Chapter 3. Emerging approaches to coastal adaptation

This chapter examines what national governments can do to ensure all relevant stakeholders have the right incentives and tools to adapt to rising coastal risks. It analyses current practices with regard to adaptation to sea-level rise in OECD countries by reviewing national adaptation plans. Finally, it examines what institutional features need to be in place for an efficient, effective and equitable response to coastal risks, drawing on the review of existing practices and the country case study chapters of this report.

This chapter was written by Lisa Danielson and Aurélien Seawert, OECD, and Alexander Bisaro, Global Climate Forum.

    

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.

Table 3.1. Approach to sea-level rise management mentioned in adaptation plans

Policy lever

Information provision

Regulatory/economic instruments

Dedicated national funding

Monitoring and evaluation

Description

e.g. climate modelling, impact, vulnerability, and/or risk assessments, guidance and tools for other levels of government, business and citizens

e.g. land-use planning, building regulations, coastal protection infrastructure standards, economic incentives for risk reduction

e.g. funding of investment in risk reduction; funding for household-level protection measures

e.g. stakeholder surveys, quantitative and qualitative indicators measuring climate effects, policy process and policy outcome

Australia

-

-

Belgium

-

-

Canada

Chile

-

-

Denmark

-

-

Estonia

-

Finland

-

France

Germany

Greece

-

-

-

Iceland*

-

-

-

-

Ireland

-

Israel

-

-

-

Italy

-

-

-

Japan

-

Korea

-

Latvia

-

-

-

Mexico

-

Netherlands

New Zealand**

-

-

-

Norway

-

-

Poland

-

Portugal

-

-

Slovenia

-

-

-

Spain

-

Sweden

Turkey

-

-

-

United Kingdom

United States*

-

-

-

Notes:

Policy instrument referred to in adaptation plans.

- Not available.

* No adaptation plan in place.

** Adaptation plan in development.

Source: For a full list of adaptation plans, please refer to Annex A.

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]).

3.2.1. Climate projections and risk information

The International Panel on Climate Change (IPCC) provides authoritative information about future global sea levels, as it gathers evidence from a range of global climate models (Hinkel et al., 2015[2]). The IPCC updated its scenarios of global mean sea-level rise with the release of its Fifth Assessment Report (AR5) in 2013. Most OECD countries have either produced their own national-level sea-level projections or have statistically downscaled projections from IPCC modelling to understand how sea-level rise will affect them (Vallejo and Mullan, 2017[3]). Even with the best possible information, sea-level rise is among the most uncertain of climate change impacts, both in terms of the timing and magnitude of hazards at the regional level (discussed in more depth in Chapter 1). Given these uncertainties, robust adaptation requires sophisticated decision-making processes that proactively plan for different scenarios of sea-level rise impacts (see Box 3.3 for more detail and an example).

Combining sea-level projections with existing coastal flood and erosion hazard assessments, such as flood risk maps, is an emerging practice in OECD countries; however, this is not yet widely established. A 2016 OECD survey found that all surveyed countries2 had flood maps in place; however, these existing flood maps do not always incorporate future climate change risk (OECD, 2016[4]). For example, in the United States, modelling work incorporating spatially comprehensive flood hazard information finds that national flood maps may underestimate flood exposure by a factor of three3 (Wing et al., 2018[5]). Some countries are investing in maps that incorporate future SLR hazards. For example, under the Irish Coastal Protection Strategy Study, the Office of Public Works has prepared strategic coastal flood hazard maps for the national coastline representing two future scenarios (mid-range and high-end) up to the year 2100, which take into account both future sea-level rise and glacial isostatic adjustment.

Very few adaptation plans quantify exposure and vulnerability to SLR, with many references to levels of uncertainty surrounding predictions. Although flood and erosion hazard assessments are necessary for effective coastal risk management, they are not sufficient for assessing investment in coastal risk reduction. Information on the exposure and vulnerabilities of communities, including the socio-economic-ecological context, is also needed. This information is essential for informed policy decisions as well as the prioritisation of different actions (OECD, 2017[6]).

