Climate Change and Damage from Extreme Weather Events

The risks of extreme weather events are typically being estimated, by federal agencies and others, with historical frequency data assumed to reflect future probabilities. These estimates may not yet have adequately factored in the effects of past and future climate change, despite strong evidence of a changing climate. They have relied on historical data stretching back as far as fifty or a hundred years that may be increasingly unrepresentative of future conditions. Government and private organizations that use these risk assessments in designing programs and projects with long expected lifetimes may therefore be investing too little to make existing and newly constructed infrastructure resistant to the effects of changing climate. New investments designed to these historical risk standards may suffer excess damages and poor returns. This paper illustrates the issue with an economic analysis of the risks of relatively intense hurricanes striking the New York City region.climate; global warming; natural disasters; risk; adaptation

The Atlantic Sea Scallop Fishery in the U.S.and Canada: A Natural Experiment in Fisheries Management Regimes

The Atlantic sea scallop fisheries in the U.S. and Canadian offshore waters provide a natural experiment in fisheries management regimes. Starting in 1986, in side by side areas of George’s Bank, Canada adopted a rights-based approach while the U.S. continued with effort controls. Analysis of their experiences shows that the resource has been better maintained in Canada with lower fishing effort, that the Canadian fishing industry has become more prosperous and innovative relative to that in the U.S., and that the Canadian co-management regime is more cooperative. These results suggest that systematic evaluation of actual experience with rights-based fishery management regimes is needed as the basis for policymaking

Climate Change and Damage from Extreme Weather Events

The risks of extreme weather events are typically being estimated, by federal agencies and others, with historical frequency data assumed to reflect future probabilities. These estimates may not yet have adequately factored in the effects of past and future climate change, despite strong evidence of a changing climate. They have relied on historical data stretching back as far as fifty or a hundred years that may be increasingly unrepresentative of future conditions. Government and private organizations that use these risk assessments in designing programs and projects with long expected lifetimes may therefore be investing too little to make existing and newly constructed infrastructure resistant to the effects of changing climate. New investments designed to these historical risk standards may suffer excess damages and poor returns. This paper illustrates the issue with an economic analysis of the risks of relatively intense hurricanes striking the New York City region

Environmental Exposures in the U.S. Electric Utility Industry

Quantitative analysis of 47 U.S. electric utilities’ environmental exposures to impending air quality and climate policies shows potentially material and highly differentiated financial impacts. For many companies, the minimized compliance costs of a four-pollutant cap-and-trade regulatory regime would not necessarily exceed those of a three-pollutant regime that omitted controls on carbon dioxide emissions.Fragmented regulatory requirements would have the highest compliance costs. The companies studied vary considerably in the adequacy of their financial reporting of these potential impacts. Greater transparency would benefit investors and the most favorably positioned companies