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Climate Change Adaptation: Lessons from Urban Economics

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  • Matthew E. Kahn
Abstract
In an urbanizing world economy featuring thousands of cities, households and firms have strong incentives to make locational investments and self protection choices to reduce their exposure to new climate change induced risks. This pursuit of self interest reduces the costs imposed by climate change. This paper develops a dynamic compensating differentials model to explore how the “menu” offered by a system of cities insures us against emerging risks. Insights from urban economics offer a series of testable hypotheses concerning the economic incidence of spatially tied climate change risk.

Suggested Citation

  • Matthew E. Kahn, 2014. "Climate Change Adaptation: Lessons from Urban Economics," NBER Working Papers 20716, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:20716
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Sources of Comparative Advantage
      by Matthew Kahn in Environmental and Urban Economics on 2014-12-31 07:26:00
    2. How Will NYC Adapt to Sea Level Rise?
      by Matthew Kahn in Environmental and Urban Economics on 2015-02-21 21:14:00
    3. Adaptation to India's Heat
      by Matthew Kahn in Environmental and Urban Economics on 2015-06-01 03:31:00
    4. Catastrophic Climate Change? Lessons from Urban Economics
      by Matthew Kahn in Environmental and Urban Economics on 2015-07-31 03:02:00
    5. A New Book on the Risks Caused by Climate Change
      by Matthew Kahn in Environmental and Urban Economics on 2015-08-30 02:26:00
    6. Can We Adapt to a Worst Case Scenario? Or Will Don Trump Continue to live in NYC in the Year 2400?
      by Matthew Kahn in Environmental and Urban Economics on 2015-09-12 03:51:00
    7. How Does Nature Adapt to Climate Change? A Field Experiment
      by Matthew Kahn in Environmental and Urban Economics on 2015-09-01 21:16:00
    8. Three Years After Hurricane Sandy: How is the NYC Metro Area Adapting?
      by Matthew Kahn in Environmental and Urban Economics on 2015-10-28 20:09:00
    9. What is New in Climate Change Economics?
      by Matthew Kahn in Environmental and Urban Economics on 2015-10-11 23:41:00
    10. Climate Change and Economic Growth
      by Matthew Kahn in Environmental and Urban Economics on 2015-12-02 22:05:00
    11. Comments on the Art of Predicting "Assets at Risk" in the Year 2100
      by Matthew Kahn in Environmental and Urban Economics on 2016-04-10 20:01:00
    12. Should Economists Be Making Bold Predictions Out to the Year 2100?
      by Matthew Kahn in Environmental and Urban Economics on 2016-04-05 18:06:00
    13. Why the Clinton Campaign Won't Speak About Carbon Taxes
      by Matthew Kahn in Environmental and Urban Economics on 2016-07-20 20:44:00
    14. Urban Economic Growth Causes Climate Change Adaptation
      by Matthew Kahn in Environmental and Urban Economics on 2016-08-08 21:26:00
    15. Climatopolis on the Radio
      by Matthew Kahn in Environmental and Urban Economics on 2016-12-24 21:04:00
    16. How Will Boston Adapt to Climate Change Risk?
      by Matthew Kahn in Environmental and Urban Economics on 2016-12-20 04:40:00
    17. Will Pollution Increase During Mr. Trump's Presidency?
      by Matthew Kahn in Environmental and Urban Economics on 2017-02-06 21:40:00
    18. Summer School 2017 in Paris
      by Matthew Kahn in Environmental and Urban Economics on 2017-06-21 19:18:00
    19. No Mention of General Equilibrium Effects in The Economist Magazine!
      by Matthew Kahn in Environmental and Urban Economics on 2017-07-13 23:43:00
    20. Forecasting and Adapting to Climate Change Fire Risk
      by Matthew Kahn in Environmental and Urban Economics on 2015-09-09 18:18:00
    21. Calm and Sensible Climate Adaptation Discussion in the NY Times
      by Matthew Kahn in Environmental and Urban Economics on 2015-11-04 20:49:00
    22. Adapting to St. Louis Flood Risk
      by Matthew Kahn in Environmental and Urban Economics on 2016-01-01 22:15:00
    23. The New Economics of Coastal City Adaptation to Climate Change
      by Matthew Kahn in Environmental and Urban Economics on 2016-01-21 03:56:00
    24. Marty Weitzman on Climate Change Economics
      by Matthew Kahn in Environmental and Urban Economics on 2016-02-13 09:52:00
    25. Nick Stern's Recent Science Piece on the Social Cost of Carbon
      by Matthew Kahn in Environmental and Urban Economics on 2016-02-26 03:45:00
    26. American Weather: Household Demand and Mother Nature's Changing "Supply"
      by Matthew Kahn in Environmental and Urban Economics on 2016-04-22 02:13:00
    27. Partisan Climate Politics Continues
      by Matthew Kahn in Environmental and Urban Economics on 2016-05-28 00:51:00
    28. Creatures Adapt to Climate Change by Migrating
      by Matthew Kahn in Environmental and Urban Economics on 2016-06-15 20:42:00
    29. Singapore Offers a Preview of Our Future Adaptation to the Heat
      by Matthew Kahn in Environmental and Urban Economics on 2016-06-09 20:59:00
    30. Can NYC Handle the Heat?
      by Matthew Kahn in Environmental and Urban Economics on 2016-07-29 20:02:00
    31. President-Elect Trump Will Address the Climate Change Adaptation Challenge
      by Matthew Kahn in Environmental and Urban Economics on 2016-11-10 09:52:00
    32. Some Comments on Nordhaus (2016)
      by Matthew Kahn in Environmental and Urban Economics on 2017-01-31 20:51:00
    33. How Do Environmental Economists Know that the Social Cost of Carbon is $42 a Ton?
      by Matthew Kahn in Environmental and Urban Economics on 2017-02-19 23:43:00
    34. Will Pollution Increase During Mr. Trump's Presidency?
      by Matthew Kahn in Environmental and Urban Economics on 2017-02-06 21:40:00
    35. Should Hollywood Make More Movies About Climate Change?
      by Matthew Kahn in Environmental and Urban Economics on 2017-04-29 09:01:00
    36. A Quick Economic Evaluation of Jim Hansen's Predictions About Our Urban Future
      by Matthew Kahn in Environmental and Urban Economics on 2017-07-15 18:34:00
    37. Sane Discussion of Disaster Adaptation in the NY Times
      by Matthew Kahn in Environmental and Urban Economics on 2017-09-30 22:55:00

