Chapter 3. Emerging approaches to coastal adaptation

3.1. The role of national governments in coastal adaptation

National governments have a crucial role to play in supporting coastal adaptation by ensuring the relevant actors have the correct incentives and tools to adapt, as well as removing potential distortions. Governments should take a proactive approach to create an enabling environment to improve the co-ordination, efficiency and effectiveness of actions implemented at lower levels. Key areas for achieving this include providing access to information, tools and guidance; ensuring that regulations and economic instruments are coherent and avoid perverse incentives; considering climate risks when taking funding decisions; and finally monitoring and evaluating effectiveness of all policy interventions and adjusting accordingly.

The following sections outline the approaches (Table 3.1) being used by national governments to address sea-level rise (SLR)1. This overview of national approaches to SLR brings together a content analysis of national adaptation plans, supplemented with other salient literature on SLR adaptation. National adaptation plans have been used because they are available for most OECD countries and the structure of these documents tends to be consistent across countries. A caveat when using this approach is that these documents are not exhaustive and some relevant initiatives may not be included. Nonetheless, they provide a useful overview of relevant activities underway.

The approaches and tools discussed within this section refer to national governments, but many could also be used by local government and communities to adapt to SLR.

3.2. Information provision

Access to credible and transparent climate projection and risk information is essential for coastal adaptation. Decisions about location, timing and design of coastal adaptation response require trustworthy information about coastal hazards, exposure and vulnerabilities. In addition, scientific information needs to be clearly communicated and understood by affected stakeholders to build a common vision and strategy for greater resilience. Given that better information will become available and new risks will become apparent over time, the analysis of climate risks needs to be an iterative process that monitors the evolution of risks and communicates these to the decision makers and stakeholders who most need this information. The role of national governments is two-fold: the provision of underlying scientific information on sea-level observations, modelling and analysis, and vulnerabilities, as well as information and tools on prevention and responses to coastal impacts (Le Cozannet et al., 2017[1]).

3.3. Incorporating sea-level rise into regulatory and economic instruments

Tackling persistent barriers to coastal adaptation may require reforms of regulation and economic instruments to help achieve a desired and effective outcome (see Chapter 2). Experience from climate change mitigation and disaster risk reduction demonstrates that information campaigns to mobilise action and the provision of information and tools to support risk management can have limited effectiveness on their own. It is essential that the relevant actors also have sufficient incentive to engage in risk reduction.

3.4. Dedicated national funding

National-level funding can remove economic barriers that may obstruct efficient adaptation by providing a predictable and sustainable channel for finance, facilitating alignment between adaptation activities and country priorities, and ensuring that financial constraints are not limiting local implementation. National government investments in coastal adaptation additionally have a clear role in promoting joint adaptation, where benefits accrue to various actors, who may be under-provisioned due to the public good attributes of adaptation (OECD, 2013[18]). Securing funding for adaptation is especially important in view of the long-term, complex and uncertain nature of climate change. National-level funding can help to overcome institutional inertia and change long-established approaches to policy development (OECD, 2015[30]).

Very few national adaptation plans have explicit references to dedicated funding for coastal adaptation measures. One exception to this is the Pan-Canadian Climate Change Framework, which includes a commitment to partner with lower levels of governments to invest in traditional and natural infrastructure that reduces risks from climate-related hazards such as coastal flooding (Government of Canada, 2016[43]). Other exceptions are Germany and the United Kingdom, which both include specific funding commitments from the national government. The United Kingdom has established a GBP 2.6 billion six-year capital investment programme (2015-21) to reduce flood and coastal risk, which the 2nd National Adaptation Programme estimates will provide over GBP 30 billion in overall economic benefits (e.g. reduced damages) and benefit 300 000 households by 2021 (Defra, 2018[44]). The UK funding system has also recently been reformed to promote cost-sharing between levels of government (see Box 2.4). In Germany, a special instrument (Sonderrahmenplan) to speed up implementation of coastal protection due to climate change risks was established in 2009, which provides an additional combined EUR 25 million for all coastal federal states annually until 2025 (EUR 550 million total) (see Chapter 4). In France, the national government provided EUR 500 million to fund flood prevention measures, particularly in coastal areas, through the National Flood Plan (plan submersions rapides) (French Government, 2017[45]).

Other countries have chosen to mainstream coastal adaptation measures into existing financial arrangements or within a broader adaptation strategy. In the Netherlands, coastal adaptation is mainstreamed due to the high priority and cross-sectoral nature of flood risk prevention and water management within the country, with financing for coastal resilience measures falling under the financial responsibility of the Delta Fund (OECD, 2013[18]). Another example is Sweden, where the national government has dedicated funding for local authorities to undertake precautionary measures in built areas with high risk of natural catastrophes.

