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Factors that lead to success or failure in coastal relocation schemes 1

Allan Young, Churchill Fellowship 2015

INDEMNITY AND WARRANTY

THE WINSTON CHURCHILL MEMORIAL TRUST OF AUSTRALIA

Report by‐ Allan Young‐ 2015 Churchill Fellow

To examine the factors that lead to success or failure in coastal relocation schemes

I understand that the Churchill Trust may publish this Report, either in hard copy or on the

internet or both, and consent to such publication.

I indemnify theChurchillTrustagainstanyloss,costsordamagesitmaysufferarising out of any claim

or proceedings made against the Trust in respect of or arising out of the publication of any

Report submitted to the Trust and which the Trust places on a website for access over the

internet.

I also warrant that my Final Report is original and does not infringe the copyright of any person,

or contain anything which is, or the incorporation of which into the Final Report is, actionable for

defamation, a breach of any privacy law or obligation, breach of confidence, contempt of court,

passing‐off or contravention of any other private right or of any law.

SIGNED Allan Young DATE 20 September 2017



EXECUTIVE SUMMARY

The beach has become a significant part of contemporary Australian identity. We are drawn to the coast to live or to holiday, and we have also created a fairly robust 'salt water economy'. It is important to us for many reasons.

Sandy shorelines are however dynamic by nature. They migrate and change in response to the actions of wind and waves. Often, the migration of a shoreline is landward and we witness this occasionally through dramatic shoreline erosion during a storm. Our problem is manifested when that shifting shoreline encroaches on fixed assets such as roads, utilities or houses.

The emerging challenge, not just for Australia but for most nations with a coastline, is the amplification of the 'coastal squeeze' problem by sea level rise.

Our options in response to coastal hazards are well known ‐ we can protect, accommodate or relocate.

Of those options, relocation (sometimes called planned retreat) is broadly considered the most difficult. Yet virtually all coastal experts concede that, for technical, environmental, social or financial reasons, it will be an inevitable part of our response. What is required, therefore, is some serious consideration of what 'products' can service the need for relocation and what factors currently enable or impede the role of relocation as a necessary, if unwanted, coastal management solution.

In May and June of 2017, I met with coastal experts in the US, Caribbean and UK to discuss their experiences and gain some insights into our shared challenge.

The findings pointed to three main areas of influence ‐ the big picture issues which shape the operating environment for coastal management; the range and limitations inherent in current relocation schemes; and behavioural biases which need to be considered in decision making.

The Big Picture

Relocation is currently impeded by some government policies and practices which distort the market and create a moral hazard by encouraging people to continue occupation of property in hazardous locations.

Chief among these is the practice of government buy outs at pre‐hazard prices and premium‐to‐market values. This can work as a means to stimulate relocation at a whole‐of‐neighbourhood scale but it some real downside risks. A buy out will artificially ratchet‐up the value of at‐risk land and creates a false market. It also reinforces a perception that all loss and liability will be absorbed by government if and when catastrophe strikes . The view expressed by many practitioners is that the coastal property market needs to be allowed to price‐in the risk, and government intervention needs to be minimised.



It was also recognised that public funding will be significantly less than the amount required to acquire all at‐risk coastal property.

The type of government acquisition which can be implemented without the distorting effects of buying at pre‐hazard prices is managed realignment. These schemes are more prevalent in regional areas, not urban centres. Managed realignment represents a more sustainable use of public money and is capable of significant risk reduction and other benefits, without the downside risks of buy outs.

Buy out schemes remain the most common form of relocation in the US and UK. A starting point might be to (a) allocate money to managed realignment in preference to buy outs and (b) where buy outs are needed, begin to deal in more actuarial values.

The other significant market distortion in the US is the National Flood Insurance Program (NFIP). The structure of the NFIP means that for many properties at high risk of tidal inundation or flooding, premiums are significantly discounted, and repetitive loss properties are rebuilt multiple times in areas frequently exposed to hazards. The NFIP dilutes the price signal so much that there is simply little incentive to move out of the high risk location.

Although Australia does not have an equivalent to the NFIP, there is a need to understand the flaws inherent in such as scheme if there is ever any contemplation of introducing a similar arrangement locally.

The overall finding is that for relocation to be a viable option, the externalities of protection works need to be fully internalised and the current market distortions, generally created through government interventions, need to be mitigated.

