纽约联储-了解美国气候变化与不平等之间的联系（英）-2021.11-42正式版

NO.991

NOVEMBER2021

UnderstandingtheLinkagesbetweenClimateChangeandInequalityintheUnitedStates

RuchiAvtar|KristianBlickle|RajashriChakrabarti|JanaviJanakiraman|MaximPinkovskiy

UnderstandingtheLinkagesbetweenClimateChangeandInequalityintheUnitedStates

RuchiAvtar,KristianBlickle,RajashriChakrabarti,JanaviJanakiraman,andMaximPinkovskiy

FederalReserveBankofNewYorkStaffReports,no.991

November2021

JELclassification:Q54,Q58,D63

Abstract

WeconductareviewoftheexistingacademicliteraturetooutlinepossiblelinksbetweenclimatechangeandinequalityintheUnitedStates.First,researchershaveshownthattheimpactofbothphysicalandtransitionrisksmaybeunevenacrosslocation,income,race,andage.Thisisdrivenbyaregion’s

geographyaswellasitsadaptationcapabilities.Second,measuresthatindividualsandgovernmentstaketoadapttoclimatechangeandtransitiontoloweremissionsriskincreasinginequality.Finally,whilefederalaidandinsurancecoveragecanmitigatethedirectimpactofphysicalrisks,theirstructuremay—inadvertently—sustainandentrenchexistinginequalities.Weconcludebyoutliningsomedirectionsforfutureresearchonthenexusbetweeninequalityandclimatechange.

Keywords:climate,naturaldisaster,inequality

_________________

Avtar,Blickle,Chakrabarti,Janakiraman,Pinkovskiy:FederalReserveBankofNewYork(emails:ruchi.avtar@,kristian.blickle@,rajashri.chakrabarti@,janavi.janakiraman@,maxim.pinkovskiy@).TheauthorsthankMarkAndrews,NicolasBecka,TerriJ.Fowlkes,AndrewHaughwout,BeverlyHirtle,AkashKanojia,NicholasKlagge,DonMorgan,MichaelJ.Roy,JoãoSantos,LamarrJ.Tanner,andKatherineTilghmanHillforvaluableinput,suggestions,andcomments.

Thispaperpresentspreliminaryfindingsandisbeingdistributedtoeconomistsandotherinterestedreaderssolelytostimulatediscussionandelicitcomments.Theviewsexpressedinthispaperarethoseoftheauthor(s)anddonotnecessarilyreflectthepositionoftheFederalReserveBankofNewYorkortheFederalReserveSystem.Anyerrorsoromissionsaretheresponsibilityoftheauthor(s).

Toviewtheauthors’disclosurestatements,visit/research/staff_reports/sr991.html.

Introduction

Althoughtheeffectsofclimatechangeoneconomicoutputandfinancialstabilityhavereceivedconsiderableattentioninpublicdiscourse,scholarlyliterature,andpolicydiscussions,theinteractionsbetweenclimatechangeandincome,wealthandhealthinequality1havereceivedfarlessdiscussion.However,itisincreasinglylikelythatclimatechangewillnotonlyhaveimportanteffectsoneconomicoutput,butthatitwillhaveprofoundeffectsonthegeographic,socioeconomic,anddemographicdistributionofoutput.ThispaperpresentsaliteraturereviewofexistingevidenceonmechanismsbywhichclimatechangecanaffecteconomicinequalityintheUnitedStates.First,wereviewwhetherrisksfromclimatechangeaffectpopulationsandregionsdifferently.Second,weconsiderwhetherinstitutionsandpoliciesaroundclimateriskmayhavedifferentialeffectsindifferentregionsandondifferentcommunities.Finally,weidentifyopenquestionsandgapsintheliteraturethatcouldbenefitfromadditionalexplorationandresearch.

