood Damage Reduction’ are most 20%–30% decrease claims. Between cumulative damage reductions attributable were $11.4 billion; over same period, $12.1 billion. This close match an endorsement historically supports its future continuation. To improve CRS, recommend Federal Emergency Management Agency: (a) reexamine surcharge levied cross-subsidizes discounts, (b) allocate greater resources towards among smaller, under-resourced communities. general, serves as model other market-based seeking stimulate investment resilience.