Sea Level Rise and Urban Adaptation

Allan Hsiao (Princeton University)
Thu, Feb 1 2024, 3:30pm - 5:00pm PST
Landau Lucas A

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Sea level rise poses an existential threat to Jakarta, which faces frequent and worsening flooding. The government has responded with a proposed sea wall. In this setting, I study how government intervention complicates long-run adaptation by creating coastal moral hazard. I quantify this force with a dynamic spatial model of urban development and flooding. I show that moral hazard generates coastal lock-in by delaying inland migration, and I evaluate policies for reducing this friction.