The schemes

The key observation regarding relocation schemes is that we do not have a very mature, diverse or sophisticated marketplace. Although there are numerous schemes which can theoretically be applied, such as transferrable development rights, land swaps, etc, the reality is that one form of relocation crowds out all other (less generous) methods ‐ buy outs by government.

The dominant use of buy outs as a solution needs to be seen in the context that buying out all property exposed to coastal hazards is completely unaffordable via the public purse. Cost alone will limit its application. There are also perverse incentives created by government buy outs, as noted above. Buy outs will always have a role but their use is fraught with moral hazard.

One other discovery during my trip was that set back lines, which are normally badged as a means of achieving longer term relocation are more likely to serve as a precursor to protection works. Set back lines might be better conceptualised as a means of accommodating a hazard.

Rolling easements offer an alternative to government buy outs but the availability of more favourable pathways for private landowners, such as litigation or premium‐to‐market value buy outs, currently limit the success of rolling easements.



Government buy outs at market premium prices are often the only form of relocation evaluated in a cost benefit analysis of coastal management options, and the high cost of coastal property (somewhat ironically underwritten by government buy outs) tends to make protection options more appealing, at least in the short term.

The human factors

One of the main behavioral patterns which impedes coastal relocation is the tendency to defer decision‐making until the time of crisis. When a storm event causes erosion or inundation which threatens assets such as houses, the response is invariably to install temporary protection works. The absence of a pre‐identified course of action, such as the relocation or abandonment of the asset, a point‐of‐crisis decision will nearly always lead to protection.

Related to this pattern of decision‐making at the time of a storm or other event, is 'path dependency'. A very common scenario is that when there is a decision made to install protection works, even on a temporary basis and using materials such as geotextile bags, that initial decision sets the pathway. This is because there is a desire to see a decision validated by a subsequent decision consistent with the first, even if it is not the optimal choice or in our interests. There is also a reluctance to regard the cost of the protection works as a sunk cost. Economists refer to this as the 'sunk cost fallacy'.

The absence of any mature or sophisticated products to promote or enable relocation also has a feedback loop into compliance and enforcement. Where protection works are unauthorised, compliance and enforcement is difficult because it seems unreasonable in the absence of a meaningful and available alternative. The low level of compliance action further signals an acceptance of unauthorised works and incentivises further unauthorised works.

Virtually all of the key factors that impede success in coastal relocation are part of a feedback system which reinforces the current bias towards protection works. It is broadly suggested that Australian jurisdictions start leveling the playing field by firstly adjusting policies and practices to create an operating environment where relocation can be contemplated. The market will then develop a broader spectrum of innovative relocation products to address the need. Finally, an awareness of inherent biases in our behaviour and decision‐making will help avoid the pitfalls of path dependency.

Key words

Coastal management; Sea level rise; Beach erosion; Coastal hazards; Risk management; Behavioural economics; Decision science; Flooding; Managed retreat; Managed realignment



CONTENTS

ITINERARY ............................................................................................. 6

ACKNOWLEDGEMENTS ........................................................................ 8

INTRODUCTION .................................................................................... 9

The challenge we face .......................................................................... 9

The context ......................................................................................... 10

Relocation in the broader coastal management framework ............. 12

The structure of this report ................................................................ 13

PART A: THE SCHEMES ..................................................................... 14

Government buy outs ......................................................................... 14

Managed realignment ........................................................................ 15

Normal buy outs ................................................................................. 17

Set back lines ...................................................................................... 23

Rolling easements .............................................................................. 25

Permanent temporary works ............................................................. 26

PART B: THE BIG PICTURE ................................................................ 29

Limits to public sector capital ............................................................. 30

The National Flood Insurance Program .............................................. 32

Other market distortions. ................................................................... 34

PART C: THE HUMAN FACTORS ....................................................... 35

Relative values and sensitivities ......................................................... 42

CONCLUSION ...................................................................................... 44

BIBLIOGRAPHY .................................................................................... 46

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PEOPLE

HAWAII CALIFORNIA BARBADOS Ms Blanche Chong Prof Gary Griggs Dr Leo Brewster Dr Chip Fletcher Dr Charles Fletcher Dr Adrian Cashman Mr Sam Lemmo Mr Benjamin Grant Ms Justine Nihipali UNITED KINGDOM Ms Rebecka Arbin NORTH CAROLINA Dr Luciana Esteves Ms Sandy Ma Prof Robert Young Mr Marin Vitanovic Ms Abbey Seitz Mr Blair Tormey Mr Tim Callaway Mr Jim Lyon Mr Andy Coburn Mr Jay Koh Ms Kathy Sokugawa Ms Katie McDowell Peek Mr Adam Hammerton Mr Timothy Hiu Ms Holli Thompson Mr Stephen Webster Mr Eugene Takahashi Ms Kathryn Allen Mr Crawford Hollingworth Ms Katia Balassiano Mr Matthew Gonser FLORIDA Mr Dolan Eversole Dr Keren Bolter Mr Kem Lowry Mr David Dixon Mr George Atta Mr Thomas Ruppert



