Coastal adaptation, government-subsidized insurance, and perverse incentives to stay

The law should be a critical tool in promoting and directing climate change adaptation in the USA. This should be particularly true in the nation’s extensive coastal zone, much of which is subject to increasing rates of sea level rise, coastal erosion, increasing numbers of increasingly powerful storms, and saltwater intrusion. However, significant coastal infrastructure hampers many coastal adaptation strategies by making retreat both expensive and politically unpalatable. This article examines the specific role of insurance and other financing programs in coastal adaptation strategies. Insurance operates primarily to mitigate risk. The article focuses specifically on the National Flood Insurance Program (NFIP), which is now driven by coastal catastrophes and is close to bankruptcy; Florida’s decision to provide state-financed insurance to coastal property owners in the wake of the 2004–2005 hurricane season; and, conversely, the decisions of other states to use state and federal financing instead to facilitate coastal adaptation, including buyouts of transitioning coastal properties.