How Will NYC Adapt to Sea Level Rise?

Citylab reports some great stuff in this blog post.  Such information plays the same role as Paul Revere did a long time ago.  Now that we know that coastal Manhattan has a problem, the efficient markets hypothesis makes some testable predictions about how asset prices will adjust. Investors will see these price signals and adjust their investment patterns. You do not need to be Einstein to predict that Manhattan's future Don Trumps will have strong incentives to identify "higher ground" on the island and to seek zoning law changes to allow them to build high rises there.  This is capitalist adaptation.  Look at this picture below, you will see that "higher ground" exists.  Self interested individuals who do not want to drown and capitalist real estate investors will figure out new types of building materials that are built on "higher ground" and even Manhattan can continue to thrive.   If it can't, then Wall Street would simply join the hedge funds on higher ground in Connecticut.  Environmentalists have to distinguish between short run transition costs and long run productivity effects of sea level rise.  In the short run, such sea level rise represents a type of Keynesian stimulus as we would have to rebuild infrastructure on the higher ground and this would create construction jobs for low skill workers.



For those who are willing to think about the economics of climate change adaptation, read my 2014 paper.