The Costs of Doing Nothing: Economic Consequences of Not Adapting to Sea Level Rise in the Hampton Roads Region. Photo courtesy of VIMS

Transcription

1 The Costs of Doing Nothing: Economic Consequences of Not Adapting to Sea Level Rise in the Hampton Roads Region Photo courtesy of VIMS

2 Costs of Doing Nothing: Economic Consequences of Not Adapting to Sea Level Rise in the Hampton Roads Region RTI International, Nov If no protective efforts are made, sea level rise will substantially increase the expected cost of coastal flood damages to the region s homes in any given year from $12 million with no sea level rise to about $50 million with a sea level rise of.5 meter (by the year 2040) and over $100 million annually with a sea level rise of.75 meter (by the year 2060). Sea level rise will significantly increase the regional economic impacts of large storm events. The decline in Gross Regional Product (GRP) of the Hampton Roads economy as a result of a 100-year storm event would go from $611 million without sea level rise (in the year of the storm) to over $1 billion with sea level rise of.5 meter and over $2 billion with a sea level rise of.75 meter.

3 Why Do This Study? and policy changes at the state level /photo/1

4 What Does Virginia Coastal Policy Center Do? Provides partners and clients with science-based policy analysis Engages students in experiential, interdisciplinary coastal lawyering Creates forums for dialogue on coastal resource and community challenges Conducts research on coastal issues

5 Science-Based Policy Analysis Partners with Virginia Institute of Marine Science and NOAA s Virginia Sea Grant Program, along with a host of others Focuses student lawyering on the intersections among science, law and policy Encourages proactive policy-making

6 feet above 1992 level Relative Sea Level Rise for SE Virginia in feet above 1992 level ft ft highest high low 3 historic year Chart courtesy of Carl Hershner, VIMS

7 Virginia Sea Level Change Global sea level change centimeters in the last century Hampton Roads sea level centimeters in the last century Courtesy of Derek Loftis, VIMS; chart based on NOAA data from Sewells Point station Monthly Average Water Level, Sewell s Point, VA

8 But Flooding is Happening Today Photo courtesy of Derek Loftis, VIMS

9 Flooding is a Growing Problem From VIMS Recurrent Flooding Study for Tidewater VA, courtesy of Dr. Larry Atkinson, CCSLRI, Old Dominion University.

10 Flooding of Coast, Caused by Global Warming, Has Already Begun Scientists warnings that the rise of the sea would eventually imperil the United States coastline are no longer theoretical. By JUSTINGILLIS September 3, 2016 NORFOLK, Va. Huge vertical rulers are sprouting beside low spots in the streets here, so people can judge if the tidal floods that increasingly inundate their roads are too deep to drive through. For decades, as the global warming created by human emissions caused land ice to melt and ocean water to expand, scientists warned that the accelerating rise of the sea would eventually imperil the United States coastline. Now, those warnings are no longer theoretical: The inundation of the coast has begun. The sea has crept up to the point that a high tide and a brisk wind are all it takes to send water pouring into streets and homes. Federal scientists have documented a sharp jump in this nuisance flooding often called sunny-day flooding along both the East Coast and the Gulf Coast in recent years.

11 Sea Level Rise & Effects on the Military Sea level rise will affect coastal VA particularly: Hampton Roads region is #2 area impacted in US, after New Orleans Increasing flooding on coastal military bases Naval Station Norfolk: largest naval base in the world; projected to face 4.5 feet of sea level rise this century Source: Union of Concerned Scientists, The U.S. Military on the Front Lines of Rising Seas (2016)

12 New Commonwealth Center for Recurrent Flooding Resiliency Goal is to thrive with the water by enabling informed decisionmaking within our communities Created & funded in 2016 by VA General Assembly Partnership between VIMS, VCPC/W&M Law School, and ODU One stop shop to provide tools and information to Virginia s planners, emergency managers, citizens, businesses, and leaders including the VIMS AdaptVA Website, featuring ongoing research on sea-level changes and adaptation measures

13 y The Study /photo/1

14 Costs of Doing Nothing: Economic Consequences of Not Adapting to Sea Level Rise in the Hampton Roads Region RTI International Project Team: George Van Houtven Brooks Depro Justine Allpress Benjamin Lord Daniel Lapidus Jared Woollacott

15 Overview of the Study Main Objective: Assess the potential costs and economic impacts of not adapting to sea level rise in the Hampton Roads region Two key questions: 1. How will sea level rise affect the probability and total size of residential property damages if a business as usual approach is used? 2. How will sea level rise affect the regional economic impact of a 100 year storm? 15