Risksassociatedwithclimatechangecanbedecomposedintotwocategories—physicalrisksandtransitionrisks.Physicalrisksrefertothepotentialforlossesasclimate-relatedchanges(storms,droughts,floods,sealevelrises,etc.)disruptbusinessoperations,destroycapital,andinterrupteconomicactivity.Transitionrisksrefertothepotentialforlossesresultingfromashiftinpolicy(forexample,movingtowardalower-carboneconomy),consumersentiment,technologicalinnovationandmanyothersthatwillaffectthevalueofcertainassetsandliabilities.Transitionriskscanalsotaketheformofpersonaladaptationmechanismstocombatclimatechangethroughmigrationorinnovation.Wediscussinsectionsbelowwhetherthesephysicaland

Weinterchangeablyuse“economicinequality”todescribetheseinequalities.

transitionrisksassociatedwithclimatechangeareunevenacrossgeography,income,race,andage.2

Wefindmultipleimportantchannels,highlightedbyvariousstrandsofliterature,thatpointtothehypothesisthattheheterogeneityindirectphysicalimpactsofclimatechange,thedifferentialadaptationcapabilitiesofdifferentregions,andtheeffectsofclimatepolicyandinstitutionsmayworktoincreaseeconomicinequality.First,theliteratureonthegeographiclocationofthedirectphysicalimpactsofclimatechangesuggeststhatregionsoftheUnitedStatesthatarehometoabove-averagesharesoflow-incomeandminoritygroupsarelikelytosufferthegreatestmeteorologicaleffectsofclimatechange.Inparticular,theU.S.South,withthelowestpercapitaincomeoftheU.S.censusregions,ispredictedtoexperiencethegreatestleveloftotaldirectdamagesfromclimatechange.

Second,agrowingliteratureinhouseholdfinancepresentsevidencethatlow-incomeandminorityAmericansarelimitedinhowtheymayadapttoclimatechangebecausetheyhavelessaccesstoinsuranceandarelesslikelytohaveaccesstocreditwhenneeded.Moreover,anothergrowingbodyofworksuggeststhatamajoradaptationmechanismtoclimatechangeworldwidewillbemigrationtotheUnitedStatesfromlow-incomecountriesthatwillbeevenmoreaffectedbyclimatechange.Thismigrationislikelytomechanicallyincreaseinequality(theindirecteffectsthroughwagepressuresaremoremixed).Theliteratureonthelabormarketeffectsoftransitionfromhigh-tolow-carbontechnologiesdoesnotprovidehardevidencethatadditionaljobswillbecreatedonnet,andtheremaybesomeevidencethatthejobscreatedwilltendtorequirehigherskills.Ontheotherhand,thereisasolidliteratureshowingthatadaptationtoclimatechangein

SeeChakrabarti(2021).

theUnitedStatessofarhasimprovedhealthoutcomesforlow-incomeandminoritypopulationsintheU.S.Southeast.

Finally,alargeliteraturedocumentsthatinstitutions(suchastheFederalEmergencyManagementAgency(FEMA),banksandnonbankfinancialinstitutionsandtheNationalFloodInsuranceProgram)canplayanimportantroleinmitigatingtheimpactsofrisks,includingclimaterisks,butoftenprovideaidinwaysthatsustainexistinginequalities,evenifinadvertently.Suchapatternpertainstothedisbursementofdisasterinsurance,aswellastopublicpolicyinurbandesignandthesitingofenvironmentallyhazardousfacilities.

DoPhysicalEffectsofClimateChangeIncreaseInequality?

Inthissection,wediscusswhetherphysicalrisksfromclimatechangeaffectgeographiesandpopulationsdifferently.Westartwiththegeographicdistributionofclimateriskandfindthattheincidenceofthedirectphysicalimpactsofclimatechangeisveryheterogeneousacrossregions.Wethendiscusswhetherclimatechangeanddisastersaffectmortality,locationofresidence,productivity,andconflictbydemographics,socioeconomiccharacteristics,andgeography.

