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Financial Assurance Mandates: No Substitute for Agency Expertise and Oversight

August 2018

Citation: 48 ELR 10669

Issue: 8

Author: Rachel Cleetus, Ph.D.

Zachary Arnold’s article on financial assurance mandates (FAMs) highlights an important issue of growing urgency: the exposure of industrial facilities—-many with toxic products or by-products—to risks of flooding exacerbated by sea-level rise and storm surge. However, the article is far too sanguine about the ability of this one policy tool to protect communities located in proximity to these industrial facilities, and it is overly dismissive of the role of complementary policies including robust chemical regulation, disclosure, and standards for pre-disaster mitigation measures and post-disaster response. Rather than pit these policies against one another using pejorative terms like “command-and-control,” a more thoughtful and comprehensive approach would be to combine elements of these to implement a suite of policies designed to help build the resilience of industrial facilities to climate and extreme weather impacts while prioritizing the safety and well-being of local communities. Finally, to enact any of these policies at the national level will require political will from Congress and the administration—both of which are sorely lacking with respect to addressing climate change.

Rachel Cleetus is the Lead Economist and Policy Director for the Climate and Energy Program at the Union of Concerned Scientists, where her research focuses on the impacts of climate change and climate and clean energy solutions.

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