Some national governments have assessed nationwide SLR vulnerability. The UK plan specifically details that “about 270 residential and 470 non-residential properties may be lost to coastal erosion by 2030” (DEFRA, 2013[7]). The Australian plan estimates that under a high-end scenario, the equivalent of AUD 226 billion worth of industrial, public and residential properties could be exposed to flood and erosion hazard by 2100 (Department of Climate Change and Energy Efficiency, 2011[8]). France specifies that a one-metre sea-level rise would directly affect the equivalent of around EUR 2 billion worth of national main roads by 2100 (French Government, 2017[9]). In New Zealand, the Parliamentary Commissioner for the Environment commissioned a study of exposed residents and buildings to SLR. The study estimated that SLR of up to 3 metres would affect over 280 000 people and damage buildings with a replacement cost exceeding NZD 50 billion (Bell, Paulik and Wadwha, 2015[10]). In Canada, the qualitative assessment “Canada’s marine coasts in a changing climate” assesses climate change sensitivity, risks and adaptation along Canada's coasts.

3.2.2. Communicating climate risk information

Stakeholders’ use of climate risk information in decision making depends on the effective communication of sea-level projections combined with the associated risk assessments that incorporates exposure and vulnerability data. In recent years, the production of such climate risk information has improved significantly; however, the use of information by decision makers and policy implementers (e.g. local governments, property developers and households) is largely dependent on the way that this is presented. The challenge is to present climate risk information in a way that is relevant, credible, accessible and easy to understand, with the aim of it being well received by users (EEA, 2015[11]).

Local governments are challenged when faced with multiple conflicting sources of climate information; it is therefore considered a best practice to have a central, authoritative source of information with which to work. One of the main obstacles to effective coastal adaptation is asymmetric access to information on current and future risks. Some of the most detailed and accurate risk information is held by insurance companies, scientific organisations and modelling groups, but is often not sufficiently diffused to cities, businesses, individuals and community groups (Climate-KIC, 2017[12]).

Many OECD countries have created specific organisations or platforms to act as knowledge brokers on adaptation. For example, in Korea, the Adaptation Centre for Climate Change supports central and local governments to develop adaptation measures to climate change and provide guidelines for policy issues associated with climate change adaptation, having assisted Seoul and Incheon in creating adaptation plans that focus on SLR in particular. The government of Canada is in the process of establishing a Canadian Centre for Climate Services which will deliver climate information, data and tools through an online climate information portal. In the United States, the National Oceanic and Atmospheric Administration’s SLR viewer web-mapping tool is designed to support community decision making around infrastructure plans and consider performance and reliability for local relative SLR up to the year 2100 (Le Cozannet et al., 2017[1]). The Irish Climate Information Platform (Climate Ireland) includes a section on coastal flooding and managing SLR impacts. The French adaptation platform (Wiklimat), makes explicit links with the national strategy for integrated coastal management as well as with disaster risk-reduction information from the Observatoire National des Risques Naturels. The European Commission has also developed a web-based platform, Climate-ADAPT, that has a specific coastal focus.

Box 3.1. The cognitive barriers to risk perception and the importance for risk communication

One major barrier to coastal adaptation is low risk perception at the individual level, which has cascading effects. If individuals are not aware of risk, they will continue to take risky decisions, such as purchasing property in high-risk areas or not investing in disaster preparedness. In addition, local concerns usually drive local government action. If coastal adaptation is not perceived as a priority, it is unlikely that individual local governments will make significant shifts towards disruptive or unpopular adaptation strategies. Without a good understanding of sea-level rise (SLR) risks, it is also likely that individuals will oppose adaptation strategies that conflict with their private interests. A large body of social science research concludes that individuals can be poor evaluators of risks. Reasons include:

  • Individuals often use heuristics, or rules of thumb, to take decisions about risk. For example, individuals may overreact to recent events, be overly optimistic or pare down future probabilities.

  • When individuals receive information that is not in line with their underlying values, they generally have trouble updating their beliefs.

  • Individuals’ trust and ownership of new information is strongly correlated with their evaluation of whether the person communicating that information is trustworthy and knowledgeable.

Given these factors, it can be challenging to communicate SLR risks in a way that effectively convinces individuals to integrate these risks in private decisions and adopt risk-reduction behaviour. SLR risk communication efforts should take into account how people process risk information. For example, individuals may be more likely to accept SLR information when it is presented by someone whose values they share, and when it fits into their existing narratives.

