"Zurich doesn’t want to pool with Jakarta"
In addition to his Just Two Things blog, futurist Andrew Curry also writes at The Next Wave on “futures, trends, emerging issues and scenarios.” In this post which cites investment writer Joachim Klement, Curry talks about sea level rise, with 1.5m being the tipping point. This"sounds fine in theory since the base case IPCC projections are for around a one metre increase by 2100," but that “doesn’t allow for subsidence (often caused by water extraction), or the possibility of cascading climate change.”
The interesting bit for me, though, was the section he entitles “moral hazards” which relate to insurance and government intervention. Basically, the stronger you make coastal defences, the more likely people are to live there.
Hsiao has also done more specific work on Jakarta, which experiences frequent flooding. There are some interesting conclusions here, broadly that a strong government commitment to sea defences (in Jakarta’s case a sea wall) creates a moral hazard, because it
attracts coastal residents, slows inland migration, and lowers the incentives for inland development. The consequence is continued spending on coastal defense and large damages should it fail.
Insurance doesn’t work because places that don’t flood don’t want to pool with places that do (“Zurich doesn’t want to pool with Jakarta”). Alternatives that might place more of the financial burden on people who choose to live in coastal areas might work, but is open to political lobbying. And once you’ve decided to go with sea defences, and people decide to live behind them, you face political pressure to keep on strengthening the sea defences.
Source: The Next Wave