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Home    |   Print Edition   |   Public Investment in Climate Resiliency: Lessons from the Law and Economics of Natural Disasters

Public Investment in Climate Resiliency: Lessons from the Law and Economics of Natural Disasters

Oct 02, 2022

Donald T. Hornstein

Volume 49 (2022) - Issue 1

This Article takes issue with an important claim in the public choice and climate disaster literature: that American political markets will not allow appropriate investments in disaster preparedness and prevention, even when those investments are cost-benefit bargains. The claim is significant because the costs of climate disasters in the twenty-first century are estimated to be in the trillions of dollars due to the presence of legacy greenhouse gases in the atmosphere. Thus, even assuming a sustained, successful global campaign to limit future greenhouse gases, the ingredients for decades of droughts, wildfires, storms, and floods are already locked into the atmosphere. Yet, for fifteen years, public choice economists have modeled disaster politics as a political commons riddled with externalities that lead to tragic underinvestment in disaster preparedness and resiliency.

This Article is the first to offer a sustained critique of the public choice claim. It argues that the claim has both theoretical and empirical limitations. As importantly, resiliency faces challenges that the public choice claim masks. These include the possibility of other institutional constraints standing in the way of optimal resiliency investments, as well as the possibility of resiliency haves and have-nots: of wealthier communities even going on resiliency “binges” while poorer communities suffer disinvestment and decades of disaster-augmented poverty. The Article invites a new wave of scholarly attention to resiliency’s prospects.