DifferencesinRegionalDistributionofClimateRisk

Regionaldisparitiesinclimateriskandnaturaldisastersareundeniable.TheFourthNationalClimateAssessment(Carteretal.2018)highlightsthattheU.S.Southeastisexpectedtobeespeciallyexposedtoclimatechange.Thatregionishometothreeofthenation’sfivelargecitieswithintensifyingheatwavesalongmultipledimensions(includingintensity,duration,etc.)—Birmingham,NewOrleans,andRaleigh—andisalsouniquelyexposedtovector-bornediseases.TheU.S.Southeastalsohasalongoceancoastlinethatishighlyexposedtohurricanes.TheNationalClimateAssessmentstatesthat“manySoutherncitiesareparticularlyvulnerabletothe

effectsofclimatechangecomparedtocitiesinotherregions”becauseSoutherncitiesaredisproportionatelylocatedinfloodplainsandhaveolderinfrastructure.TheSoutheastisnottheonlyregionexpectedtobeaffectedbyclimatechange.Forexample,theNationalClimateAssessmentnotesthattheshareofforestareaburnedbywildfiresintheSouthwestin2015wouldhavebeenapproximatelyhalfaslargeifnotfortheeffectsofclimatechange,whileasrecentlyasin1995,climatechangeaccountedforonlyasmallfractionofthisshare.

Theremaybefurtherinequalityintheimpactofphysicalrisksfromclimatechangewithinregionsifindividualswholiveinthemostdetrimentallyaffectedareasalsotendtobedisadvantagedexante.Buchananetal.(2020)identifythecoastalstatesandcitieswhereaffordablehousing—bothsubsidizedandmarketdriven—ismostatriskoffuturefloodingandrisingsealevels(Exhibit1).Theyfindthatresidentsinlow-lyingaffordablehousing,whotendtohavelow-incomesandtoliveinoldandpoor-qualitystructures,areespeciallyvulnerabletosealevelriseandincreasedcoastalflooding(seealsoSisson2020).TheU.S.Southeasthasalongercoastline—fromtheChesapeakeBaytothemouthoftheRioGrande—thananyotherregioninthecontinentalUnitedStates,makingitparticularlyexposedtocoastalflooding.Incontrast,CaliforniaandtheMid-Atlanticregion—NewYork,NewJersey,andConnecticut—haveshortercoastlinesbutmoredenseeconomicactivityontheircoastlines.

Evidencealsoindicatesthatalreadydisadvantagedneighborhoodsareparticularlyaffectedbythedirectimpactsofclimatechange.BleemerandvanderKlaauw(2017)findthatafterHurricaneKatrina,declinesinhomeownershipofaffectedhouseholdsweremarkedlysmallerforindividualsfrompredominantlywhiteneighborhoodsthanforhouseholdsfromminorityneighborhoodsandalso,forindividualswithhighcreditscoresthanthosewithlowcreditscores.Anumberofstudieshavealsodocumentedthathomesinareasofhigherfloodriskareoften

discountedaggressivelyasadirectconsequenceofbeingexposedtothisfloodrisk(seeBinandPolasky,2004;Binetal.,2008;Kousky,2010;andAtreyaetal.,2013).

Lin,MaandPhan(2021)providesurveyevidencethatminoritiesarealsodisproportionatelylikelytobelocatednearenvironmentallyhazardoussitesdespitebeingmoreworriedaboutpollution.Multiplejournalisticinvestigations(seeforexample,PlumerandPopovich(2020))documentthatlow-incomeandminorityareasofmanyU.S.citieshaveconsiderablyfewergreenspacesandconsiderablymoreconcretepavingthandomoreaffluentandnon-minorityareas,andthattheseareasarealsoconsiderablyhotter.Giventhattheclimatedamagefunctionislikelyconvex(Hsiangetal.2019),similarincreasesintemperatureinwarmerlocalitiesincitiesarelikelytoleadtogreaterdamagestoproductivityandhealththantheywouldincoolerareas.Inparticular,HeilmannandKahn(2019)documentthattheincreasedurbanheatislandeffectinminorityareascontributestohigherratesofviolenceintheseareas.