Sources: Colgan, C.S. (2016[13]), “The economics of adaptation to climate change in coasts and oceans: Literature review, policy implications and research agenda”, http://dx.doi.org/10.15351/2373-8456.1067; Costas, S., O. Ferreira and G. Martinez (2015[14]), “Why do we decide to live with risk at the coast?”, http://dx.doi.org/10.1016/J.OCECOAMAN.2015.05.015; Kousky, C. (2014[15]), “Managing shoreline retreat: A US perspective”, http://dx.doi.org/10.1007/s10584-014-1106-3.

A number of countries are providing adaptation guidance to local governments, businesses and the public, which is especially a focus for countries with a decentralised approach to adaptation. For example, Australia has a web-portal “CoastAdapt”, which provides tools such as inundation mapping software, local coastline morphological information, coastal climate adaptation decision-making guidance, as well as local and international case studies. The government of New Zealand provides non-statutory guidance to local governments on how to adapt to coastal hazards and climate change. The guidance includes information on adaptive planning, community engagement and how to implement a risk-based approach (Ministry for the Environment, 2017[16]). It is essential that these approaches meet the needs of end users as their actions move through the coastal adaptation policy cycle, from information provision, vulnerability and risk assessments to appraising and selecting adaptation options, and on to monitoring and evaluation actions. In Estonia, guidance material for general planning has a section dedicated to taking climate change into account.

Box 3.2. Early warning systems for risk communication

Early warning systems are an essential component of a policy response to mitigate the loss of life and property from coastal flooding. By providing timely information about hazards (water levels, wave heights) combined with knowledge about the coastal environment and topography, it is possible to facilitate the necessary evacuation of people and the implementation of any emergency flood defences. These systems are vital for risk communication not only before, but also during, an emergency.

Developments in climate modelling have resulted in more sophisticated coastal storm projections, which can accurately predict storm duration and intensity for up to around three days in advance. Nevertheless, the remaining considerable degree of uncertainty surrounding sea-level rise and storm surge trends emphasises the critical need to develop new coastal information systems.

The Estonian adaptation plan includes the objective of improving the country’s early warning and public information systems to better communicate information to vulnerable coastal residents. The aim is to increase residents’ hazard awareness, their ability to cope during emergencies and to teach them how to help others. Mexico has also set the objective of strengthening risk management through better communication and early warning systems, combined with local evacuation plans to respond to extreme coastal events. The Japan Meteorological Agency has also updated and improved its criteria for storm-surge warnings, especially to homologise the communication of when evacuation is advisory or mandatory.

Source: Adapted from national adaptation plans.

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.

3.3.1. Mainstreaming sea-level rise risks in land-use decisions

Limiting development in at-risk areas is the first line of defence against coastal hazards, therefore spatial planning policies are key in ensuring climate resilience in coastal areas. Land-use planning can reduce the exposure of new assets to climate hazards, as well as reduce the impact of hazards by dedicating land to natural buffers, such as wetlands and dunes. However, only a few national adaptation plans have aimed to mainstream SLR in existing land-use planning. Generally, land-use planning frameworks are based on historical information or do not integrate future hazard information (OECD, 2017[6]).

Some countries have committed to reviewing existing land-use legislation, regulations and standards, whereas others have already updated standards in order to explicitly address SLR impacts. For example, the Netherlands’ National Spatial Plan is a regulatory instrument used to avoid unwanted land-use developments from taking place. It prevents new building activities in specific areas along the coast and identifies emergency water storage areas to be preserved from development along the coastline (Verschuuren and Mcdonald, 2012[17]). Other examples include the Plan de Prévention des Risques in France and planning policy statements in England, which both account for SLR margins, as well as Ireland’s recently published National Planning Framework, which contains specific policy objectives linked to adapting to SLR.

As described in Chapter 2, the national level tends to set land-use planning frameworks, but local authorities have a critical role in implementing them, and sometimes issue their own regulatory requirements. Consequently, many national governments have binding or non-binding advice for local governments on incorporating SLR into existing regulations. For example, Denmark passed a law allowing municipalities to consider climate change directly in local land-use planning decisions, enabling municipalities to ban construction in certain areas solely due to reasons relating to adaptation (OECD, 2013[18]). In France, local authorities are obliged to take hazard maps into consideration in land-use planning decisions, and mayors can and have been made liable for ignoring hazard zones (OECD, 2017[6]). A draft law is also being considered in France on coastline retreat, which would limit development within 100 metres of the coast and facilitate the planned retreat of people and assets (French Senate, 2018[19]).