16 Definition of the Study Region 16 counties/cities that comprise the Hampton Roads Planning District Commission (HRPDC) Population Jurisdiction Forecast Chesapeake City 238, ,600 Franklin City 8,535 10,800 Gloucester County 37,072 40,200 Hampton City 138, ,200 Isle of Wight County 36,438 62,800 James City County 73, ,200 Newport News City 183, ,100 Norfolk City 247, ,200 Poquoson City 12,359 12,400 Portsmouth City 96,874 98,200 Southampton County 18,551 25,500 Suffolk City 90, ,700 Surry County 6,819 8,700 Virginia Beach City 453, ,500 Williamsburg City 14,860 17,200 York County 69,466 82,700 Hampton Roads 1,725,777 2,037,000 16

17 Sea Level Risk Projections and Scenarios Core findings of the Secure Commonwealth Panel (2014) 1.5 ft by ft by 2060 We define 2 sea level rise scenarios for our analysis 0.5 meters 0.75 meters 17

18 Key Objectives for Residential Damage Analysis Estimate expected damages to residential structures in any given year under alternative sea level rise scenarios Overlay sea level and storm surge height estimates on parcel location, elevation, type, and value data Apply risk-based approach to compare expected annual damages with and without sea level rise 18

19 Flood Risk Factors for Residential Structures High Tides, Storm Surge, and Sea Level Rise Flood levels without sea level rise Flood levels with sea level rise Storm tide 2 B A Storm tide 1 Normal high tide 1 Sea level 1 Storm Surge MHHW B A Normal high tide 2 Sea level 2 Sea level 1 Storm Surge MHHW Sea Level Rise

20 Source of Normal High Tide and Storm Surge Estimates 4 main NOAA stations for the study area: MHHW Probabilities of different storm surge levels 20

21 Sewells Point Storm Surge Probabilities 21

22 Sewells Point Storm Surge Probabilities 22

23 Summary of Residential Structure Data Acquired parcel-level data from 13 counties/cities No data for Franklin, Southampton, Suffolk Data include tax assessment value and structural characteristics (e.g., number of stories, basement, single vs multi family) Overlaid structure footprint with LIDAR elevation to determine ground-level elevation Jurisdiction Value of Structures Number of Ground-Level Elevation (above NAVD88) Units a Mean Median Total Hampton Roads 13 County/City Total 444,219 $166,806 $132,558 $73,230,630,999 Less than 1.2 m 2,325 $141,597 $115,788 $329,211, m to 2.8 m 68,395 $170,136 $136,026 $11,636,425,525 Greater than 2.8 m 368,437 $166,283 $132,730 $61,264,993,634 a Excludes structures with missing or $0 reported values. 23

24 Value of Damage to Residential Structures Damage from a specific high water event is estimated with Elevation of high water level (above NAVD88) First floor elevation of the structure (above NAVD88) Ground floor elevation + height of the foundation Depth-damage relationships (Army Corps of Engineers) % damage to structure and contents as a function of water depth above first floor Total value of structure Expected damage in any given year is estimated by combining 1. damage from each possible high water event 2. probability of each possible high water event (which changes with sea level rise) 24

25 Effects of Sea Level Rise On Expected Damages to Residential Structures Annual Expected Flood Damage ($/year) No Sea Level Rise Sea Level Rise = 0.5 m Sea Level Rise = 0.75 m Chesapeake $1,140,192 $8,458,211 $21,434,528 Gloucester County $539,623 $3,727,190 $7,456,131 Hampton $1,092,171 $6,193,237 $14,610,496 Isle of Wight County $176,019 $1,012,201 $2,129,931 James City County $116,126 $482,371 $940,498 Newport News $19,014 $146,446 $375,531 Norfolk $1,185,899 $8,034,841 $19,401,040 Poquoson $3,455,446 $7,364,925 $12,173,715 Portsmouth $2,351,949 $6,986,100 $11,815,720 Surry County $80,650 $280,895 $360,951 Virginia Beach $1,667,350 $7,139,991 $14,602,494 Williamsburg $- $- $- York County $322,605 $2,512,690 $6,429,584 Hampton Roads $12,147,044 $52,339,099 $111,730,620 25

