MA - Climate-Smart Economies: Coordinating Economic Development with Resilience Planning

Coordinating policies that spur job creation and improve community resilience can help mitigate the impacts of climate change on local infrastructure, jobs, and economies in the Chesapeake Bay region.

For the numerous communities that are under threat from weather-related disasters and the effects of climate change, building resilience will require coordinating efforts across different policy areas. One challenge, which we highlight in our recent working paper, is reconciling economic development programs with resilience policies that help communities prepare for and adapt to climate change.

The United States currently spends $60 billion per year to spur job creation in communities. State governments, which account for the bulk of the spending, offer incentives in the form of tax credits, direct subsidies, public-private partnerships, and other activities that are designed to promote business development and job growth. At the federal level, the US Economic Development Administration runs a wide range of programs that are designed to encourage innovation, global competitiveness, and regional collaboration around economic growth. In many cases, federal and state programs target communities and regions where the economies are struggling through so-called enterprise zones or opportunity zones, which are designated areas where private investment is incentivized through favorable tax rates, regulatory exemptions, and other tools.

The federal government also establishes programs to combat increasing impacts from climate change and natural disasters. For instance, the Infrastructure Investment and Jobs Act of 2021 provides $47 billion over a five-year period for investments in climate resilience. The Federal Emergency Management Agency manages several programs that provide grant funding for resilience and hazard mitigation, such as a new resilience revolving loan program that the Infrastructure Investment and Jobs Act has seeded with $500 million. Looking ahead, the budget that the Biden administration has proposed for 2024 includes $24 billion in spending on community resilience efforts across agencies. States also are increasing their spending on resilience.

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But without coordination, economic development programs and resilience programs run the risk of working at cross-purposes: economic development programs inadvertently can encourage growth in areas that are exposed to the most climate impacts, and this growth can hamper policies that are intended to improve climate resilience in those areas.

Jobs at Risk Due to Flooding and Sea Level Rise

Our paper estimates the number of jobs that are at risk from sea level rise in the Chesapeake Bay region. According to the latest projections from the National Oceanic and Atmospheric Administration, the Chesapeake Bay region is especially vulnerable to sea level rise: flooding already regularly affects coastal communities, and faster-than-average sea level rise is expected to cause even more frequent and intense flooding in this region in the near future. While many studies focus on the amount of land area and number of people that are affected by sea level rise, our focus on jobs is unique and adds to a growing body of literature that investigates the economic viability of communities that are at risk from the effects of climate change.


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We find that 176,500 jobs in the Chesapeake Bay region are located in areas that are exposed to a 100-year flood under current climate conditions (i.e., in areas that have a 1 percent chance of flooding in any given year). Sea level rise will cause the number of jobs in these exposed areas to rise to about 263,500 by 2050. These numbers represent 3.3 and 5 percent of all jobs in coastal counties and cities in the region now and in 2050, respectively.

However, these region-wide job statistics mask serious problems in several coastal communities (Figure 1). In Maryland, 36 percent of jobs in Somerset County, a low-lying county on the Eastern Shore of the Chesapeake Bay, will be exposed to flooding by 2050; so will 32 percent of jobs in Worcester County, Maryland’s only oceanfront county. In Virginia, more than 90 percent of jobs in the city of Poquoson will be at risk, and Mathews County and the cities of Portsmouth and Norfolk will see more than 25 percent of their jobs exposed to flooding by 2050.

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