Element VI Consulting - Element VI Consulting

Is Climate Change a “Natural” Disaster… And If Not, Will You Be Paying For It?

Agencies and courts will soon start deciding whether global warming-induced drought, floods, wildfires, etc. should be deemed “natural disasters”. There is no clear answer to this yet, and significant consequences will flow from those decisions. Whether something is a “natural disaster” determines availability of federal crop insurance, aid to small businesses, agricultural import quotas and tariffs (“because of a natural disaster . . . the President may temporarily increase the quantity of imports of the agricultural product . . .”); federal highway funding (“the Federal share payable for eligible emergency repairs to minimize damage . . . after the actual occurrence of the natural disaster or catastrophic failure may amount to 100 percent of the cost”), etc. In case you wondered, an asteroid collision would be regarded as a “natural disaster”.

Businesses should review the relevant provisions of federal and state law applicable to them, and prepare for the possibility that climate-change induced events will not be covered by the term “natural disaster”.

One particularly relevant provision is in the Oil Pollution Act of 1990. If your tanker is caught in a hurricane and starts leaking crude, you’re liable for clean-up costs, natural resource damages, property damage, lost profits, etc.; BP and Transocean have recently become very, very familiar with the OPA. However, if the storm was “an unanticipated grave natural disaster”, then you’re off the hook.

As a practical matter, this would be the difference between a tanker spill caused by a September Category 2 hurricane in the Gulf (you’re liable), and a Category 4 off Cape Hatteras in May (you’re not). You should reasonably anticipate the former, but the Category 4 off Hatteras in May is a “natural phenomenon . . . the effects of which could not have been prevented or avoided by the exercise of due care or foresight”.

Or at least it used to be. But perhaps no longer, because nowadays someone will assert that you should have anticipated the May Hatteras hurricane just as the September one in the Gulf, and in front of a jury that someone will point to any number of climate models that say so.

The “Natural” Question is Looming Out There.

Whether climate-related conditions are “natural” or not has already arisen in the context of drought and the Stafford Act, which gives the President wide-ranging authority to deploy federal resources in cases of disasters and emergencies. The Act defines “Major Disaster” as “any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, or explosion, in any part of the United States, etc.” (emphases added).

If a court were to say that climate-induced drought is not a “natural” disaster, then the President has no Stafford Act authority. (Because the Act recognized that people are sometimes responsible for fires and floods, the President could respond to climate-induced floods or wildfire.)  Nor would the government automatically take the position that climate-induced events were “natural” so that it could act; to the extent that FEMA has taken any position on this, it was just the opposite. For years FEMA resisted updating its flood plain maps to include climate-induced effects, on the grounds that its authority only extended to “natural” conditions, and that climate-induced flooding – including sea-level rise — was not “natural”.

This is not an academic exercise; it explicitly surfaced in the recent debate over what to do about low water levels in the Mississippi River. Business interests, including the Chamber of Commerce, API and the Farm Bureau, asked the Corps of Engineers to use the President’s Stafford Act authority to delay impoundment of Missouri River water

in order to maintain water levels in the Mississippi. The Corps ultimately decided that it lacked legal authority to modify its Missouri River regime for the purpose Mississippi River navigation, and dodged the tough question by carefully avoiding any mention or discussion of the Stafford Act.

The Corps—and other agencies — cannot continue to avoid this issue, which will be decided on a purely ad hoc basis. While Congress has already recognized this issue (in 2008 it instructed the Defense Department that future Quadriennial Defense Reviews, “shall also examine the capabilities of the armed forces to respond to the consequences of climate change, in particular, preparedness for natural disasters from extreme weather events . . .”), there is little reason to believe that Congress will act to clarify existing law. Companies need to be aware of this risk and plan accordingly.