A potential misalignment in national funding can occur if funding targets one type of adaptation measure, as this can influence and unnecessarily circumscribe the range of policy options available for local authorities. For instance, if national funding is predominantly directed towards hard defences, local governments may feel inclined to opt for seawalls as opposed to beach nourishment measures, even if this does not represent the best or only option for the coastal community. In Germany, federal and state funding predominantly goes towards the establishment and maintenance of dikes, which can “crowd out” other policy options (Hooijer et al., 2004[49]). In the United States, federal financing for prevention measures through programmes such as coastal resilience grants is directed towards hard infrastructure, meaning that nature-based solutions remain uncommon despite their potential local benefits (Colgan, Beck and Narayan, 2017[50]).

3.5. Establishing monitoring and evaluation frameworks

A comprehensive approach to coastal adaptation should include a process of monitoring and evaluation, in order to understand how to best manage climate risks and improve the effectiveness of actions taken. For coastal adaptation in particular, considerable uncertainty regarding future SLR, storm surge level, and erosion trends and their impact at the local level means that it is essential to continually monitor and regularly evaluate to ensure policy responses are still serving their desired purpose.

Most OECD countries have indicated in their adaptation plans that they plan to design and implement a monitoring and evaluation system at the national level, which includes a focus on coastal areas, but relatively few systems are currently operational (see Table 3.2). To date, adaptation monitoring and evaluation remains far more common at the project and programme level (Vallejo, 2017[51]). Monitoring is also better established than evaluation, often due to an insufficient length of time passed for evaluations to be feasible (Vallejo, 2017[51]).

National monitoring and evaluation systems can broadly serve one of two purposes: 1) promoting a learning process; or 2) focusing on accountability (Dinshaw et al., 2014[52]). France’s approach firstly aims to monitor the implementation of coastal adaptation measures, while during evaluation it emphasises a process of continual learning. A mid-term and end-term evaluation of the national adaptation plan (PNACC) allowed the government to take stock of new data regarding SLR and its impact on French coasts. Key recommendations for the elaboration of a second adaptation plan included the endorsement of nature-based solutions and proposals to spatially reshape coastal areas (French Government, 2017[9]). UK monitoring and evaluation, in contrast, is mainly focused on ensuring accountability for actions and determining which measures are most effective. The evaluation approach combines a regular statutory assessment of the overall adaptation plan based on the monitoring of a set of specific, measurable indicators, in addition to non-statutory assessments of shoreline management plans. Evaluations of the effectiveness of these measures have resulted in a change of indicators in certain cases and the adoption of a proactive rather than reactive approach to coastal management (Nicholls et al., 2013[53]).

OECD countries have taken a variety of approaches for their monitoring and evaluation systems for coastal adaptation, with no two systems being identical. Several countries (e.g. France, Germany and the United Kingdom) rely on a mix of mostly quantitative, but also qualitative indicators as a basis for evaluation. These indicators can take the form of effect-based indicators such as sea-level or storm surge levels, process-based, meaning the level of advancement of a particular measure, or outcome-based, meaning the result of a measure in coastal risk reduction. Other countries (e.g. Finland and Norway) prioritise the use of stakeholder surveys and self-assessments over indicators to offer insights on adaptation progress. The Netherlands is currently compiling a list of sea-level rise indicators for the Delta Programme, after having concluded to strike a balance between learning and accountability (Van Minnen et al., 2018[54]).

A number of challenges remain to the full implementation of monitoring and evaluation programmes at the national level. Several of these challenges relate to the nature of climate adaptation itself, which are especially salient in coastal zones. These include long time frames, uncertainty regarding impacts at the local level, difficulties in establishing baselines and targets, and the challenge of discerning causes and effects (OECD, 2015[55]). Further, coastal adaptation does not have common aggregated metrics and is often integrated into other sectoral policies rather than being an independent measure. Therefore, adaptation policy targets at different levels cannot typically be monitored with a single or distinct number of indicators or sources of information like in other policy domains such as climate change mitigation (EEA, 2015[56]). A vital factor of monitoring and evaluating progress of adaptation policies is the establishment of long-term data sets, including the implemented measures, expected effects and eventual outcomes in terms of changes in risks (Vallejo, 2017[51]). The process can also be resource-intensive, particularly regarding data and the human and technical capacities required to collect and interpret it.

