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Financing Adaptation to Climate-Induced Retreat from Coastal Inundation and Erosion

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  • Dobes, Leo
  • Chapman, Bruce

Abstract

Climate projections suggest increased inundation and erosion of beachfront property on the east coast of Australia over the coming century. Protective measures and accommodation to the effects of flooding offer initial lines of defence, but managed retreat will ultimately be required for some property owners. Current and disaster management frameworks offer little policy guidance on who should pay for retreat, or how. Ordinary insurance, catastrophe insurance, group risk insurance, catastrophe bonds and reverse mortgages offer potential solutions, but are ultimately flawed. This paper examines an innovative proposal in the form of mortgage contingent loans which could minimise government involvement, and therefore the risk to taxpayers.

Suggested Citation

  • Dobes, Leo & Chapman, Bruce, 2011. "Financing Adaptation to Climate-Induced Retreat from Coastal Inundation and Erosion," Working Papers 249536, Australian National University, Centre for Climate Economics & Policy.
    • Handle: RePEc:ags:ancewp:249536
    DOI: 10.22004/ag.econ.249536
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    References listed on IDEAS

    as
    1. Paul Raschky & Hannelore Weck-Hannemann, 2007. "Charity hazard - A real hazard to natural disaster insurance," Working Papers 2007-04, Faculty of Economics and Statistics, Universität Innsbruck.
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    3. Commission, Productivity, 2011. "Caring for older Australians," Inquiry Reports, Productivity Commission, Government of Australia, number 53.
    4. Joseph J. Cordes & Anthony M. J. Yezer, 1998. "In Harm's Way: Does Federal Spending on Beach Enhancement and Protection Induce Excessive Development in Coastal Areas?," Land Economics, University of Wisconsin Press, vol. 74(1), pages 128-145.
    5. Eduardo Cavallo & Ilan Noy, 2009. "The Economics of Natural Disasters - A Survey," Working Papers 200919, University of Hawaii at Manoa, Department of Economics.
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    7. Wang, H. Holly, 2000. "Zone-Based Group Risk Insurance," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-21, December.
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    1. New CCEP Working Papers
      by David Stern in Stochastic Trend on 2011-09-28 14:49:00

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    More about this item

    Keywords

    Environmental Economics and Policy; Financial Economics;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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