ACKNOWLEDGEMENTS It has been an honour to receive a Churchill Fellowship and I firstly acknowledge the dedication and professionalism of the Trust and the many people who make it all possible.

This fellowship has enabled not only crucial research into essential coastal management issues but has also enabled international collaboration and professional linkages which will bring benefits for many years. I would like to acknowledge the work of my many hosts during the trip. They were generous in the extreme with their time and support. I was made to feel welcome everywhere I went and I was inspired by their ideas and commitment to the future of coastlines globally.

I express my thanks to my referees Emeritus Professor Bruce Thom, University of Sydney, and Mr Angus Gordon. Both are considered to be thought leaders in all matters coastal and who share the passion common amongst many coastal professionals to achieve great outcomes in the most challenging of contexts.

My former colleague and coastal policy professional, Ms Santina Camroux, provided much needed advice and guidance to help refine the research findings into a coherent report.

Several weeks away from work and family do not happen without significant support and sacrifice. I therefore thank EMM Consulting Pty Ltd for recognising the value in supporting the fellowship, and a big hug to all of my gorgeous family who seemed to cope surprisingly well.

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sufficient to note that any problems we face associated with coastal squeeze are likely to be amplified by any rise in sea level. It is conceivable that the various drivers which shape the coastline may, in the future, create situations where a shoreline may advance seaward. It seems a reasonable assumption however that in most situations, a rise in sea level will cause shorelines to migrate landward. In other words, sea level rise will exacerbate the problem of coastal squeeze.

If action was taken today to reduce greenhouse gas emissions to a level which would immediately prevent any additional global warming, there will still be sea level rise in the foreseeable future. This is because the warming effects of emissions already in the climate system will take decades to stabilise and the prospect of approximately 1 metre of sea level rise is now unavoidable. Emissions reduction can slow the pace of the rise in sea level, but a rise of approximately 1 metre is already locked in.

There is our problem ‐ the inherent difficulty of coastal hazards interacting with fixed coastal assets due to coastal squeeze, and the prospect of that problem affecting more assets, more often, in coming decades.

The context It has been well established that there are three main ways to deal with coastal squeeze situations:

• Protect; • Accommodate; or • Relocate.

We can decide to leave the asset where it is and to do something to fortify against the encroaching hazard. This can be through 'hard' protection works such as sea wall, revetments, groynes or artificial reefs. It can also be through 'soft' protection such as beach renourishment.

We can make adjustments to assets to accommodate the hazard. This can be achieved through design changes, such as the elevation of a building, so that if the hazard manifests itself, the damage to the structure is avoided or minimised.

We can also decide to move the asset away from the encroaching hazard or replace the asset in a location less exposed to hazards. This response is also sometimes known as retreat, managed retreat or realignment.

The dominant response has historically been to fortify assets. This is neatly summarised by James Titus (2011) who notes "Very little developed land has been given up to the rising sea".

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This is starkly contrasted with the consensus amongst coastal professionals, and the occasional politician, that relocation will inevitably be a necessary management response in an increasing number of locations and involving an increasing number of assets.

The difference between those views that relocation is 'impossible' on one hand but 'inevitable' on the other is explained by Adger et al (2008) as a problem based in values and scale. As the Adger paper notes:

The desirable adaptation strategy to rising sea‐levels as perceived by an individual householder perched on an eroding cliff‐line seems clear cut: invest in beach replenishment or in hard defensive structures. For each coastal local authority, responsible for 100km or more of shoreline, a different set of values and governance issues come into play. For central government with a responsibility for the public purse and a national perspective, the values and the means for resolving value‐conflicts are different again. Although all parties tend to appeal to principles of sustainability, the residents directly affected articulate victimhood and vulnerability, while central government priorities centre around fairness, cost‐effectiveness and integrated and long‐term planning.