3.6. Elements of effective coastal adaptation policy regimes

There is robust evidence and a compelling case for further action to address the consequences of SLR. While not all coastal risks can be avoided, well-prepared coastal communities will be better able to adjust to new conditions, at lower cost, and rapidly bounce back from disasters when they occur. Implementing change takes time, stakeholder engagement and should be guided by the latest scientific evidence and economic analysis. This creates a need for countries to put in place now the elements necessary to effectively respond to SLR.

Physically, SLR differs from existing coastal change due to uncertainty around magnitude and pace of change, as well as the long timescales involved. Both uncertainty and long timescales contribute to low-risk awareness in coastal zones: many inhabitants of flood-prone areas are not aware of new and long-term risks. In addition, the time lag between when costs are incurred to reduce risks and when benefits are realised, as well as the public good nature of adaptation investments, can prevent SLR from being internalised into decisions. As illustrated in Figure 3.1, this can lead to excessive exposure and vulnerability in coastal zones.

Figure 3.1. Challenges for coastal decision making

Note: Decisions about what to protect, and to leave, and how to protect encompass decisions between different strategies discussed in Chapter 2 (e.g. protect, accommodate, retreat).

While policy action is apparent, many of the measures currently in place are not commensurate with the challenge. The majority of efforts to date have focused on building the scientific evidence base and disseminating information. However, far fewer countries are using SLR information in regulatory frameworks, and even less have dedicated funding for coastal adaptation. A lack of consideration of SLR in national policies can lead to inefficiencies and sub-optimal outcomes. These include:

• local governments and individuals pursuing policies that are rational from a local or individual perspective but create inefficiencies overall, such as granting building permits in higher risk areas

• moral hazard as property owners and developers who gain the benefits of coastal location, while risks are transferred to others

• increased reliance on hard infrastructure due to political pressure to build coastal defences as the number and value of threatened buildings increases

• increasing costs for the general tax base, especially if risks become uninsurable.

Through the scan of current policies and four in-depth case studies, this study puts forward four principles of a policy framework for coastal adaptation that is equipped to meet the challenges described above. These principles should be taken into consideration by national governments as they further develop and implement their adaptation responses. They are:

1. 1. engage stakeholders early and substantively

2. 2. plan for the future and prevent lock-in to unsustainable pathways

3. 3. align actors’ responsibilities, resources and incentives

4. 4. explicitly consider distributional and equity implications of policies.

1. Engage stakeholders early and substantively

Policy makers should engage stakeholders in the early stages of decision making and throughout the entire decision-making process to enhance overall resilience in coastal areas, while supporting community ownership and buy-in.

While engagement is an important component of any policy change, there are specific qualities of coastal adaptation that require extra consideration. These are discussed below.:

SLR risks are complex and difficult to understand. This is in part due to cognitive barriers around understanding risk (see Box 3.1), compounded by the fact that SLR risks are relatively new, have associated uncertainty and very long timescales. In many cases, stakeholders and communities that are not presently concerned with future flood/erosion risks may be more concerned over the perceived negative impacts of proposed adaptation plans and policies themselves.

Coastal adaptation decisions can pose a significant threat to private assets. It is understandable that communities may feel threatened by some adaptation measures – homes are often the most significant material and financial possession people have.

Decisions taken at the individual, household or developer level (e.g. where to build new property) can increase overall exposure and vulnerability, as described in Figure 3.1.

Engaging all affected stakeholders in the policy-making process is needed to ensure the development of a shared vision of risks and shared understanding of an acceptable level of risk. Once this has been achieved, it is possible to discuss and manage trade-offs across stakeholders, who can be differently affected by the economic, social and environmental impacts of SLR, as well as the options to address it. Difficult decisions (e.g. limiting the approval of new properties, relocation of existing properties) should be considered, discussed and planned through a coherent, long-term approach. In addition, engagement must reinforce the roles and responsibilities for risk management and clarify the accountability and liability for damages.

The context-specific nature of SLR reinforces the need to engage stakeholders early on. There is no “one-size-fits-all” coastal adaptation strategy; instead, they need to be tailored to the local context. In view of this, stakeholders can provide decision makers with key information and knowledge of local features, such as where the impacts of SLR are felt most and which objectives should be prioritised. Doing this can improve the quality of decision outcomes and ensure that plans and projects are tailored to be regionally and culturally relevant. Through engagement, stakeholders also develop a sense of ownership over the coastal adaptation process and its outcomes. This increases the trust and confidence of stakeholders towards the approach, who will tend to regard the resulting adaptation measures as more legitimate (OECD, 2015[57]).