Box 3.3. Factoring uncertainty into planning and regulation

A dynamic, forward-looking approach to planning and regulation that explicitly deals with uncertainty is needed to address the changing pace and magnitude of climate impacts. This is especially the case for sea-level rise, where local-level variations reinforce the need to incorporate uncertainty into site-specific adaptation decisions.

The Belgian Sigma Plan was designed in 1977 to protect the coastline of the Scheldt and its tributaries from storm-surge floods. An update was implemented in 2005, as the original plan was insufficient to provide protection for current and likely future sea-level conditions. The revised programme increased the baselines of its protection measures and established controlled flooding areas to allow overflow water to flood during storm surges if needed. A number of potential additional measures have been designed for after 2050 in case they are needed to address sea-level rise that is higher than anticipated.

The Delta Programme in the Netherlands is using “adaptive delta management” to develop flexible strategies that link short-term decisions with long-term needs. This approach identifies multiple potential strategies (“adaptation pathways”) that can be alternated between and the first steps make sense under every scenario (“no regret” measures). The circumstances under which it would be logical to move from one approach to another depending on actual sea-level rise developments are studied, along with how options can be kept open to actually enable that transition. The approach has already been applied in several Delta sub-programmes, such as in the Rhine Estuary-Drechtsteden.

Source: Climate-ADAPT (2014[20]), “An integrated plan incorporating flood protection: The Sigma Plan (Scheldt Estuary, Belgium)”, https://climate-adapt.eea.europa.eu/metadata/case-studies/an-integrated-plan-incorporating-flood-protection-the-sigma-plan-scheldt-estuary-belgium; OECD (2014[21]), Water Governance in the Netherlands: Fit for the Future?, http://dx.doi.org/10.1787/9789264102637-en.

Some countries are promoting the use of ecosystem-based adaptation4 in their land-use planning; however, few formal mechanisms for this integration exist. Belgium’s and the Netherlands’ plans both intend to increase the use of natural coastal defences. Mexico’s adaptation plan has a prominent focus on ecosystem-based adaptation, and one of the plan’s goals is to incorporate ecosystem considerations into land-use planning to increase the country’s climate resilience. Many regions and cities in the United States are also focusing on nature-based solutions. For example, around 8 000 hectares of tidal marshes are being restored for coastal protection in the San Francisco Bay (Lubell, 2017[22]). Other US regions, including the state of Florida and other communities along the East Coast, have allocated permits to create “living shorelines”. These projects aim to restore natural coastal processes, which can reduce the adverse effects of erosion and storm surge. One regulatory mechanism to enhance this integration is “living shoreline permits”. The US Army Corps of Engineers recently streamlined the permitting process for living shorelines in an effort to incentivise these measures and correct the comparative advantage held by hard infrastructure projects in terms of shorter time frames to receive permits.

3.3.2. Integrating sea-level rise margins into infrastructure standards and building codes

An adaptation measure that is being used more widely is applying a climate change safety margin during the design process for hard infrastructure measures, such as dikes, levees and seawalls (Wilby and Keenan, 2012[23]). Coastal defence infrastructure is designed to achieve a level of service (such as protecting a community from a 100-year flood), and in general, this level of service is determined using historical climate information, which does not incorporate changing conditions. Several countries have updated design standards, such as Denmark, Germany, the Netherlands and the United Kingdom. In Germany, dike crests have been widened in order to address uncertainty in future SLR (see Chapter 4). Depending on existing institutional arrangements, these changes differ in their legal status across countries. In some cases they are set out in regulation, whereas in others they take the form of guidance documents. For example, the UK allowances for climate safety margins for sea-level rise are contained in planning regulation and guidance for engineers, while the Canadian Standards Association offers general advice (Wilby and Keenan, 2012[24]).