The analysis by Adger fits with the different perspectives encountered on the Churchill Fellowship. It is probably a sound framework to begin the task of figuring out why some schemes have worked and why others haven't worked when it comes relocation.

If relocation is to play a more prominent role in coastal management, then I wanted to look for early lessons from those who, like Australia, are grappling with the inevitability of a thing nobody particularly wants.

Relocation in the broader coastal management framework Relocation is used in its broadest definitional sense here. It includes everything that is not a 'protect' or 'accommodate' option. The study is, however, directed to relocation schemes. A scheme implies a formal arrangement characterised by a degree of forethought and planning, supported by a budget or funding agreements, and capable of being implemented. A scheme may be a program under the auspices of government but can also include private sector or community level schemes.

It might reasonably be expected that, given this very broad definition, there might be evidence of a range of relocation methods and schemes deployed in various locations. The literature provides an abundance of theoretical methods by which relocation can be achieve but the experience in Australia is that the vast majority of relocation schemes rely on a single strategy ‐ buy outs by government.

It is not so much that schemes based on a buy out by government have been deployed in great number. It is more the case in Australia that relocation based on buy out by government is usually the only relocation option that is considered (as opposed to implemented) when a community is weighing up methods to deal with a coastal hazard situation.

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To establish some coherence and order to the presentation of those findings, the report will look at themed outcomes rather than a location‐by‐location snapshot. The findings are presented in three groups:

• Part A: The schemes • Part B: The big picture • Part C: The human factors

PART A: THE SCHEMES In theory, there are several arrangements which lay claim to being relocation strategies. The list includes:

• Buy outs by government; • Set back lines; • Rolling easements; • Transferable development credits; and • Land swaps.

Not all of these options were being implemented in the locations I visited. Many of the meetings held during the Churchill trip did however elicit some evidence and anecdotes of schemes being trialled or implemented elsewhere.

Without a doubt the marketplace for relocation is dominated by government buy outs. We shall take a look at that first.

Government buy outs In the category of relocation, this is the market heavyweight. Just as it is in Australia, the acquisition of vulnerable property by government ‐ often labelled a 'buy out' scheme ‐ is the most common form of relocation scheme in the US and UK.

From a theoretical perspective, it is often said, as it is in the NOAA 2010 publication Adapting to Climate Change: A Planning Guide for State Coastal Managers, that "the most effective way to reduce losses is to acquire hazard‐prone properties, both land and structures, demolish or relocate structures, and restrict all future development on the land".

It sounds fairly straight‐forward, and most people seem to be aware of it as an option. Why then did I not find universal support for buy out schemes when I spoke to coastal managers in various jurisdictions?

The answer seems to turn on what type of acquisition scheme we are talking about. All buy outs are not the same. Variables include the scale, purpose and planning for the acquisition, and the value paid for the land acquired.

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If the neighbouring properties have protection works (authorised or not) then the vacant land may be subject to increased erosion due to flanking (ie 'end effects') and there will be inevitable pressure from neighbours to also protect the now vacant allotments. Neighbours will want to see no increase in their exposure to a hazard such as erosion or flooding. In the case of large scale projects, such as the Medmerry realignment, the acquired land was capable of supporting natural mitigation measures which made neighbouring property less prone to flood and inundation. This is not easy to achieve at the scale of individual residential lots.

Government initiatives to opportunistically acquire at‐risk land as and when the lots are offered for sale can be a very expensive exercise because the costs of maintaining services, and possibly protecting the acquired parcels, is additional to the cost of acquiring the land. This can also extend over significant periods, meaning that the government land owner is essentially paying for two solutions at once. The original idea, no matter how appealing at the start, will be prone to stalling and then losing momentum, which serves as a feedback mechanism to weaken community and political support, and so it continues through an unfortunate spiral.

Beyond the desire to keep momentum and vision in a program of buy outs, there are reasons why a relocation scheme may seek to relocate an entire neighbourhood in one simultaneous arrangement. One of the main reasons is that a handful of hold outs in a precinct earmarked for relocation will still require utilities, road access and other services, including emergency response. That situation could conceivably persist for a significant period. This is a cost to government on top of the costs associated with the acquisition of the land. The other benefit of a concurrent whole‐of‐precinct buy out is a social one. If the fabric of the community dissipates lot by lot as individuals choose to leave, then those left behind become more vulnerable through the absence of normal social networks and community support.

