THE EFFECT OF STOCHASTIC STORMS ON OPTIMAL BEACH MANAGEMENT

Sathya Gopalakrishnan, Dylan McNamara, Martin D. Smith and A. Brad Murray

No 271515, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: Adaptation to climate change is a serious concern for coastal communities because rapidly eroding beaches and storms threaten both oceanfront property and coastal infrastructure. As the climate changes, coastal environments are likely to experience accelerated sea level rise and more frequent, intense storms increasing the need for policy intervention to protect coastal development. The effects of climate change vary across regions, and physical scientists are still grappling with the relative impacts of sea level rise and increased storm risks on shoreline dynamics. Furthermore, as communities respond through active shoreline stabilization driven by economic factors, economics become coupled with shoreline dynamics. In this paper we model beach nourishment in a stochastic dynamic framework to incorporate the effect of discrete storm events in optimal nourishment decisions. We find that the expectation of increased storm risk due to climate change is likely to intensify feedbacks in the human-natural system, increasing nourishment frequency and decreasing coastal property values in the long run. We also find that optimal nourishment response is more sensitive to changes in storm probability than to changing sea level rise. While scientists and policy makers are primarily concerned with sea level rise, our findings suggest that storm risks could be a greater concern.

Keywords: Agricultural and Food Policy; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 18
Date: 2012-08-12
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:271515

DOI: 10.22004/ag.econ.271515

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