How Will Hawaii's Beaches Cope with Climate Change?
The NY Times is worried about the future of Hawaii's beaches. Its article is based on a new academic report available here. At the end of the article, the reporter finally starts talking about the economics of adapting to this anticipated challenge of disappearing beaches. She writes;
"But the most common alternative approach, replenishing beaches with pumped-in sand, is difficult in Hawaii, where good-quality sand can cost 10 times as much as it does on the East Coast, Mr. Williams said.
Dr. Fletcher said he believes the answer lies in encouraging people to move buildings and other infrastructure away from the shoreline, a strategy coastal scientists call retreat. “If we want beaches we have to retreat from the ocean,” he said. But, he added. “It’s easy to say retreat; it’s much harder to implement it.”
OPTION #1: So, note that there is a "solution" to this problem; importing sand but it is costly. Do you doubt that some capitalist firm won't figure out some "sand substitute" to swap in that would cheaper?
OPTION #2: raises issues of property rights. Folks who own coastal real estate in Hawaii want to fight rather than surrender to the sea. Of course, they want to use tax payer $ to build a sea wall. Spending other people's $ is easy. An interesting real estate issue will arise. As we retreat from the coasts, owners of coastal real estate will suffer an asset loss. Do they have the right to be insured by the public for the loss? Are they suckers who bought property believing it would keep its value? Or were they shrewd investors who knew they were flipping a one sided coin? By this I mean the following; if climate change doesn't raise sea levels then the owners of the coastal property make $ as they own a valuable asset. If climate change does raise sea levels, and the public feels sorry for the coastal property owners, then tax payers will bail them out. In this case, the coastal property owners bear no risk from their RISKY investment. That's a bad incentive. If you buy coastal real estate, of course you are taking a gamble.
Note that the logic of Climatopolis is evident here. Even the NY Times knows that Hawaii's beaches face a challenge. This creates opportunities for entrepreneurs and the search for adaptive strategies begins . This is how we cope with climate change.