SLR considerations have been incorporated into building and infrastructure standards beyond coastal protection. For example, in Australia, some regional governments have released technical guidance to ensure infrastructure design is resilient to climate change, with a focus on SLR. The Western Australia government’s Standards and Technical Guide on Addressing Climate Change in Road and Traffic Engineering, for example, is helping planners, designers and managers identify climate change risks relevant to the construction of roads and bridges. The state road operator (WA Main Roads) requires that the implications of a 300 mm sea-level rise (450 mm for structures) be considered as part of planning, design and construction for all rehabilitation and expansion projects near coastal areas (Vallejo and Mullan, 2017[3]). Examples of changes in building codes, generally done at the regional or local level, can be found in Box 2.3. When enshrining SLR considerations in infrastructure-related regulation, policy makers should strive to strike a balance between creating consistent, straightforward standards, while taking into account the uncertain and context-specific nature of climate risks (Vallejo and Mullan, 2017[3]).

3.3.3. Integrated coastal zone management

Many countries mainstream SLR considerations into their integrated coastal zone management (ICZM) frameworks, an acknowledged process to deal with current and long-term coastal challenges. ICZM is a long-term, iterative and evolutionary framework that integrates a range of activities and stakeholders across different coastal sectors in order to encourage sustainable development (Wong et al., 2014[25]). The issues found within SLR and coastal adaptation are reasonably similar to those faced within ICZM, which can offer an enabling environment for adaptation measures.

The mainstreaming of SLR into ICZM is particularly common for countries with coastlines on the Mediterranean Sea. The Barcelona Convention, ratified by the EU in 2011, defines a common legal binding framework for ICZM in the Mediterranean. The ICZM Mediterranean Awareness-Raising Strategy considers climate resilience to be one of the key issues for coastal development (Albini et al., 2017[26]). In Spain, local coastal management plans mainstream future SLR projections into ICZM frameworks in order to regulate development along the coastline. Portugal’s coastal zone management plans for islands of the Azores archipelago encourages public participation to develop measures that are legally binding and set the potential for land use. They incorporate future climate projections to prevent and manage hazards and to balance economic, social and cultural development while preserving the coastal environment (Albini et al., 2017[26]). Israel’s 2004 Protection of the Coastal Environment Law establishes principles and limitations for the sustainable management, development and use of the coastal environment. SLR is mainstreamed into this legislation as the shoreline is officially set at a level that reflects projections to 2100.

There is limited evidence and agreement on the conditions for effective mainstreaming of SLR into ICZM, despite its relatively widespread application. A local-level study at Cork Harbour, the second largest port in Ireland, found that SLR mainstreaming within an ICZM approach led to a faster and more efficient implementation of adaptation measures, as the preparatory steps had already been initiated by the ICZM activities (O’Mahony et al., 2015[27]). A review of this mainstreaming approach in Europe found that the complexity of coastal regulations, as well as an absence of commonly agreed objectives and time frames hinder its implementation and effectiveness (EEA, 2013[28]).

3.3.4. Economic instruments

Economic instruments, such as risk-based flood insurance and property risk disclosure (see Box 3.6), can be well-suited to reducing coastal risks; however, there are few examples where they are effectively used in practice. Using economic instruments to respond to rising coastal risks can yield the following benefits:

  • Lower public costs: economic instruments can lower public expenditure as responsibility for risks, and consequently for potential costs, is transferred to the direct beneficiaries of the risk-reduction measures. In addition, part of the decision process of coastal adaptation is transferred to individuals, which then reduces administration costs (Filatova, 2014[29]).

  • Flexible and efficient use of space: economic instruments should only remove developments where individual costs do not exceed personal benefits, e.g. those that are economically inefficient (Filatova, 2014[29]).

  • Stakeholder involvement: the communication of risks through economic signals, such as the cost of insurance premiums, ensures individuals are aware of their level of risk and builds towards a “whole-of-society” approach to risk reduction (OECD, 2015[30]).

Flood insurance is probably the most studied economic instrument in relation to flood risk (which encompasses coastal flood risk) management. Many countries have acknowledged that the insurance industry has an important role to play in influencing future behaviour in relation to known risks. In theory, the establishment of risk-based insurance premiums can incentivise households to reduce their own risks so that they can access cheaper insurance (Surminski and Thieken, 2017[31]). In practice, there is mixed and limited evidence on the success of insurance in encouraging this behaviour. For example, in Germany and England, areas with high flood insurance penetration rates tend to have lower uptake of household-level protection measures (Surminski and Thieken, 2017[31]). A number of obstacles prevent insurance from acting as an effective economic instrument to reduce coastal flood risk, such as the lack of adequate risk-based pricing, misalignments between the needed prevention investments by policyholders and the premium savings, the short-term nature of insurance contracts, as well as a general uncertainty surrounding the advantages of risk-reduction measures (Crick, Jenkins and Surminski, 2018[32]).

