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Evaluating the Economic Cost of Coastal Flooding

Author

Listed:
  • Klaus Desmet
  • Robert E. Kopp
  • Scott A. Kulp
  • Dávid Krisztián Nagy
  • Michael Oppenheimer
  • Esteban Rossi-Hansberg
  • Benjamin H. Strauss

Abstract

Sea level rise will cause spatial shifts in economic activity over the next 200 years. Using a spatially disaggregated, dynamic model of the world economy, this paper estimates the consequences of probabilistic projections of local sea level changes. Under an intermediate scenario of greenhouse gas emissions, permanent flooding is projected to reduce global real GDP by 0.19 percent in present value terms. By the year 2200, a projected 1.46 percent of the population will be displaced. Losses in coastal localities are much larger. When ignoring the dynamic response of investment and migration, the loss in real GDP in 2200 increases from 0.11 percent to 4.5 percent.

Suggested Citation

  • Klaus Desmet & Robert E. Kopp & Scott A. Kulp & Dávid Krisztián Nagy & Michael Oppenheimer & Esteban Rossi-Hansberg & Benjamin H. Strauss, 2021. "Evaluating the Economic Cost of Coastal Flooding," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(2), pages 444-486, April.
    • Handle: RePEc:aea:aejmac:v:13:y:2021:i:2:p:444-86
    DOI: 10.1257/mac.20180366
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    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F01 - International Economics - - General - - - Global Outlook
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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