Sea level rise is upon us. Imagine a permanent flood that displaces homes, businesses and transportation infrastructure. Think about the capital investments made in coastal cities and all of the potential these areas have for economic growth. Now imagine all of that potential sitting under two meters of salt water. It’s not a pretty picture but it could be a reality we need to face. The economic impact of sea level rise will be tremendous; it is already and will become more evident in the coming decades.
Sea Level Rise Will Cost Billions
The Intergovernmental Panel on Climate Change reports that a .5m increase in sea level could cost $150 billion in damages to U.S. coastal property. However, according to some forecasts of sea level rise, this .5m estimate could be quite conservative and economic impacts could likely be much higher with estimates of closer to 2 meters of sea level rise. And that is just in U.S. coastal communities; sea level rise is a global issue. This same .5m rise estimate will cost places like Japan, Uruguay, and Venezuela billions every year and that’s just in damages. It is also important to take into account the loss of future economic growth due to loss of land area from sea level rise.
Destruction of property will not be the only noticeable consequence of sea level rise on our economy. Sea level rise could lead to slowed economic growth through the loss of resources, technology, and institutions. Natural capital like land resources and ecosystems will be submerged by global sea level rise, eliminating the use of valuable land area and reducing GDP by endangering fish breeding zones and by extension lucrative fishing industries. We have already seen how political institutions have been threatened by sea level rise and climate change; politicians argue every day over whether or not to take sound science into consideration. This undermines the stability of political institutions and reduces the desire for investment from both Americans and foreign nations. The displacement of humans also reduces the value of human capital not to mention an increase in unemployment as businesses have to shut down or relocate.
With sea level rise and climate change comes the increased risk of coastal floods and extreme weather. Researchers at the Potsdam Institute for Climate Impact Research conclude that a conservative estimate of just 11cm of sea level rise by 2050 will cause economic losses from flooding to double in coastal regions. We have reached a critical point where the choices we make will determine economic prosperity and welfare for the next several decades and centuries to come. The Dutch, for example, have begun a crusade of coastal resilience planning. They are making massive investments in flood preparedness infrastructure to combat the impending effects of sea level rise. By choosing to use clean energy we can stabilize global temperatures and mitigate these threats.