Adaptation Lessons from Hurricane Helene and Milton

Both Hurricane Helene and Hurricane Milton caused death and destruction. Given the intensity of these storms the death rate was low and this speaks to the rising resilience of our economy but millions of people experienced property losses and disruptions to their lives. Going forward, how can we accelerate the pace of climate change adaptation?

In my 2010 Climatopolis book and my 2021 Adapting to Climate Change book, I argue that as more people and firms update their subjective beliefs about local risks that they will invest more time and effort and $ to be better prepared for local horrible weather. A simple example. If nobody in Berkeley, California ever expects that the temperature will exceed 72 F degrees then nobody bothers to buy, install and operate an air conditioner. If people believe that Berkeley summers are warming, then people will be more likely to incur the costs to install this technology and when extreme heat occurs they will be ready for the punch.

Non-economists ignore this point. The anticipation of pain causes people to make investments such that the pain hurts less! That’s adaptation. Pessimists counter that “adaptation is costly”. On one level they are right, but on another level they are wrong. Capitalism solves problems we want solved. Think of your cell phone. You couldn’t buy it in 1970 or even in 1990. Capitalism creates new products that are of higher quality and a lower price. The same dynamic will play out in the adaptation sector.

Now, the new point I want to make here pertains to co-benefits.

Environmental economists often mention “co-benefits” in the context of carbon mitigation. They will point to closing a coal fired power plant and argue that if a coal fired power plant in Ohio closes that this offers multiple environmental benefits as local PM2.5 air pollution declines AND global carbon dioxide emissions decline.

My point here is that localities in vulnerable places in Florida and the American south will suffer less from future hurricanes if there are co-benefits from resilience investments.

For example, suppose that permeable roads are introduced in flood areas. Such permeable roads would both reduce flood risk and may reduce the urban heat island effect. Another example would be water catchment areas that can be used for nature and leisure. In this case, the adaptation solution offers a consistent flow of valuable services even when the weather isn’t extreme.

This is similar to a financial asset that pays a constant dividend but during horrible times it makes a large balloon $ payment to the victim.

Voters would be more likely to support paying higher taxes for such public goods improvements if the day to day quality of life benefits of the project are tangible and can be quantified by local analysts.

Recall “Chicken Little” who said that the Sky is Falling. Even voters who are not “Chicken Little” may support an initiative that beautifies the area and offers some “fat tail” risk protection. My point here is that young people who seek to make the world a better place can think about the political economy of devising adaptation solutions that offer “co-benefits”. Such a diversified stream of tangible benefits is more likely to receive voter support and a successful case could be broadly adopted in various communities facing flood and wildfire risk.

Local beauty and local amenity improvements (such as offsetting the urban heat island effect) are capitalized into home prices and voters will be more likely to support the adaptation agenda if the benefits are tangible in the short run and on a daily basis.