    Citations

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    Cited by:

    1. Amine Ouazad, 2020. "Coastal Flood Risk in the Mortgage Market: Storm Surge Models' Predictions vs. Flood Insurance Maps," Papers 2006.02977, arXiv.org, revised Jun 2020.
    2. Douglas S. Noonan & Xian Liu, 2019. "Heading for the Hills? Effects of Community Flood Management on Local Adaptation to Flood Risks," Southern Economic Journal, John Wiley & Sons, vol. 86(2), pages 800-822, October.
    3. Peter Jacobsen & Louis Rouanet, 2022. "Economists versus engineers: Two approaches to environmental problems," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(3), pages 359-381, September.
    4. Ariel Ortiz-Bobea, 2021. "Climate, Agriculture and Food," Papers 2105.12044, arXiv.org.
    5. Justin Tyndall, 2023. "Sea Level Rise and Home Prices: Evidence from Long Island," The Journal of Real Estate Finance and Economics, Springer, vol. 67(4), pages 579-605, November.
    6. Bo Feng & Mark Partridge & Mark Rembert, 2018. "The Perils of Modelling How Migration Responds to Climate Change," Advances in Spatial Science, in: Roger R. Stough & Karima Kourtit & Peter Nijkamp & Uwe Blien (ed.), Modelling Aging and Migration Effects on Spatial Labor Markets, chapter 0, pages 53-75, Springer.
    7. Eakin, Hallie & Keele, Svenja & Lueck, Vanessa, 2022. "Uncomfortable knowledge: Mechanisms of urban development in adaptation governance," World Development, Elsevier, vol. 159(C).
    8. Mark C. Freeman & Ben Groom & Richard Zeckhauser, 2015. "Better Predictions, Better Allocations: Scientific Advances and Adaptation to Climate Change," NBER Working Papers 21463, National Bureau of Economic Research, Inc.
    9. Matthew E. Kahn, 2015. "A Review of The Age of Sustainable Development by Jeffrey Sachs," Journal of Economic Literature, American Economic Association, vol. 53(3), pages 654-666, September.
    10. Noonan, Douglas S. & Sadiq, Abdul-Akeem, 2019. "Community-scale Flood Risk Management: Effects of a Voluntary National Program on Migration and Development," Ecological Economics, Elsevier, vol. 157(C), pages 92-99.
    11. Dan S. Rickman & Hongbo Wang, 2020. "Whither the American west economy? Natural amenities, mineral resources and nonmetropolitan county growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 673-701, December.
    12. Mark D. Partridge & Bo Feng & Mark Rembert, 2017. "Improving Climate-Change Modeling of US Migration," American Economic Review, American Economic Association, vol. 107(5), pages 451-455, May.
    13. Mbeva, Kennedy Liti & Pauw, Pieter, 2016. "Self-differentiation of countries’ responsibilities: addressing climate change through intended nationally determined contributions," IDOS Discussion Papers 4/2016, German Institute of Development and Sustainability (IDOS).

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    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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