Despite the apocalyptic drumbeat from climate scientists, most Americans remain skeptical that climate change is the "most urgent threat facing our entire species," as actor Leonardo DiCaprio argues. According to a 2017 Yale poll, only 20% of Americans were "very worried" about global warming. Moreover, a Pew survey found that only 39% of Americans trust scientists "a lot" for "full and accurate information about the causes of global climate change."
This does not mean, however, that most Americans side with President Donald Trump in thinking climate change is a "hoax," that they are climate "deniers," or that they favor pulling out of the Paris Climate Accord.
Nonetheless, there is evidence that they are realists who rationally adapt to their environment as the species has for millennia. This is evidenced by beachfront real estate markets. Not surprisingly, property owners who see increased coastal flooding due to slowly rising sea levels are moving to higher ground.
A recent paper in the journal of Environmental Research Letters by three Harvard University professors tested the hypothesis "that the rate of price appreciation of single-family properties in MDC [Miami-Dade County] is positively related to and correlated with incremental measures of higher elevation." Using the value of 107,984 properties between 1971 and 2017, they found a positive relationship between price appreciation and elevation in 76% of the properties (82,068) in the sample.
A similar study by economists at the University of Colorado and Penn State found that beachfront homes in Miami exposed to rising sea levels sell at a 7% discount compared to properties with less exposure to coastal flooding. Moreover, the discount has risen significantly over the past decade. Comparing rental rates to selling prices of coastal homes, they found that the discount in selling prices "does not exist in rental rates, indicating that this discount is due to expectations of future damage, not current property quality."
Though not armed with large data sets and sophisticated regressions, Massachusetts realtors are coming to the same conclusions. According to Jim McGue, a Quincy real estate agent, the nor'easter that "happened here in March certainly underscores what a 100-year flood map is all about." Another broker, Maureen Celata from Revere, said a home that included a private beach sold for 9% less than its list price of nearly $799,000 and took 55 days to sell, which she called an "eternity."
Wine producers in California, Bordeaux, and Tuscany beware. A study by Conservation International published in the Proceedings of the National Academy of Sciences forecasts that the amount of land suitable for high-quality wine production in California may drop by 70% and in regions along the Mediterranean by as much as 85% over the next 50 years.
The silver lining is that vintners may adapt by moving their grape production north. Some predict vineyards will even move to places such as Michigan, Montana and Wyoming, noted for their severe winters.
In the future you may also see more signs on fruit saying, "Country of Origin - Canada." Canadian biologist John Pedlar sees more people in southern Ontario "trying their hand at things like peaches a little farther north from where they have been trying." This is consistent with the US Department of Agriculture's Plant Hardiness Zone Map, which shows tolerant zones moving north.
This need not mean the end of America's breadbasket, but it does mean that farmers will have to adapt. Government regulators could help by allowing more use of genetically modified crops such as drought-resistant grains and corn.
There are two messages for policy makers in these examples of human adaptation. First, property owners have little faith that government can mitigate the effects of climate change. An article in Nature Climate Change estimates that there is only a 5% chance of achieving the aim of the Paris Accord to keep "a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels."
Second, government programs aimed at making us more resilient to the threat of climate change only delay adaptation. Codes requiring building high to withstand a hurricane storm surge or requiring fire resistant roofs in the urban-wildland interface may reduce the cost of bailing out victims of nature's wrath, but they only delay the inevitable adaptation required to live with it.
Instead, we should get rid of subsidies to coastal developers and to hurricane, flood, and crop insurance.
The best thing policy makers can do is to make sure they don't distort market forces. If asset prices are allowed to reflect the risks of climate change, property owners who have the most at stake will literally move to higher ground. It is not faith in better or more government, but faith in humanity that will allow us to weather the climate change storm.
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