GillinghamandHuang(2021)findthatairpollutionfrommaritimeportshasuneveneffectsonhealthoutcomesacrossracialgroups.Increasesinairpollutionstemmingfromweather-drivenvesselstaysinporthaveleadtothreetimesasmanyhospitalvisitspercapitaamongBlackindividualsinnearbycommunitiesasamongwhiteindividuals.AsclimatechangehasincreasedtheforestareaconsumedbywildfiresintheWest(AbatzoglouandWilliams2016),andasforestcombustiongeneratesparticulatematterthatpollutestheair,thehealthdamagesfromclimate-changedrivenairpollutionwillbedistributedunevenlyacrossregions.Pollutionfromforestfirescanaffectregionsfarawayfromthelocationoftheoriginalfire,forexample,pollutionfromtheBootlegFireinOregonreachedChicagoandNewYorkinJuly2021(Schwartz2021),implyingthatWesternwildfireswillcontinuetoaffectnotjustthePacificwestandtheNorthwest,butalsoareasfarawayfromthisregion.

B.DistributionofMortalityRisks

Humanbeingsareoptimizedforrelativelymildtemperatures,soextremeheatorcoldtendstoresultinexcessdeaths.Climatechangemayaffectmortalitythroughincreasingtheprevalenceofextremeheat,decreasingtheprevalenceofextremecold,orincreasingtheprevalenceofextremetemperaturesthroughgreatervarianceintheweather.Hsianget.al.(2017)lookatthespatialdifferenceinall-causemortalityratesacrosstheUnitedStates.Theyfindthatwarmingreducesmortalityincoldnortherncountieswhileitincreasesmortalityinhotsoutherncounties(Exhibit2).3Theresultingpatterninducessubstantialincreasesinmortality(upto80per100,000)intheU.S.SoutheastaswellaspartsoftheSouthwest(forexample,southernArizona),smallermortalityincreases(20per100,000)atthelatitudesofMarylandandMissouri,andmortalitydecreasesinmostoftheNortheast,thenorthernpartoftheMidwest,someareasofthePlainsandMountainstatesandinthePacificNorthwest.

C.DifferentialProductivityShocksbySector

Anotherwayinwhichclimatechangecouldincreaseinequalityisbydirectlyloweringproductivityincertainindustriesthatemploythepoorandonwhichthepoorrely,forexampleagriculture.Decliningagriculturalyieldsmayresultinincreasedfoodprices(Crane-Droeschetal.2019)andgiventhatlow-incomecommunitiesspendahigherproportionoftheirbudgetonfood,thiscanhavedisproportionateeffectsonthem.However,DeschenesandGreenstone(2006)arguethat,onaverage,theeffectsofclimatechangeonU.S.agriculturalproductivityareambiguous,withthebestevidence(basedonpaneldataassociationsbetweenweatherandagricultural

Theseestimatesincludenotonlythedirecteffectsofchangingtemperaturesbuttheindirecteffectsofunequaladaptationcapabilities.

outcomes)beingconsistentwithverymodestdeclines.Suchanaverageresultisreassuringfromthepointofviewoffoodprices(which,inafrictionlessmarket,shoulddependonlyonaverageagriculturalproductivity).Nevertheless,theeffectsofclimatechangeontheagriculturalsectormayinfluenceinequalitythroughotherchannels.TheFourthNationalClimateAssessment(Carteretal.2018)statesthatcountiesintheSoutheastwilllosethegreatestnumberoflaborhours,onaverage,relativetocountiesinotherU.S.regions,largelybecausetheydisproportionatelyrelyonruraleconomicactivitythatisparticularlysensitivetochangesinheatandhumidity.Moregenerally,Hsianget.al.(2017)showthatclimatechangewillgenerateagriculturalproductivityimprovementsathigherlatitudesandagriculturalproductivitydeclinesatlowerones.Exhbit3depictstheredistributioninagriculturalyieldsacrosstheUnitedStates,wherethemostnegativeimpactisseeninpredominantlylower-incomecountiesintheSouth.

Likefood,energyisanimportantcomponentofthebudgetofthepoor.Hsiangetal.(2017)providesevidencethatenergyexpendituresarelikelytodisproportionatelyriseintheSoutheastasaconsequenceofclimatechange,whichmaydisproportionatelyaffectlow-incomeindividuals.

