Economic incentives for coastal homeowner adaptation to climate change
Tracy Kijewski‐Correa, Debra Javeline, William Kakenmaster, Angela Chesler
Abstract
Communities are already grappling with climate change’s acute effects, evidenced by the growing frequency and intensity of extreme events worldwide. Strategies to encourage adaptation to climate change are urgently needed, particularly to preempt common ineffective and maladaptive responses. The United States provides a notable case study for testing the potential for economic incentives to drive voluntary adaptation in vulnerable coastal communities where mandates through building codes have proven insufficient to limit economic losses. This paper analyzes a novel survey of 662 coastal households in the hurricane-exposed state of North Carolina. Our findings suggest that homeowners who believe adaptation measures increase the market value of their homes are more likely to have homes with these upgrades. Furthermore, they are more likely to have taken actions to upgrade their homes after purchase and to express stronger intentions to invest in future upgrades. While perceived affordability plays a role in their upgrading actions, it seems unrelated to future intentions. Uptake, or intended uptake, of climate adaptation measures by coastal homeowners is not driven by the perceived efficacy in preventing future losses, challenging a tactic commonly used in policy messaging. Instead, reducing climate-related hurricane losses requires a greater valuation of climate adaptation measures in real estate markets. The need to elevate market value over efficacy in governmental and non-governmental efforts to promote adaptation may be relevant to adaptation for other types of extreme events or in other locations globally where real estate is a prized investment with the potential for significant returns.