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Removing development incentives in risky areas promotes climate adaptation

Author

Listed:
  • Hannah Druckenmiller

    (California Institute of Technology
    Resources for the Future
    National Bureau of Economic Research)

  • Yanjun (Penny) Liao

    (Resources for the Future)

  • Sophie Pesek

    (University of California)

  • Margaret Walls

    (Resources for the Future)

  • Shan Zhang

    (Old Dominion University)

Abstract

As natural disasters grow in frequency and intensity with climate change, limiting the populations and properties in harm’s way will be key to adaptation. This study evaluates one approach to discouraging development in risky areas—eliminating public incentives for development, such as infrastructure investments, disaster assistance and federal flood insurance. Using machine learning and matching techniques, we examine the Coastal Barrier Resources System (CBRS), a set of lands where these federal incentives have been removed. We find that the policy leads to lower development densities inside designated areas, increases development in neighbouring areas, reduces flood damages and alters local demographics. Our results suggest that the CBRS generates substantial savings for the federal government by reducing flood claims in the National Flood Insurance Program, while increasing the property tax base in coastal counties.

Suggested Citation

  • Hannah Druckenmiller & Yanjun (Penny) Liao & Sophie Pesek & Margaret Walls & Shan Zhang, 2024. "Removing development incentives in risky areas promotes climate adaptation," Nature Climate Change, Nature, vol. 14(9), pages 936-942, September.
    • Handle: RePEc:nat:natcli:v:14:y:2024:i:9:d:10.1038_s41558-024-02082-3
    DOI: 10.1038/s41558-024-02082-3
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    References listed on IDEAS

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    1. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
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    4. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
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