26 Key Objectives for Economic Impact Analysis Estimate how sea level rise would affect the regional economic impact of a 100-year storm Expand residential analysis to include damages to commercial and industrial structures Expand analysis to examine how damages to structures ripples through the broader economy Simplify the analysis by only looking at one type of storm event 26

27 Modeling Framework for Analyzing Economic Impacts Step 1: Estimate direct damages to physical capital stock in region as a result of flood levels from 100-year event for each sea level rise scenario Applied FEMA s HAZUS-MH coastal flooding module by Hampton Roads county/city using same 100-yr flood heights as in the residential analysis Generated estimates of damage losses to buildings, contents, and inventory for residential, commercial, and industrial structures Step 2: Estimate and add indirect impacts on the regional and state economy for each scenario Developed and applied a two-region computable general equilibrium (CGE) model - Hampton Roads and rest-of-virginia 27

28 CGE Economic Model CGE models are similar to regional input-output economic impacts models (e.g., IMPLAN) More explicit accounting of price-related impacts between markets for goods, services, capital, and labor Ripple effects of damages to capital include - Income losses to owners of capital which reduces demand for goods and services in economy - Shortage of capital increases production costs by increasing the price of using and renting building and equipment 28

29 Economic Impact Measures CGE model simulates what one-year economic output, income, and prices would be without the damaged capital stock snap shot approach does not address long term impacts on productive capacity and economy Does not model the impacts of repairing and restoring capital stock Economic changes compare conditions with and without damaged capital Changes in household income and regional product Changes in tax revenues Changes in prices 29

30 Total Income Changes in Hampton Roads in Year of Flood Income Group No Sea Level Rise Change from Reference Conditions Sea Level Rise = 0.5 Meters Sea Level Rise = 0.75 Meters Change in Annual Income ($ million per year [% of group s income]) $10K $2 (<0.1%) $3 (0.2%) $6 (0.4%) $10K $15K $1 (0.1%) $1 (0.1%) $3 (0.3%) $15K $25K $8 (0.2%) $14 (0.4%) $27 (0.8%) $25K $35K $13 (0.3%) $24 (0.6%) $47 (1.1%) $35K $50K $29 (0.4%) $54 (0.8%) $104 (1.5%) $50K $75K $63 (0.5%) $117 (1.0%) $225 (1.9%) $75K $100K $71 (0.7%) $133 (1.3%) $254 (2.5%) $100K $150K $135 (0.8%) $251 (1.5%) $481 (3.0%) $150 $291 (1.2%) $541 (2.2%) $1,031 (4.2%) All Income Classes $611 (0.8%) $1,139 (1.4%) $2,180 (2.7%) 30

31 Change in Average Household Income in Hampton Roads Scenario Average Household Income Changes ($/year per household) No Sea Level Rise $944 Sea Level Rise = 0.5 m $1,760 Difference from No Sea Level Rise $816 Sea Level Rise = 0.75 m $3,366 Difference from No Sea Level Rise $2,422 31

32 Regional and State-level Impacts on Economic Production Change from Reference Conditions No Sea Level Rise Sea Level Rise = 0.5 Meters Sea Level Rise = 0.75 Meters Real Gross Regional Product ($ million/year) Hampton Roads $611 $1,139 $2,180 Rest of Virginia $20 $38 $61 32

33 Price Impacts Change from Reference Conditions No Sea Level Rise Sea Level Rise = 0.5 Meters Sea Level Rise = 0.75 Meters Consumer Price Index Hampton Roads 0.03% 0.06% 0.10% Rest of Virginia 0.03% 0.05% 0.09% Wage Index 0.09% 0.18% 0.38% Annual Capital Services Price Index 0.20% 0.39% 0.78% 33

34 Key Findings and Caveats Damages to Residential Structures Projected sea level rise will significantly increase expected annual damages due to coastal storm surge 0.5 m scenario will increase expected damages by 4x 0.75 m scenario will increase expected damages by almost 10x Mostly conservative estimates of $ damages Uses tax assessment values rather than replacement cost Does not include storm energy/wave impacts Does not include increased storm frequency or intensity due to climate change Does not include all relevant properties Using average foundation heights for different zones misses low lying end of the distribution 34

35 Key Findings and Caveats (continued) Economic impacts of 100-year flood event Projected sea level rise will significantly increase impacts in the region 0.5 m scenario will increase losses in annual household income by 2x 0.75 m scenario will increase losses in annual household income by 3-4x Spill-over impacts to the rest-of-va economy will be relatively small Modeled impacts do not include long term recovery path effects 35

36 Questions?