Box 3.4. Government investments in risk reduction to support the insurability of flood risk

Governments have a vital role in supporting the insurability of flood risk through investments in risk reduction at the community and household level. Some OECD countries consider the availability and/or affordability of flood insurance coverage when deciding where to target investments in risk reduction (OECD, 2016[4]). Properties in high-risk areas, commonly developed before the true level of flood risk was established, should be a specific focus for risk reduction given the difficulty of providing a viable insurance offering to households in those areas.

Japan’s and Poland’s national adaptation plans focus on improving general risk-reduction policies to maintain the viability of insurance coverage. Poland’s adaptation plan includes reference to possibly supporting property insurance from public funds and encouraging actions that minimise the consequences of extreme events, including those in the coastal zone (MoE, 2013[33]). Japan’s plan also examines the insurability of risks, and commits to upgrading risk management for natural disasters to ensure insurability continues (Japanese Government, 2015[34]).

Few countries have revised financial protection mechanisms as part of their adaptation planning. Two exceptions are Finland and the United Kingdom, where climate change has been one of the factors leading to a change in insurance provision. In Finland, the public insurance scheme has been shifted to a private one in response to rising public costs from flooding. At the beginning of 2014, the state compensation system for flood damages in Finland came to an end and coverage of damages was shifted to private insurance companies (BASE, 2014[35]). In the United Kingdom, a public reinsurance scheme was created with the goal of increasing availability and affordability of private insurance for high-risk properties that were otherwise no longer insurable due to mounting risks. The scheme, called Flood Re, formally cross-subsidises high and low flood-risk households in order to cap flood risk premiums in very high-risk areas (about 2% of households) (Lamond and Penning-Rowsell, 2014[36]). The scheme is reviewed at least every five years and is planned to be in place until 2039, at which point home insurance prices should fully reflect flood risk (elaborated in Box 3.5).

Box 3.5. Transition effects of Flood Re in the United Kingdom

Flood Re was created in 2016 in order to support the private insurance industry and encourage the affordability of flood insurance for policyholders. The scheme works by providing insurance companies with the possibility of reinsuring policies at a highly discounted price. A levy for the subsidised reinsurance is collected from insurers, who can pass on the levy to policyholders. As insurers can pass on their risk for a reduced price, they can charge lower premiums to high-risk policyholders. All homes are eligible for Flood Re, regardless of their flood risk; however, the price of accessing Flood Re reinsurance was set with the aim of making sure that the coverage is only sought for high-risk properties.

In the long term, the main aim of Flood Re is to encourage a transition to a free market that uses risk-reflective pricing. However, to achieve this, a combination of amending premium thresholds and reducing flood risk will be necessary to keep flood insurance affordable. Yet, there are already concerns that the design of the new pool does not sufficiently consider rising flood risks due to climate change nor incentivise flood risk reduction or the improvement of the flood resilience of properties. Indeed, the UK Committee on Climate Change finds that in its current design, Flood Re is likely to be counter-productive to the long-term management of flood risk as it does not provide enough incentives for high-risk households to put measures in place to avoid or reduce flood damage.

The UK government has accepted that risk-reduction efforts are essential for the future affordability of flood insurance, and has pledged to collaborate more closely with other stakeholders. Yet despite the release of a second adaptation plan in 2018, criticisms of the management of Flood Re continue, in particular that not enough action has been taken to manage the transition period ahead of the programme’s withdrawal.

Source: Brown, K. (2018[37]), The New National Adaptation Programme: Hit or Miss?, https://www.theccc.org.uk/2018/07/19/the-new-national-adaptation-programme-hit-or-miss; Crick, F., K. Jenkins and S. Surminski (2018[32]) “Strengthening insurance partnerships in the face of climate change: Insights from an agent-based model of flood insurance in the UK”, http://dx.Doi.org/10.1016/J.SCITOTENV.2018.04.239.

