The effect of information about climate risk on property values

Research to Confront Climate Change Complexity: Intersectionality, Integration, and Innovative Governance

Climate impacts increasingly unfold in interlinked systems of people, nature, and infrastructure. The cascading consequences are revealing sometimes surprising connections across sectors and regions, and prospects for climate responses also depend on complex, difficult-to-understand interactions. In this commentary, we build on the innovations of the United States Fifth National Climate Assessment to suggest a framework for understanding and responding to complex climate challenges. This approach involves: (a) integration of disciplines and expertise to understand how intersectionality shapes complex climate impacts and the wide-ranging effects of climate responses, (b) collaborations among diverse knowledge holders to improve responses and better encompass intersectionality, and (c) sustained experimentation with and learning about governance approaches capable of handling the complexity of climate change. Together, these three pillars underscore that usability of climate-relevant knowledge requires transdisciplinary coordination of research and practice. We outline actionable steps for climate research to incorporate intersectionality, integration, and innovative governance, as is increasingly necessary for confronting climate complexity and sustaining equitable, ideally vibrant climate futures.

Policy and market forces delay real estate price declines on the US coast

Despite increasing risks from sea-level rise (SLR) and storms, US coastal communities continue to attract relatively high-income residents, and coastal property values continue to rise. To understand this seeming paradox and explore policy responses, we develop the Coastal Home Ownership Model (C-HOM) and analyze the long-term evolution of coastal real estate markets. C-HOM incorporates changing physical attributes of the coast, economic values of these attributes, and dynamic risks associated with storms and flooding. Resident owners, renters, and non-resident investors jointly determine coastal property values and the policy choices that influence the physical evolution of the coast. In the coupled system, we find that subsidies for coastal management, such as beach nourishment, tax advantages for high-income property owners, and stable or increasing property values outside the coastal zone all dampen the effects of SLR on coastal property values. The effects, however, are temporary and only delay precipitous declines as total inundation approaches. By removing subsidies, prices would more accurately reflect risks from SLR but also trigger more coastal gentrification, as relatively high-income owners enter the market and self-finance nourishment. Our results suggest a policy tradeoff between slowing demographic transitions in coastal communities and allowing property markets to adjust smoothly to risks from climate change.