Acquisition of at‐risk coastal land by government occurs in most jurisdictions. It has occurred in Australia, notably at a location once known as Sheltering Palms, near current day Brunswick Heads. The village of seventeen properties was, over the course of a few years, bought out by government after it was devastated by storms in the 1970s.

A lot has changed since the 1970s, most notably land values in coastal locations. Cost has become one of the key sticking points for contemporary buy out schemes. Not only cost, but the related question of 'Who pays?' The other equally important question is 'who benefits? Overall there is increasing interest to determine whether but out schemes can be said to be successful.

Researchers at Western Carolina University pointed to a paper prepared by Devon McGhee "Were the Post‐Sandy Buyouts on Staten Island Successful in Reducing National Vulnerability" (2017). The intent of a buy out program is to relocate people and assets away from the vulnerable location where they currently live and resettle them in a non‐vulnerable location elsewhere. The research found that in many cases, those taking up the buy out offer on Staten Island relocated into areas where there were other vulnerabilities or even the same vulnerabilities but in a different part of the coastline. The analysis concluded that:



Significant uncertainty remains with respect to whether or not the $190 million Staten Island buyout program met its objective of reducing the vulnerability of people and property to coastal flood hazards. It finds that over 20% of buyout participants moved to an area at least as exposed to coastal flood hazards as the buyouts areas in Staten Island. Further, 321 of the 323 buyout participants studied relocated to an area with higher levels of poverty. Two‐thirds of the sample moved to an area with a higher proportion of elderly residents. On average, buyout participants saw a 26% increase in their overall vulnerability score following participation in the program.

It may be premature to pass judgement on the success or otherwise of the Staten Island relocation scheme. There is also an absence of agreed performance measures by which some objective analysis might be made.

I think care needs to be taken when assessing the success or failure of such initiatives. In circumstances where so many elements work against relocation schemes, it would be unreasonable to expect perfection. The fact that relocation actually occurred needs to be recognised for the remarkable feat that it is. Better perhaps to look for improvement opportunities and better ways to approach the challenge next time. Care needs to be taken in criticising buy outs to also not damage the overall relocation 'brand'.

Value paid

Across the USA, there were two value‐related issues which drew particular attention when government officials and academics were invited to discuss government buy outs.

Firstly, there was a very clear sense that public sector funds already fall well short of the amount of capital needed to buy out all at risk properties, and that the quantum of required capital will only increase with time. Even the buy out on Staten Island by comparatively wealthy jurisdictions, aided by federal money, has its limitations and will not be able to fund acquisition of the most vulnerable communities in all of New York and New Jersey. Staten Island is only one of the areas in New York City exposed to coastal flooding and storm surge. There are other areas such as Howard Beach and Broad Channel where there is no buy out on offer, no long term plan and communities will, in all likelihood, also need to relocate in the future.

Secondly, buy outs by government tend to be struck at 'pre hazard' values and even then with an added premium. Purchases by New York State in Staten Island, for example, were at pre‐hazard price plus 15%. This has a distorting effect on the market. By artificially ratcheting up prices for property in hazardous areas, the government creates a false market which it must then meet at the time of subsequent acquisitions for any buy out program.

This tendency to buy out properties at 'pre‐hazard' price serves as an incentive for the owners of land which is exposed to coastal hazards to continue to intensify their development on that land, such as extending the structure or rebuilding a more substantial dwelling, because the government has demonstrated that owners will not suffer loss by remaining in the hazard area nor by investing in further development of the at‐risk land. This creates a perverse incentive. If the aim is to reduce risk, then this has the opposite effect. If private landowners have an expectation that government will pay the full 'pre‐hazard' value, plus a premium in the event



that their home is lost, then government is simply underwriting the liability for actions by private land owners which elevate risk.

Ideally, landowners with assets in an at‐risk location should be incentivised to move somewhere else. This generous arrangement by government is, however, an incentive to stay put and rely on a future acquisition by government. The thing that is shared between the US, UK and Australia is that buy outs by government at a premium to actual market value will effectively crowd out all other (less generous) relocation schemes.

The seemingly inexorable lift in coastal property prices was viewed by many of my Churchill contacts as a problem in itself. There was no consistent explanation offered as to why the inherent risk of some coastal property was not reflected in the price paid by the market. Many of my contacts suggested that it may be because the market still assumes, possibly correctly, that in the event of any catastrophic event the government would allow them to protect the property or acquire it at a pre‐hazard price. This also represents a significant frustration for coastal managers to the point that it is viewed as something of a self defeating practice because it makes such programs less sustainable. It is seen to promote continued occupation and use of land in hazardous areas, which increases the risk exposure, and then transfers most loss and liability to the public purse, at increasing cost. The sense of unsustainability is consistent with findings in Australia (Fletcher et al 2013) that the cost of buy back schemes (at pre‐hazard prices) is outside the funding capacity of local government.