Itisworthconsideringthedirecteffectsofclimatechangeoneconomicactivitymoregenerally.Roth-TranandWilson(2020)investigatetheeffectofnaturaldisastersandfindevidenceofincreasesinpercapitapersonalincomeoverthelongrun,althoughtheyfindconsiderableheterogeneityinimpactsbypre-disastercountyincome.Differentiatingbyquartilesofpre-disastercountyincome,theyfindthatcountieswithbelow-medianpre-disasterincomepercapitadidnotseeanincreaseuntilsixyearsafterthedisasterwhileabove-mediancountiessawanincreaseoneyearafterthedisaster.Therefore,climatechangemaymakethedistributionofeconomicactivitymoreunequalevenwithoutaffectingitonaverage.

D.DistributionofClimateEffectsonConflict

Additionally,thereisresearchshowingthatextremeclimateconditionsincreaseconflictandcrime.Burkeet.al.(2015),inameta-analysisoffifty-fivestudiesencompassingdevelopedanddevelopingcountries,includingtheUnitedStates.Theyshowthatdeviationsfrommoderatetemperaturesandprecipitationpatternssystematicallyincreaseconflictrisk,withcontemporaneoustemperatureshavingthelargestaverageimpactoninterpersonalandintergroupconflict.Theyalsofindthatinlow-incomesettings,extremerainfallevents—toomuchortoolittlerain—thatadverselyaffectagriculturalincomeareassociatedwithhigherratesofpersonalviolenceandpropertycrime.Relatedly,Hsianget.al.(2017)presentthespatialdistributionoftheexpectedeffectofclimatechangeonpropertycrimeandviolentcrimeratesacrosstheUnitedStates(Exhibits4-Aand4-B).TheyfindthateffectsonviolentcrimesisuniformacrosslocationswhiletheeffectsonpropertycrimesaremoreconcentratedintheNorth.Hence,risingcrimeislikelytoworkagainstthetendencyforregionalinequalitytoincrease,whichweobservefromtheotherchannelsconsidered.

E.Summary

Theliteraturewereviewedshowsthatphysicalrisksfromclimatechangeexacerbateinequalitybyincome,raceandgeography,withtheU.S.Southeastexperiencingmoredirectphysicalrisksthanotherpartsofthecountry.Thesephysicalrisksfromclimatechangetaketheformofdifferencesineffectsonmortality,housing,consumerfinance,conflict,andgeography.Takingintoaccountalargenumberoffactorsincludingagriculturalyields,mortality,energyexpenditures,riskstolabor,coastaldamage,propertycrime,andviolentcrime,Hsiangetal.(2017)computesameasureoftotaldirectdamagesfromclimatechangeforU.S.counties,whichisillustratedinExhibit5.WarmingduetoclimatechangeresultsinanettransferofvaluefromSouthern,Central,andMid-AtlanticregionstowardsthePacificNorthwest,theGreatLakes

region,andNewEngland.ThisechoestheconsensusthatdamagesfromclimatechangewillbedistributedveryunevenlyacrossdifferentpartsoftheUnitedStates.ThepreexistinginequalitybetweentheU.S.Southeastandtherestofthecountrywillpossiblybeexacerbatedbyclimatechange.Wenextturntotransitionrisksandreviewwhethertheyhaveunequaleffectsacrosspopulationsandgeography.

II.DoAdaptationstoClimateChangeIncreaseInequality?

Adaptation,accordingtotheIntergovernmentalPanelonClimateChange(IPCC),isdefinedas“adjustmentinnaturalorhumansystemsinresponsetoactualorexpectedclimaticstimuliortheireffects,whichmoderatesharmorexploitsbeneficialopportunities”(Parryetal.2007).Thiscouldbeunderstoodasadjustmentsdoneintermsofchangestoexistingtechnologiesorinnovatingnewtechnologies,orasadecisiontomigrateawayfromareaswithhigherclimaterisk.