In 2015, the OECD undertook an extensive study to determine how engagement processes can contribute to water governance objectives. Box 3.8 lists the principles.

Real-world examples of successful, long-term engagement strategies are needed. Lessons can be drawn from the case of the Marsh Body established in Truro, Nova Scotia (see Chapter 5), as well as adaptation pathways approach used in Hawkes Bay, New Zealand (see Chapter 6).

2. Plan for the future and prevent lock-in to unsustainable pathways

Policy makers need to take a long-term approach to coastal planning that actively favours flexibility.

As highlighted in Chapter 1, climate-induced SLR will continue for thousands of years even if greenhouse gas concentrations are stabilised within the 21st century. There remains considerable uncertainty over the rate and magnitude of SLR, particularly at the local level and over long timeframes. This has significant practical consequences, as planning for a 0.5-metre sea-level rise is substantially different from planning for a 2-metre sea-level rise, in terms of the area of land likely to be affected, and the frequency and seriousness of the impacts. Uncertainties about climate impacts additionally represent a cost in themselves, as there is the risk of preparing for a future that is markedly different from the one that materialises. Preparing for the “wrong” future or implementing the “wrong” form of coastal protection has the potential to be more costly than doing nothing. Planning should therefore go well into the future, but also leave room for manoeuvre.

In particular, the uncertainties associated with SLR call for a dynamic, future-oriented approach to planning that explicitly deals with uncertainty. Adaptation planning must consider the impact of time on planning processes, recognising that as conditions and available knowledge change, adaptation options may also need to change (OECD, 2015[30]; 2013[18]). OECD (2015[30]) provides an overview of approaches to plan for uncertainty, and the general principles are to build in flexibility and identify solutions that can perform well against a range of different scenarios. The New Zealand case study provides an example of dynamic adaptive pathways planning. The pathways approach involves testing different responses against a wide range of SLR projections, which informs the development of alternate policy pathways that are robust and flexible. Within each pathway, coastal hazard risk and vulnerability assessments are used to identify vulnerabilities and thresholds of intolerable risk, to develop early signals and decision points for when to switch pathways before reaching the adaptation threshold.

The specific characteristics of SLR increases the value of robustness (the ability to perform across a range of conditions) and flexibility (the capacity to adjust with changing conditions). Policy lock-in occurs when the selection of a coastal adaptation pathway in the short term inadvertently restricts the application of alternative options in the long term. As described in Chapter 2, options such as increased protection can lead to the levee effect – a cycle of increased development in the coastal floodplain based on the perception of increased safety, which can carry the perverse impact of increasing vulnerability in the longer term. Placing value on flexibility and robustness can give preference to innovative measures to address SLR, such as nature-based solutions, which can be easily modified to the actual rate of SLR. Accommodation measures, such as changing building design, also present a more flexible approach that leaves further options available in the future.

A key element of planning is timeframes, as the cost effectiveness of different measures is highly dependent on the time and spatial scales over which it is calculated. For example, replacing a damaged coastal road with the exact same infrastructure is likely to restore business-as-usual in the short term, yet a long-term perspective could bring alternative options, such as an initially more expensive road relocation, into play.

An important aspect of long-term planning is having a vision for the coast. National governments need to communicate the overall objective and vision of coastal resilience to other levels of governments. While local governments may often want to implement measures to reduce coastal risks (such as restrictive land-use planning), in practice this can come up against a variety of governance and political economy challenges. Actions at the national level therefore need to promote a shared approach and long-term explicit commitment to manage the impacts of SLR, with co-ordinated and sustained dialogue between different levels of government.

3. Align actors’ responsibilities, resources and incentives

Policy makers need to understand and address the incentives and constraints faced by relevant actors.

As highlighted in Chapter 2, the institutional environment is a determining factor influencing actors’ behaviour in coastal risk reduction. If an actor is aware of owning or sharing a risk, but has little reward or incentive attached to managing responsibilities, it can result in increasing risk overall. For example, property developers often do not bear future costs from current development, and as a result lobby for coastal land releases (OECD, 2014[21]). In addition, political economy challenges arise from entrenched policies and institutional arrangements (e.g. property and land rights, existing public infrastructure, stakeholder expectations). Funding arrangements, and related planning and regulatory frameworks, must therefore be well-co-ordinated and designed to minimise moral hazard.

