Working Paper: NBER ID: w24918
Authors: Klaus Desmet; Robert E. Kopp; Scott A. Kulp; Dvid Krisztin Nagy; Michael Oppenheimer; Esteban Rossi-Hansberg; Benjamin H. Strauss
Abstract: Sea-level rise and ensuing permanent coastal inundation will cause spatial shifts in population and economic activity over the next 200 years. Using a highly spatially disaggregated, dynamic model of the world economy that accounts for the dynamics of migration, trade, and innovation, this paper estimates the consequences of probabilistic projections of local sea-level changes under different emissions scenarios. Under an intermediate greenhouse gas concentration trajectory, permanent flooding is projected to reduce global real GDP by an average of 0.19% in present value terms, with welfare declining by 0.24% as people move to places with less attractive amenities. By the year 2200 a projected 1.46% of world population will be displaced. Losses in many coastal localities are more than an order of magnitude larger, with some low-lying urban areas particularly hard hit. When ignoring the dynamic economic adaptation of investment and migration to flooding, the loss in real GDP in 2200 increases from 0.11% to 4.5%. This shows the importance of including dynamic adaptation in future loss models.
Keywords: Sea-level rise; Coastal flooding; Economic adaptation; Dynamic model; Welfare loss; Population displacement
JEL Codes: F18; F22; F43; Q51; Q54; Q56; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| permanent flooding (Q25) | reduce global real GDP (F69) |
| permanent flooding (Q25) | decline in welfare (I38) |
| dynamic economic adaptation (O00) | reduce loss in real GDP (F69) |
| ignoring dynamic economic adaptation (E00) | increase loss in real GDP (F69) |
| immobility in face of rising oceans (J61) | expected real GDP loss (F69) |
| migration (F22) | displacement of population (J11) |