Real World Economics: Nature takes its toll, and we all will pay

Extreme wildfires, droughts and rainfall, record-breaking heat in places like British Colombia and other weather-related events are increasingly common in the news. Climate is changing. Edward Lotterman Societies and economies, including ours, will adapt in one way or another, although not necessarily in ways that will succeed in preserving the lifestyles and levels of consumption that some now have. Yet such adaptation involves complex economic issues of collective decision-making in an era when we are politically more divided and public discourse is more extreme than it has been in many decades. In intro economics courses, students are told that adapting to change is one of the fundamental challenges all economies face. But unless the students continue further, they learn little about the complex challenges of collective decision-making inherent in responses to natural forces such as climate. The reason is that such societal choices inherently are a mess. For a concrete example, consider the plight of New Orleans. It is a short-run success story. Despite the intensity of last week’s Hurricane Ida that caused enormous damage across a broad area, the city itself did not suffer the destructive flooding and many deaths as it did from Katrina 16 years ago. This is due largely to $17 billion in federal spending on improved levees, storm surge barriers and the like. This spending was unprecedented for a large metro area on a per capita basis. It was the largest such flood-control effort since construction of the main-stem Missouri River dams from South Dakota up into Montana. Those were built over a 30-year period and were intended to protect the entire Missouri-Mississippi valley, not just one metro area. Yet even with all that, New Orleans faces a bleak future over the longer run. First, this depends on the Mississippi staying in its current location. However, over geologic time, water draining from the center of North America has found an outlet in many locations often varying between what we know as the Mississippi, its current Louisiana rival, the Atchafalaya, and the Red River. Natural geological forces drive this variation over time. Human activities including three centuries of levee building and wetland drainage accentuate it. This is all well-explained in John McFee’s little book “The Control of Nature.” The upshot is that the water level in the Mississippi now is from 10 to 22 feet above that of the Atchafalaya just a couple of miles away. A Corps of Engineers lock allows vessels to pass from one to the other. If left alone, the Atchafalaya would “capture” Mississippi water. Most of the water now flowing through New Orleans would enter the Gulf near what is now Morgan City, La. Salt water would intrude as far north as Baton Rouge. Just after World War II, Congress determined this was not going to happen. It decreed a 30/70 split of flows from the north between the Atchafalaya and Mississippi. We spent tens of billions on control structures to regulate these flows and on emergency spillways and flood channels to back it all up. But these nearly have washed out during floods in the past, including 2011, and certainly will at some point in the future. The question is if it will be in one year, 10 or 50. That is not the city’s only problem. The ground under the center of the city is subsiding some six inches every decade. This is independent of the Mississippi-Atchafalaya problem. The greater the subsidence, the more difficult the maintenance of levees and the enormous pumping system to remove water accumulating on the land side. Pumps need their own back-up power since, as Ida had proved, hurricanes can do enormous damage to electrical distribution systems. Such subsidence is not unique to New Orleans, it also is common along the shores in Miami and environs. Furthermore, there is the continuing shrinkage of the Mississippi delta and of near-shore barrier islands that protect the mainland from storms Again, this problem is not only Louisiana’s. Indeed, it is an extreme and immediate challenge all along the east coast from Miami north along the Carolinas, Virginia, Delaware, Maryland and New Jersey. Shifting and loss of such barriers will affect millions, including the entire New York City metro area. When such geologic changes occur, the question is whether to try to stop them with engineering structures or measures or to facilitate the movement of threatened populations to safer areas. Talk to geologists, and the second alternative is the only sound one. Threats to the New Orleans or the Gulf Coast and East Coast are a matter of decades, not centuries. However, it is politically impossible to even consider pulling the plug on Jersey shore islands much less the Carolinas’ Outer Banks or the Big Easy. The problem is that people are not rational. Denial is a very common response to threats. I engaged in it myself with a swollen lymph node in my neck. All of us have heard little knocks from under the hood and told ourselves it was something minor. But sometimes a broken connecting rod does go through the engine block and we spend thousands. Climate change magnifies the costs of such avoidance astronomically, for all humankind. So when scientists say that some islands will disappear or rivers will change course, we wish them to be wrong. Economist Mancur Olson’s “logic of collective action” plays out in spades. A small number of people, each with a great deal at stake ,such as families that have owned houses on a beautiful island or businesses operating an oil refinery or grain export elevator on a doomed river, have large incentive to demand government spending to make doom disappear. No individual in the rest of the population stands to lose much, so it is not worth their opposing the outlays or calling for alternatives that are better over the longer run. So we have rebuilt towns in flood plains and pumped millions of tons of sand onto disappearing beaches. But in changing climates, we are rowing against the current and will face exhaustion.[related_articles location=”left” show_article_date=”false” article_type=”automatic-primary-tag”] St. Paul economist and writer Edward Lotterman can be reached at 

Real World Economics: Nature takes its toll, and we all will pay

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