The four major types of natural environmental hazards that can result in property damages or lost lives are (1) geophysical events, such as earthquakes, tsunamis, and volcanic eruptions; (2) meteorological events, such as hurricanes and tropical storms, typically generated in the Caribbean Sea and Atlantic Ocean; (3) hydrological events, such as floods; and (4) climatological events, such as extreme temperature, drought, and wildfires. Economic losses (both insured and uninsured) from natural environmental hazards, especially from meteorological and climatological events, have increased in recent decades and have occurred with large spatial and interannual variability. For example, 8 of the 10 most costly catastrophes in the United States have occurred since 2000, including Hurricane Katrina (2005), which caused more than $80 billion in economic losses (both insured and uninsured) to private property and infrastructure and, more recently, Hurricane Sandy (2012), which caused more than $65 billion in economic losses. Most observers agree that it is highly likely that the United States will continue to experience increasing losses from natural catastrophes and that those losses will place increasing fiscal pressure on federal, state, and local governments as well as private risk transfer markets, which are currently responsible for a sizable share of the total cost of financing recovery and reconstruction. This book examines the rising cost of financing the recovery and reconstruction following natural disasters; reports of the nation’s increasing vulnerability (and resilience) to coastal hazards; questions concerning the capacity of state and local government officials and private insurers to deal with the rising costs; and disagreements concerning the appropriate role for the federal government in dealing with these costs which have all become major topics of congressional debate.
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