$60 Trillion Dollars in Damage Revisited
Read this new entry about the $60 Trillion dollars of damage expected to be caused by the melting Arctic.
“And what of Miami? It contributed $263 billion to gross domestic product in 2010, according to the Bureau of Economic Advisors. Caught between rising seas to the east and the Everglades to the west, the city is doomed to drown.
Abandoning Miami means not only moving or abandoning the businesses who create its gross domestic product, but walking away from its pricey real estate, its roads, hospitals, schools and infrastructure. The cost of relocating its people needs to be calculated both in dollars and in heartbreak. But if you ask people to estimate the cost of abandoning Miami, you get blank stares. It’s as if the language to ask the question hasn’t been invented yet.”
This is bad economic logic. Miami’a stock of buildings and highways won’t last forever. They have a lifespan of 60 years. If we anticipate that they will be submerged then we won’t invest in maintaining them. Investment will move from Miami to higher ground and this will stimulate new construction in safer places. This is adaptation at work. To a Keynesian, the anticipation that some of our cities will be submerged will help to stimulate our economy! After all, WW II’s military damage led to a massive rebuilding effort.
Matthew E. Kahn is a Professor at the UCLA Institute of the Environment, the Department of Economics, and the Department of Public Policy. He is a research associate at t…READ more