Title Social adaptation compared to private adaptation: sea level rise and climate change 
 Collaborators Hadi Dowlatabadi (CMU), Gary Yohe (Wesleyan)
 Keywords social adaptation, private adaptation, climate change, sea level rise, impact valuation
 Abstract

The impacts of sea level rise or coastal storms can be assessed for individuals or for society as a whole. This is an important distinction. Sometimes one person's loss is another's gain. When this happens, there can be large personal losses and gains, but from the perspective of the society as a whole, not much has changed. Consequently, when valuing impacts, we need to distinguish between the incidence of these on individuals - private costs, and on society - social costs.

When estimating the impacts of sea level rise and storms, economists interested in climate policy have often focused on the magnitude of social costs. As far as climate policy is concerned a central question is whether the society as a whole is better off paying to limit climate change or paying to adapt to its impacts. These economic analyses have grown more sophisticated and detailed over the past two decades. Along with this rising sophistication and detail, the estimates of the social costs of sea level rise and coastal storms have fallen. This is, at least in part, due to a recognition that much of the impacts are incident on individuals and not on society. However, this realization does not diminish the political challenge of management in coastal zones which continues to revolve around how impacts are distributed within the local community and between the community and higher levels of government.

When designing coastal management strategies private and social costs are in competition for power. Shorefront property owners may, for example, be politically so powerful as to have the community or higher levels of government foot the bill for measures to protect their private property from storms. Their private property is at greater risk than anyone else's, but the cost of protecting that property is thereby shared widely. This tension between the interests of different groups within a society and the society as a whole can be evident in both long-term and short-term coastal management decisions. For example, we use insurance to distribute the risks due to floods in the coastal zone, but the premia assessed for different households can often lead to inland households subsidizing shorefront structures. This issue grows even more pronounced in the wake a storm when uninsured homeowners are regularly supported with disaster relief. There is no judgment in these observations. The reader is simply reminded that part of being a civil society is to be socially generous. Nevertheless, in some cases, such generosity may lead to perverse outcomes along several dimensions: distributive, i.e., poorer inland households subsidizing the insurance of shorefront mansions; or mal-adaptive, i.e., if shorefront insurance rates truly reflected the relative risks of living there, there would be fewer people living in harms way. A critical aspect of good public policy is to limit such perversity in comparison to the benefits of being part of a civil society.

Economists have traditionally focussed on capturing the social costs of feared outcomes and preventive policies. Actual policy is, at least partially, in response to private costs of such incomes and policies. We are exploring the relative importance of these two factors and developing new approaches in impact assessment more capable of reflecting the political economic pressures shaping public policy.