Besidestheunequaldistributionofthedirectphysicalimpactsofclimatechange,unequalreactiontotheseimpactsplaysatleastaslargearoleinshapingthewayinwhichclimatechangemayaffectinequality.Infact,Dell,Jones,andOlken(2012)findthatthemagnitudeofshort-runeffectsoftemperatureoneconomicactivityissolargethatabsentadaptation,justeightyearsoftemperaturedifferencesacrosscountrieswouldbesufficienttoexplainpresent-daycross-countryincomedifferences.Dell,Jones,andOlken(2008)findthatcountrieswithhigherGDPexperienceverylittlesensitivityofeconomicactivitytotemperatureandprecipitationchangesbecauseofbetteradaptation(suchas,potentially,airconditioningandotherinfrastructuretoreduceexposuretoextremeheat),whilepoorercountriesseeconsiderablylargereffects,bothtothelevelofoutputandtotheirlong-rungrowthrate.ThefindingsofthesestudieshaveimplicationsfortheU.S.

regions,suggestingthatpoorerregionsintheUnitedStates—specifically,theSouth—mayseelargerlevelandgrowtheffectsfromclimatechangethanwouldricherU.S.regions.

A.Innovation

Thereisevidencethatsomeadaptationtoclimatechangehasproceededinwaysthatreducedinequality.Barrecaet.al.(2016)focusattentiononthespreadofhealth-relatedinnovations:residentialelectricityandresidentialairconditioning.Theseinnovationshavehelpedmitigatethehealthconsequencesofhottemperatures,especiallyforpopulationsthataremorevulnerable,forexample,individualsaged65oraboveandBlackresidentsrelativetowhiteresidents(Barrecaetal.(2016)).Electrificationhasenabledawidevarietyofinnovationsincludingfans,refrigeration,andairconditioning.Airconditioninghasmadeitpossibletoreducethestressonhealthduringperiodsofextremeheat.

Apartfromthis,increasedaccesstohealthcarehasenabledbothpreventivetreatmentandemergencyintervention,suchastheintravenousadministrationoffluidsinresponsetodehydration.Anotherinnovationthathasgarneredattentioniselevatinghomesinflood-proneareastoreducepotentialdamage.However,accesstosomeoftheseadaptationsislikelynotequallydistributed,rathertheytendtovarymarkedlybyincome(forexample,itcostsnearly$50,000toelevateanaveragehouse(Fixr2021),asubstantialfractionofmedianhouseholdincome).

B.LaborMarketEffects

AstheU.S.transitionsfromahigh-carbontoalow-carboneconomy,changesinthelabormarketbecomeanimportantchannelthroughwhichadaptationtoclimatechangemayaffectinequality.Acemogluetal.(2012)andCruz-AlvarezandRossi-Hansberg(2021)documentthat

suchatransitionisexpectedtotakeplacetoavoidanenvironmentaldisasterorenergyresourcedepletion.MetcalfandStock(2020)usevariationinEuropeancarbonpriceadoptionacrossspaceandtimetoconcludethattheeffectsofplausiblecarbonpriceincreasesintheUnitedStatesonemploymentshouldbeminor,whileHafsteadandWilliams(2018)reachasimilarconclusionusingacomputablegeneralequilibriummodel.However,theaggregateresultmasksconsiderablevariationinjobdestructionandjobcreationacrossindustries.Greenstoneetal.(2002)andCastellanosandHeutel(2019)showthatjobsinfossil-fuelindustriesarelikelytobearthebruntofthejobdestruction,requiringsubstantialreallocationofworkersifemploymentoverallistoremainsteady.Vonaetal.(2015)documentthatenvironmentalregulationwillreward“greenskills,”amongwhichare“high-levelanalyticalandtechnicalknow-howrelatedtothedesign,production,managementandmonitoringoftechnology,”whichlikelymayincreaseinequalitybyrewardingalreadyhighlyvaluedandexpensive-to-obtainskills.Poppetal.(2020)considertheimpactofthegreencomponentofspendingundertheAmericanRecoveryandReinvestmentAct,findingthatitcreatedfewerjobsthansimilarnon-greencomponentsoftheact,andthatwhilethejobsweremostlyinmanuallabor,theystillrequiredsomecollegeeducationanddidnotchangeequilibriumwages.Therefore,theliteratureseemstoprovideevidenceforonlymarginalchangestoaggregateemployment,withgrossjobscreatedlikelytorequirehigherskills.

