The threat that climate change poses to the tourism industry threatens to collapse the economies of several island nations around the world. Those countries that are most dependent on tourist dollars to sustain their economies also have tourist industries that are highly vulnerable to climate change and its impacts. In 2017 there were 20 countries for which tourism contributed more than 25 percent of GDP, the overwhelming majority of which are small island developing states. Climate impacts such as extreme heat, sea level rise, extreme storms and ecosystem destruction, pose a severe risk to the sustainability of these industries.
For island nations such as the Maldives, Seychelles, Antigua and Barbuda and the Bahamas, the tourist industry contributed 76.6%, 65.3%, 51.8% and 47.8% of GDP respectively. The level of dependence on tourism for such countries makes them highly vulnerable to climate risks that threaten the industry. However, they are also highly exposed to just those risks.
The most significant driver of tourism for small island states are their coastlines. Tourists are drawn to the magnificent sandy beaches and marine ecosystems. However, sea level rise, ocean warming, and coastal erosion is likely to damage or destroy these assets entirely. Recent studies indicate that the world’s coral reef ecosystems could be gone by 2050 and a sea level rise of 1 m would submerge almost all of the world’s beaches. This is far from unlikely, a 2017 NOAA report offered the scenarios shown below, with sea level rise ranging from 0.3 m to 2.5 m by 2100.
Such a rise would be devastating for coastal economies. The map below shows coastal areas in blue that would be submerged should sea levels rise by 1m.
The extent to which it is possible for vulnerable nations to diversify their economies will determine, to some extent, how resilient they are able to become in the face of climate change. However, climate change poses an existential threat for many island nations. For instance, at current rates, sea levels could be high enough to make many island atolls uninhabitable by the end of the century.
Coastal communities around the world are struggling to adapt to rising sea levels and increasingly severe coastal storms. In the United States, local governments are making investments to reduce those risks, such as protecting shorelines with seawalls, “nourishing” eroded beaches by adding sand and rerouting or redesigning roads and bridges.
In the short run, spending public money this way is economically rational. But in the long run, many people who live near coastlines will probably have to relocate as seas continue to rise.
We have studied this problem by combining insights from our work in economics, coastal geomorphology and engineering. As we have explained elsewhere, short-term actions to adapt to coastal flooding can actually increase risks to lives and property. By raising the value of coastal properties, these steps encourage people to stay in place and delay decisions about more drastic solutions, such as moving inland.
As we see it, market forces and public risk reduction policies interact in unexpected ways, reducing incentives for communities to make long-term plans for retreating from the shore. Nourishing beaches and building seawalls signal to individuals and businesses that their risks are lower. This makes them more likely to build long-lasting structures in risky areas and renovate and maintain existing structures. As a result, their property values increase, which reinforces economic and political arguments for more risk-reduction engineering.
To illustrate this pattern, we compared a sample of houses in Nags Head and Kitty Hawk, North Carolina, two popular beach towns less than 10 miles apart on North Carolina’s Outer Banks. When we consulted county tax appraisal values, Nags Head beaches had routinely received sand from beach nourishment, whereas Kitty Hawk beaches had not. On average, homes in our Nags Head sample were worth over US$1 million, while homes in the Kitty Hawk sample were worth about $200,000.
Other researchers have found that in some locations, the threat of rising seas is eroding coastal property values. But this tends to be true for properties that are viewed as highly vulnerable – for example, homes that have already flooded. In contrast, homes that are elevated or have other flood-proofing features tend to have much higher values, so they are perceived as assets.
Subsidizing risky choices
Some amount of risk reduction makes sense. If people who benefited paid its full cost, and everyone involved understood how imminent the risk was and how much engineering solutions would cost, then market forces would likely produce reasonably efficient solutions.
As an example, flood-prone Norfolk, Virginia recently adopted an ordinance requiring almost all new homes and many major renovations to be elevated and include other flood-proofing features. This approach will help to price flood protection into the cost of homes and will tend to reduce demands to directly subsidize protective engineering, flood insurance and post-disaster assistance.
In our view, such solutions are a move in the right direction. But they will not break the positive feedback loop we describe as long as other public policies continue to skew perceptions of the long-term viability of coastal communities.
Information and uncertainty are larger problems. Many coastal residents do not perceive medium- and long-term climate risk to be as serious as the scientific consensus suggests. Moreover, scientists are still analyzing how fast sea levels are likely to rise. Future storm frequency is uncertain, and could be affected by changes in global greenhouse gas emission trends.
On the positive side, engineering innovations such as designing storm-resistant homes could become more effective. But existing approaches like beach nourishment are likely to become more expensive as sand resources diminish and more communities compete for them. And growing uncertainty is likely to increase near-term demand for risk reduction engineering.
The most critical time for adaptation decisions is immediately after a storm or flood. Faced with expensive repairs or rebuilding, property owners face higher costs to return to the status quo. But if homeowners expect that public resources will be spent to protect them against future disasters, they are less likely to consider making big changes.
Federal or state financial rebuilding assistance creates a similar bias. If that money were used to subsidize relocation or other drastic adaptive actions, rebuilding patterns would be different. So far, however, programs for buying out flood-damaged properties have been largely unsuccessful. Many factors, including residents’ level of experience with disaster recovery and financial concerns, can make people unwilling to consider relocating.
Incentives to think long-term
There is no perfect formula for balancing near-term climate-proofing against more drastic steps to move people away from the coasts. But we believe that when communities focus excessively on reducing near-term threats, they risk inhibiting the successful adaptation that they are trying to promote.
We have three suggestions for breaking this cycle. First, local land use policies could be designed to discourage rebuilding homes to similar or higher property values after damage from storms. Second, communities could put increasing emphasis on adaptive engineering and large-scale planning practices – for example, sunsetting beach nourishment projects when sea level rise reaches some preannounced level.
Finally, adaptation decisions could be planned and implemented at a multi-jurisdictional level, rather than town by town. This approach would help to avoid “rich towns get richer” dynamics that can develop when wealthier jurisdictions deploy sand resources and other protective measures in a way that reduces their own risk while ignoring or heightening threats to nearby locations.
Change is coming to coasts around the world. We believe that broader understanding of how markets and public policy interact is essential to minimize the social and economic costs of this change.
As was reported this week, satellites monitoring Antarctica indicated that roughly 200 billion tonnes of its ice are melting each year. The massive ice loss is accelerating sea level rise by about 0.6 millimetres per year – three times more than measured during the last assessment in 2012.
Overall, since 1992 the continent has lost 3 trillion tonnes of ice, enough to raise global seas by 8 millimetres. The researchers responsible for this new assessment say it is “too warm for Antarctica today. It’s about half a degree Celsius warmer than the continent can withstand and it’s melting about five metres of ice from its base each year, and that’s what’s triggering the sea-level contribution that we’re seeing.”
For low-lying coastal communities and cities, this rapid acceleration of sea level rise is troubling news as it is a harsh reminder of how little time there is to prepare for such a daunting challenge. The impacts of sea level rise are manifold, it can lead to coastal erosion, makes storms more dangerous because storm surges lead to flooding more quickly, king tides can flood communities, and for low lying island states it could even mean the loss of their land.
Meaningful and large-scale climate change mitigation could help avoid worst case scenarios. But, with the uncertainty surrounding such actions and the scale at which we could see it implemented in the next years, building resilience to the impacts of sea level rise will be paramount, or rather is already.