Committed Climate Vulnerability and its Implications for Adaptation Demand

The spatial and temporal distribution of future economic losses due to climate variability and change will largely be dictated by the geography of socioeconomic exposure to climatic extremes and natural hazards. As a consequence, the geographic heterogeneity of societal demand for adaptation can be inferred from an understanding of the spatial dynamics of that exposure. A historical index of potential socioeconomic exposure (PSE) was developed at the U.S. county level based upon population size and inflation-adjusted measures of wealth. Since 1960, U.S. PSE has increased preferentially in the U.S. Southeast (particularly coastal counties) and Southwest relative to the Great Plains and Northeast. Projections of future changes in PSE based upon demographic and economic scenarios indicate these historical trends will continue over the next several decades. Such socioeconomic inertia will commit the United States to a long-term path of increasing, but geographically heterogeneous, vulnerability to climate extremes, independent of future climate change. This will contribute to a concomitant increase in demand for reactive and/or anticipatory adaptation.

The observed geographic pattern of adaptation demand has implications for understanding the consequences associated with specific climatic extremes, which are also heterogeneously distributed. This phenomenon was examined in the context of tropical cyclones. Estimates of historical direct economic losses at the U.S. county level from 1960–2008 were normalized to 2009 population and wealth using historical PSE and subsequently annualized. When those damages were scaled based upon county-specific projections of PSE, a U.S. commitment to future growth in economic losses due to tropical cyclones was apparent. Central estimates indicated increases in economic losses of 400–600% by the mid-21st century. At the upper-end, however, losses were projected to increase by approximately 1,600%, consistent with insurance industry data suggesting losses double every 10 years. The implications of this committed vulnerability for adaptation demand depend upon assumptions regarding societal risk tolerance, autonomous adaptation, and discounting of future losses. For social discount rates of less than ~5%, the net present value (NPV) of future losses grows over the 21st century, suggesting greater near-term investments in hazard mitigation can be justified on cost/benefit grounds. Above discount rates of 5%, however, the NPV of future annual losses is constrained at or below contemporary levels, reducing demand for greater adaptation investments, and reinforcing the vulnerability commitment. Hence, the confident demonstration of the potential for future increases in the frequency, intensity, or duration of climate extremes may be necessary if institutions that employ relatively high discount rates in decision-making are to justify increased investments in anticipatory adaptation.

Given the apparent inertia of the U.S. socioeconomic landscape, reducing the rate of growth in future vulnerability will be dependent upon overcoming such barriers to action in pursuit of transformative adaptation policies and measures that systematically divert future development away from at-risk areas and/or substantially reduce the vulnerability of the built environment in situ. To the extent that the future growth in PSE is anticipated by institutions, there are likely to be significant opportunities for slowing the rate of growth of vulnerability by incorporating consideration for climate change into future development. Furthermore, while slow rates of PSE growth may be beneficial in one context, they may also reflect low adaptive capacity for coping with climate risk as a result of factors such as depopulation and/or lack of economic opportunity.