Attempts to change insurance provision have not always proved sustainable. Participation in the US National Flood Insurance Program (NFIP), which helps households to protect themselves financially against inland and coastal flooding, is obligatory for properties with mortgages from federally regulated or insured lenders located in high flood-risk areas (defined as a 1% annual chance of flooding during a 30-year mortgage). Nevertheless, misalignments between NFIP premiums and real flood risks, an inability to reject high-risk applicants, and a significant programme deficit led to the passing of the Biggert-Waters Flood Insurance Reform Act (BW-12), designed to target the fiscal soundness of the programme. The resulting annual premium rate increases of up to 20% for policyholders led to the reform being substantially repealed two years later following sustained political opposition and lobbying on the part of homeowners. Suggestions for further reforms to the programme in the future have focused on phasing in risk-based insurance premiums and ensuring adequate coverage that fully reflects flood risk exposure.

National-level grants or incentives for household-level coastal protection measures remain uncommon. One exception is the United Kingdom, which provided GBP 5.2 million in funding between 2009 and 2011 to support a “property-level protection” pilot scheme, which led to the installation of measures such as flood barriers, non-return valves and airbrick covers in 1 109 properties (Defra, 2014[38]; Surminski and Eldridge, 2017[39]). In the United States, the Federal Emergency Management Agency has three flood risk-mitigation programmes: Pre-Disaster Mitigation, the Hazard Mitigation Grant Program and Flood Mitigation Assistance. Flood Mitigation Assistance includes flood-related grants, which provide grants to local, state and tribal governments and others at the community level to protect individual properties (National Research Council, 2014[40]).

Other than flood insurance and grants for household measures, economic instruments are not mentioned in OECD country adaptation plans as a tool to manage rising coastal risks. Property risk disclosure (described in Box 3.6) shows promise, but there is currently limited evaluation of its scalability, effectiveness or limitations.

Box 3.6. Property risk disclosure

Property risk disclosure is the release of information about a property that is vital to a potential buyer’s decision. It offers a potential tool by which buyers can become informed about both a home’s history of damage and its exposure to future coastal flood and erosion risk. Sea-level rise (SLR) property risk disclosure can be either voluntary or mandatory. Mandatory disclosure has the benefit of higher compliance rates among sellers and levelling the field; however, it remains uncommon. Only a select few subnational jurisdictions apply mandatory property risk disclosure for coastal risks, particularly certain Australian and US states:

  • California, United States: since 1998, sellers have been required to complete statements informing buyers if the property is located in a “special flood hazard area”. An updated 2017 law obliges sellers to provide greater information to tenants on where they may obtain guidance on coastal flood hazards.

  • Florida, United States: since 2006, sellers of coastal property seaward of the Coastal Construction Control Line have been required to inform potential buyers that their property “may be subject to coastal erosion and to federal, state or local regulations that govern coastal property”.

  • Victoria, Australia: property sellers must notify buyers on whether the municipality has classified the area at risk of flooding and whether further redevelopment has been prohibited.

The question of whether disclosure of previous coastal flood damage or current SLR risk negatively affects property values has received political attention. For example, the Australian state governments of Queensland and New South Wales rejected proposed mandatory disclosure processes for projected climate risks, including SLR risk, when purchasing a property, citing problems for developers and landowners in obtaining insurance and selling land.

Sources: England, P. (2013[41]), “Too much too soon? On the rise and fall of Australia's coastal climate change law”, http://hdl.handle.net/10072/57341http://www.thomsonreuters.com.au/environmental-and-planning-law-journal-online/productdetail/97170; Henstra, D. and J. Thistlethwaite (2018[42]), “Buyer beware: Evaluating property disclosure as a tool to support flood risk management”, https://www.cigionline.org/publications/buyer-beware-evaluating-property-disclosure-tool-support-flood-risk-management.

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.

Box 3.7. Mobilising private investment for coastal adaptation

Public actors are currently the principal funders of coastal adaptation, and the current and future climate challenges related to sea-level rise (SLR) will place increasing pressure on these resources. As such, there is increasing interest in mobilising private investment towards coastal adaptation.

