Responding to Rising Seas by OECD

Author:OECD
Language: eng
Format: epub
Tags: industry/environment
Publisher: OECD Publishing
Published: 2019-03-06T00:00:00+00:00

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

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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