I recently finished Matthew Kahn's newest book titled "Climatopolis". I was looking forward to reading this book from the summer but did not find the time this past semester to indulge in Kahn's thought-provoking piece.
To begin, I highly recommend this book to anyone and especially those who love cities. According to the UN, 60% of the world's population will be living in cities by 2030. Climate change is bound to and already has affected urban areas. There are many opportunities for urbanites and Kahn is optimistic about how we will adapt.
Climate change has been a topical subject since 2006 when Al Gore and Nicholas Stern frightened the world about the future risks humanity would face if we did not take action. Gore, Stern (to a lesser extent) and a number of climate change researchers including climate scientists, economists, geographers etc, often focus our attention to climate change mitigation. This means looking at tools or systems (such as a carbon tax, cap-and-trade emissions standards, energy conservation) that will help lessen the impacts of climate change by emitting fewew greenhouse gas emissions. Few, however, talk about the importance of adaptation, or simply adapting to climate change in our uncertain future.
Matt Kahn's book takes us on economic journey (he's an environmental economist) exploring how residents of global cities such as Los Angeles and New York City can adapt to climate change if they receive proper signals about the importance of doing so. In a time when people have better access to information (thank you Google) there is more knowledge being created about the risks of more frequent natural disasters - flooding, hurricanes, earthquakes, heat waves and droughts are all severe and highly damaging to any city in the world. Whether it is a developed or developing city, some residents are far more impacted than others (take hurricane Katrina in 2005 as a good example).
Throughout the book, Kahn talks about two vastly different groups and how they will respond or adapt to climate change. The first group is the Homer Simpsons of the world; those who are lazy, myopic and unwilling to sacrifice for their long-term good. They might be more skeptical of climate change and do nothing to protect themselves from it. Or, there is the traditional economic person who is cold, calculating and self-interested who Kahn calls the Mr. Spocks (Star Trek) of the world. The Mr. Spocks will take advantage of all of the information available on climate change and take pro-active steps to cope with the uncertainty surrounding climate change.
Take this example from the book: Kahn explains a situation where Al Gore (Mr. Spock) and Homer Simpson are both offered an opportunity to buy a home at a low price in an area that climate change scientists believe is at a high risk for serious flooding. The Al Gores would say either no thanks or if they accepted this offer, would take steps such as elevating the home and other costly flood-proofing actions to protect it. Homer (the ignorant one) would not be aware and take the offer right away. The Homers might take advantage of the low cost and migrate (or as Kahn says, "vote with their feet" by moving) away from a safe city such as Salt Lake City* to more risky and desirable cities like NYC, if they could trust their government and engineers to invent a credible protection strategy. The local government could construct seawalls for example, to help protect households living on the coast. That would be costly though and the money would come from all taxpayers including those who decided to live in less risky areas. As more and more households start to live in these risky areas, the federal government would provide more funds for protection because their political clout increases. So, if there is no flood, Homer will live on to be a happy person. If there is one, Al Gore will not suffer and Homer will.
Kahn provides examples like this to illustrate how both information and incentives can drastically change the way people think and adapt to climate change. Forward-looking entrepreneurs can innovate (earning huge profits) and be ready with a variety of products to help the Homers cope with their new reality. Thomas Mayne, an architect at UCLA, is discussed in Kahn's book because he is designing a "floating house" for New Orleans' residents. Such innovation can earn him big bucks for those wishing to live in riskier flood-prone areas.
There are countless examples in the book of such risky areas (like fire zones with wealthy landowners) where a market or insurance system can be created to price land based on climate change risk. An example comes from the state of Missouri where some local governments encourage developers to develop on high risk flood plains. This so-called "land assembly problem" allows developers to build on really cheap land in flood prone areas and make huge profits. The local government is excited about the new tax revenue and the job creation that accompany these projects. Alas, when floods happen in that state the federal government comes in a bails out the developer with tax payers' money because they were foolish enough in the first place to build in risky areas! Kahn suggests that insurance companies and markets need to appropriately price this land so that any risk takers who suffer from such disasters are solely affected by it, and not the taxpayers who probably disagreed with the development in the first place.
The bottom line is that there are a number of opportunities in cities across the world to embrace a more market and insurance oriented approach based on climate change risk. When insurance companies start to price land based on future risk, people will respond in different ways - some will migrate and some will stay and take advantage of the new demand for products such as floatable houses, more energy efficient air conditioners, rain water harvesting systems and many more. They will, in effect, adapt and create a greater market for such products allowing for better innovation and design from the business world thereby creating a safer city in our uncertain future. Keep in mind that while these adaptation technologies sound very promising, they will probably be very expensive and hence out of reach for the poorest and most marginalized - the group most affected by climate change.
These are just some highlights from the book. I do not agree with all of Kahn's points but I commend him for his forward-looking approach on a significant global issue of our time. He talks about Los Angeles and NYC extensively in his book because they are good case studies of climate change risk and adaptation potential. There is also a good amount of writing on China in the book and Kahn's predictions about how they will (or will not) green their cities in the face of climate change.
I have a copy of the book and would be happy to lend it to anyone interested.
I will write a post in January about some of the lessons urban planners could learn from Kahn's book.
*Kahn comes up with a list of the United States' top five most resilient cities that will cope best with climate change. These include 1) Salt Lake City 2) Milwaukee 3) Buffalo 4) Minneapolis 5) Detroit
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