Challenges such as the distribution of liabilities between public and private actors can act as barriers to private investment for coastal projects. Liability risks to private investors related to large-scale coastal adaptation investments can pose significant barriers given the uncertainties associated with climate change and SLR. For example, private actors may be deterred from investing if SLR could lead to extensive property or infrastructure damage for which they would be liable. Conversely, if governments act as insurers of last resort in order to limit the liability of private investors, this could discourage private actors from making the levels of investment required.

Public-private partnerships can align public and private interests by providing incentives to private investors for learning through long-term contracts, while allowing public actors some control over outcomes. Public-private partnerships therefore offer the potential to mobilise private investment in coastal adaptation, especially when operational costs are a large proportion of the overall project costs.

Sources: Bisaro, A. and J. Hinkel (2018[46]), “Mobilizing private finance for coastal adaptation: A literature review”, http://dx.doi.org/10.1002/wcc.514; OECD (2016[47]), Financial Management of Flood Risk, http://dx.doi.org/10.1787/9789264257689-en; World Bank (2015[48]), Green Bonds Attract Private Sector Climate Finance.

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.

Table 3.2. Examples of proposed or operational indicators to monitor coastal adaptation

Country

Type of indicator

Indicator

Australia

Capacity of planning frameworks to support effective management of climate risks in the coastal zone

Number of local governments considering climate change risks in land-use planning

Finland

Raising of flood banks

Results of stakeholder surveys on a five-point scale

France

Climate change vulnerability maps of coastal zone developed

Number of wave recorders installed along coastal areas

Germany

Sea level (WW-I-9); intensity of storm surges (WW-I-10)

Investments in coastal protection (WW-R-3)

Spain

Process-based indicators on the C3E project1

United Kingdom

Cost of damage to buildings (disaggregated by coastal erosion, other flooding events)

Capital and revenue spent in flood risk and coastal erosion management against the need

Urban/built-up areas at risk of flooding (disaggregated by fluvial, coastal and pluvial flooding); uptake of measures to increase resilience and resistance to flood risk in new development

Notes:

○ Effect-based indicator.

□ Process-based indicator.

◊ Outcome-based indicator.

1. The C3E (Climate Change on the Spanish Coast) project identifies the impacts and vulnerabilities linked to climate change along the Spanish coastline. The results of these projections will inform coastal adaptation measures to put in place.

Source: Adapted from national adaptation plans.

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
picture

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).

Box 3.8. OECD 2015 Principles for Stakeholder Engagement

Although engagement processes cannot be easily replicated from one context to another, the following principles are proposed for effective stakeholder engagement:

  • Inclusiveness and equity: Identify all stakeholders who have a stake in the outcome or that are likely to be affected.

  • Clarity of goals, transparency and accountability: Define the ultimate line of decision making and the objectives of the engagement.

  • Capacity and information: Allocate proper financial and human resources to engagement and ensure necessary information is available.

  • Efficiency and effectiveness: Regularly assess the process and outcomes of stakeholder engagement to learn, adjust and improve accordingly.

  • Institutionalisation, structuring and integration: Embed engagement processes in clear legal and policy frameworks, organisational structures/principles, and responsible authorities.

  • Adaptiveness: Customise the type and level of engagement as needed and keep the process flexible to changing circumstances.

Source: OECD (2015[57]), Stakeholder Engagement for Inclusive Water Governance, http://dx.doi.org/10.1787/9789264231122-en.

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
picture

Source: Adapted from OECD (2014[61]), Boosting Resilience through Innovative Risk Governance, http://dx.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.

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Notes

← 1. A similar review of national policies for water-related climate risks, including flooding, was undertaken in 2013 (with country profiles available at: www.oecd.org/env/water-and-climate-change-adaptation-9789264200449-en.htm).

← 2. Australia, Austria, Canada, Chile, Costa Rica, the Czech Republic, Estonia, France, Hungary, Iceland, Ireland, Israel, Japan, Latvia, Mexico, Myanmar, New Zealand, Peru, Philippines, Poland, Portugal, the Russian Federation, Spain, Switzerland, Turkey, the United States and Viet Nam

← 3. Including inland and coastal flooding

← 4. Nature-based coastal defences are a form of ecosystem-based adaptation. Further detail can be found in Chapter 2

← 5. Government. Deprivation is assessed using the DCLG’s Index of Local Deprivation: https://www.gov.uk/government/publications/english-indices-of-deprivation-2010

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