Reforms should ensure that responsibilities, capabilities and resources are also aligned. Multi-level governance challenges, both horizontal (across policy domains) and vertical (across levels of government), can hinder effective implementation. In general, local actors have the necessary local knowledge, as well as jurisdiction, to implement coastal adaptation measures. However, not all adaptation options can be implemented solely at the local level, due to funding constraints or institutional barriers. For example, in Australia, the lack of national funding and co-ordination has led to the disorganised construction of seawalls, which has spread coastal risk (Fletcher et al., 2013[58]). In the United Kingdom, a key barrier noted by local governments is the high upfront cost of adaptive responses such as realigning critical infrastructure, in comparison to stopgap measures that fit with short-term funding cycles (Brown, Naylor and Quinn, 2017[59]). A lack of co-ordinating mechanisms and higher level support can lead to inefficient outcomes overall.

Economic and regulatory instruments can be used to internalise social costs, such as risk-priced flood insurance. However, as described in the section above, there are very few examples of these instruments being implemented to address SLR, and even less empirical evidence about their effectiveness in influencing behaviour. Nevertheless, finding ways to ensure SLR risk is internalised into decisions (e.g. policy, real estate, etc.) will be essential, as this can help to break the potentially damaging feedback loop between real estate values and coastal defence investments. For example, in the United States, property values are significantly higher in areas that use continued beach nourishment (Gopalakrishnan et al., 2017[60]). In the United Kingdom, while new developments are subject to a flood risk assessment and site-specific adaptations are often required, these decisions are taken within the context of the level of protection offered current flood defence infrastructure (Brown, Naylor and Quinn, 2017[59]).

The diagnostic framework in Figure 3.2 outlines a process for identifying where incentives, responsibilities and resources may not be aligned towards risk reduction. Such a framework can help policy makers identify the key actors, understand their interests, and the factors that enable or hinder adaptation. This should be used to ensure that the scale and implications of future coastal change are acknowledged by those with responsibility for the coast and communicated to those who live on the coast.

Figure 3.2. Framework to identify actors/roles, drivers and misalignments

Source: Adapted from OECD (2014[61]), Boosting Resilience through Innovative Risk Governance, https://doi.org/10.1787/9789264209114-en.

4. Explicitly consider distributional and equity implications of policies

Policy makers must explicitly address the distributional and equity implications of policies that address coastal risks

Changes to the allocation of risks and responsibilities relating to sea-level rise will have significant distributional impacts. Some adaptation measures may result in significant costs for property owners in areas of risk. These costs can include: the requirement to allow their land to be flooded periodically (for example, the Netherlands), being prohibited to build certain protective structures on their land (various countries) and higher insurance premiums. Given these potential costs, the distributional impacts of policy reforms need to be addressed in the process of implementing reforms.

Understanding the potential socio-economic vulnerability of those exposed to SLR is needed for both public and private SLR adaptation. For government-implemented measures, the prioritisation of options can be based on a measure of economic efficiency (acknowledging that many decisions about coastal adaptation are not taken with strict cost-benefit decision rules – other factors may include local zoning by-laws, future land-use plans, the presence of development-supporting infrastructure, etc.) (Martinich et al., 2013[62]). In a strict cost-benefit analysis, land that is more valuable will be prioritised for coastal protection. This can leave socially vulnerable communities that are located in high-risk areas even more likely to remain exposed and experience disproportionally adverse consequences from SLR. For private adaptation, socially vulnerable groups may not have the resources to implement measures. This is especially salient as many people settled in areas at risk of SLR before information about future hazards was available.

An important first step for policy makers is undertaking detailed risk assessments that account for socio-economic vulnerability and associated adaptive capacity of those in the path of the hazards, as well as the hazards themselves. This can inform future policy design. In some cases, compensation schemes may be required to relieve at least some of the economic burden of being located in a high-risk area.

An example of a policy that explicitly targets potential distributional impacts is the Partnership funding model in the United Kingdom (elaborated Box 2.4), which is a cost-sharing model for flood risk management between national and other levels of government. In this funding scheme, payment rates for households in “deprived areas”5 are higher than elsewhere.

The question of whether those faced with loss (property, land and/or income) should receive public compensation brings with it legal, political and economic challenges. First, it is often hard to determine whether particular risks could have reasonably been foreseen, and whose responsibility it was to foresee them. Second, the balance between individual responsibility and social solidarity is a political choice, albeit one with implications for the incentives faced by property owners. Decisions about potential compensation should be taken on a consistent, predictable and transparent basis. It will be additionally important that the economic case to support long-term funding should be determined not only by the protection of physical assets, but should also incorporate environmental implications and social justice considerations.