Will Biden’s Climate Change Plan Ease Concerns Over Coastal Flooding?
July 14th, in Wilmington, Delaware, amidst the hysteria of the coronavirus pandemic, democratic presidential candidate Joe Biden held an associated press conference. Amongst the discussions of his plans to amend the response to the economic turbulence that the coronavirus has caused for the United States over the past four months, Biden also introduced a new plan. “Here we are with an incredible opportunity, not only to build back to where we were before, but to build better, stronger, more resilient” Biden petitioned. This new portion of his plan, estimated to cost $2 trillion USD, is an effort to put a stop to climate change.
Biden’s plan to tackle climate change builds upon a lot of the basic beliefs of the Green New Deal and, similarly to the deal, tries to simultaneously tackle climate change and economic inequalities. On the Plan for Climate Change page on his campaign site, Biden lays out the five major goals that this 2 trillion dollars will look to complete. The most quantifiable of his objectives is to convert the nation's energy to 100% clean and reach zero net emissions by 2050. The remaining four ensure that Biden and his camp will hold not only the citizens of our country, but large corporations and other countries to similar standards in order to effectively promote a global effort in tackling climate change. While the details of his plan on his campaign’s website do not provide specifics about the coastal properties that are endangered by climate change, his goals surely encompass changes that, if brought to fruition, would drastically reduce risk speculation concerned with the disastrous flooding in these areas.
For those in the world of real estate, climate change is not a new problem. However, with the topic itself still being so highly debated, it is hard to reflect the risk implications of climate change within the real estate world since there is so much, at least for the general public, that is not common knowledge. Still, for one sector of the market, this may be a more pressing issue. Homeowners and brokerages settled along American coastlines, such as those in Florida, know that rising water levels and coastal flooding from climate change is a legitimate concern.
“Florida is especially vulnerable to both economic and human impacts of climate change. The state pulls in 22% of its GDP, or $1 trillion, from real estate… about 30 percent of local government tax revenue comes from property taxes… two thirds of the 22 million people live in counties that border the coast, and 10% live at elevation less than 5 feet above sea level”, Jan Childs of The Weather Channel reported. The state’s population density geographics, create a recipe for disaster. In fact, in another piece by The Weather Channel, Jesse Keenan, who specializes in urban design and climate change adaptation at Harvard University, bluntly claims that investing in these areas is unwise not because of a hypothetical risk, but rather because of a very real present risk that cannot be ignored. He believes that there is no capital gain to be realized investing in coastal counties at risk of flooding like those of Florida. “Be a renter”, he says.
In the paper Does Climate Change Affect Real Estate Prices? Only If You Believe In It, researchers Markus Baldauf, Lorenzo Garlappi, and Constantine Yannelis attempt to draw a conclusion as to whether the masses are just as apprehensive about these properties as Keenan is. The answer that they found is that it depends. “Beliefs about climate change are reflected in residential real estate prices” the paper concludes. They found that in homes where the population denied the existence of climate change, “neighborhoods sell for about seven more percent” than homes in areas where the population believes in climate change. With 67% of U.S adults saying in 2019 that the government is not doing enough to reduce the effects of global climate change, and this number rising, it is likely that these discrepancies in price as neighborhoods start to see eye to eye will start to shrink while, as more people begin to think of climate change as a pressing issue, prices themselves will continue to rise.
It is this rising majority that Biden looks to sway with the announcement of his plan to attack climate change. However, should he be elected, it will be a long time before we can see any empirical proof that his plan is beginning to fix this global problem. For that reason, I don’t see the growing speculatory risk concerning rising sea levels easing any time soon. However, it will be interesting to see if this plan put into action will do anything to ease the anxiety of investors near the coasts.