C.EffectsofClimate-Change-InducedMigrationonInequality

Anotherimportantfactortoconsiderismigration,andhowunevenmigrationpatternsfollowingadisastermaybeacrossdifferentsocialgroups.Individualsfromhigh-incomeareasaremorelikelytomovefollowingadisaster,justashouseholdsinpredominantlywhiteneighborhoodsaremorelikelytomigrateafteradisaster(BleemerandvanderKlaauw(2017);Roth-TranandLynn-Sheldon(2020)).Interestingly,Fussell,Sastry,andVanLandingham(2010)actuallyshow

thatafterHurricaneKatrina,BlackresidentsreturnedtoNewOrleansatamuchslowerpacethanwhiteresidents.ThedelayedreturnwasdrivenbythemoreseverehousingdamagethatBlackresidentshadfacedbecausetheytendedtoliveinareasthatexperiencedgreaterflooding.Moreover,climatechangemaybeleadingformerlyminoritycommunitiestogentrifyatamorerapidrate.Forexample,duetotheirrelativelyhighelevationfortheMiami-Dademetroarea,traditionallyminorityneighborhoods,suchasLibertyCityandLittleHaiti,areseeingrisingpropertyvaluesthataremakinghomesunaffordableforresidents,reflectingthenewpreferenceofhighelevation(seeHarris2018).Thiscombinationofrisingpricesinhigherelevationneighborhoodsanddecliningpropertyvaluesinmoreexposedcoastalareasmayfurthercontributetothecycleofdisproportionateexposurestorisingsealevelsinlow-andmoderate-incomecommunities.BakkensenandMa(2020)alsofindclearevidencethatlowincomeandminorityresidentsaremorelikelytomoveintohigh-riskfloodzones.Thesefindingshighlightthedifferencebyincomeandraceinboththeabilitytomigratetobetteroutcomesafteranegativedisastershockandalsoinbeingpushedouttolocationsmoresusceptibletoclimaterisk.

Moregenerally,migrationislikelytobekeytomitigatingthedirectimpactsofclimatechange,soitisimportanttoconsiderthebroadimplicationsofmigrationforinequality.AlvarezandRossi-Hansberg(2021)findthatoptimalmigrationresponsestoclimatechangewouldentaillargepopulationflowsfromtheglobalSouthtotheglobalNorth(includingtotheUnitedStates)andwouldhalvethedeclineineconomicactivitythatwouldbecausedbyclimatechangeintheabsenceofmigration.Therefore,itispossiblethattheUnitedStateswouldreceivesubstantiallymoreimmigrantsfrompoorercountriesbecauseofclimatechange,withtheU.S.SouthwestalikelyinitialdestinationformanyofthemasitisgeographicallyclosesttotheU.S.landborderwithMexico.Mechanically,aninflowofindividualsconsiderablypoorerthantheaverageofthe

receivingpopulationshouldincreaseinequality,andCard(2009)suggeststhatthesemechanicaleffectscreatesmallbutpositiveincreasesininequalityingeneralequilibrium.However,thereisdebateonwhetherlow-skillimmigrationlowerswagesinlow-skilloccupations,with,forexample,Borjas(2017)andPeriandYasenov(2015)takingopposingviews.Nevertheless,themechanicaleffectsofimmigrationaloneshouldcontributetohigherinequalitywithinU.S.borders,thoughlikelylowerinequalityintheworldtakenasawhole.

D. Summary

Societalandeconomicadaptationstoclimatechangewilltakemanyforms.Althoughtechnologicalinnovationsandadaptationsmayimprovesomecommunities’resiliencetoheatanddisease,