If government funding for relocation needs a more sustainable financial footing, then the practice of premium‐to‐market buyouts by government need to be reined in. Many of my hosts suggested 'discount‐to‐market' values be applied in government buy outs. Government can be a price‐maker in the coastal property market. The extent to which government chooses to take a lead role in the pricing‐in of risk will be a difficult political decision. As with most things requiring long term economic reform, it is best done gradually. The sooner policy change commences, the more likely a tolerable adjustment rather than a sharp correction.

This is not to say that buy outs are an inherently poor solution. There is no doubt that paying a generous premium significantly above market valuation will motivate people to move. Shiva Polefka (2013) looked at buyout programs across the USA. Polefka found

Evidence from completed buyout programs across the country shows that these investments pay for themselves in avoided federal recovery costs from future floods, usually within about 10 years. They also continue to provide savings through cost avoidance in perpetuity, since flood risk, response, and recovery costs are permanently avoided.

It should be noted however that the buy outs 'across the country' would include many lower value areas where buy outs were to avoid riverine flooding. If those non‐coastal elements were excluded, it is my guess that the break‐even point would be significantly longer than 10 years.

I should also point out that Australia does not have an equivalent to the NFIP, although it does have disaster assistance funding, and so there is less recovery cost avoided by government through buying out coastal at‐risk property.

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has been a secondary goal as well, which has been expressed in only very general terms such as the desire to create buffer areas to protect other neighbourhoods on Staten Island.

Alexander Brady (2015) looked closely at the programs on Staten Island. Brady finds:

Now that the government has begun to acquire land, however, these future‐oriented goals have encountered numerous challenges—from disagreements over the appropriate agency to own and maintain the open space, to a potential loss of one of the few areas of the city providing an affordable homeownership option.

The reactive nature of some buy outs, such as the post‐Sandy land acquisition on Staten Island, are completely understandable. The eastern shore Staten Island suburbs were devastated by Sandy and lives were lost. The community perhaps reached a point of conceding that the warrior ethos normally embodied in the 'build it back' response was not in their best interests, and that moving out of harms' way might be preferred. That decision point was assisted, as it noted elsewhere, by a generous offer of buy outs at 'pre‐hazard' prices well in excess of actual market value.

That is not so say that a reactive model is the optimum arrangement, even if it does have the advantage of a major catastrophic event to mobilise action in a community that might otherwise be a little disinclined to consider relocation. It would certainly be preferable to not have a community suffer loss of life and damage to people's assets. If relocation is necessary, then best to have it occur before a disaster. I concede, that is easier said than done.

In summary, one of the key factors leading to success in relocation is to have the entire program planned and budgeted in advance. This includes ongoing management and operational considerations, not just the transfer of land from private to public ownership.

Another related factor to consider regarding buy outs is the tendency to think that ownership by government will blunt the urge to construct coastal protection works or make relocation easier.

In many US jurisdictions, including Hawaii and California, the government owners of land which is at risk of coastal erosion or inundation are, like their private land owner counterparts, inclined to deploy coastal protection works rather than relocate assets.

This is not completely surprising and there is plenty of evidence of protection works by government agencies in Australia and the UK. Although there may be less personal attachment or investment at risk, a public authority may still decide to protect land or structures from coastal erosion or flooding by installing protection works.

What is a little surprising is that works by public authorities are also more than occasionally unauthorised. Bureaucrats, it seems, are human too.

In Santa Cruz, California, a series of unauthorised protection works by the Santa Cruz City administration along an area known as West Cliff have arrived at a point where the State regulator, the California Coastal Commission, has threatened fines and legal proceedings.



The California Coastal Commission was established in 1972 to provide regulatory oversight of land use and public access in the State's coastal zone. The Commission certifies Local Coastal Programs (LCP) which are prepared by local jurisdictions and which set out the permissible land uses and policies for the local coastal zone. In the absence of any certified LCP, the Commission has responsibility for issuing coastal development permits for works such as sea walls in California.

The City of Santa Cruz has no LCP in place and so the Commission is responsible for coastal development permits where protection works as proposed, and this includes works undertaken by public authorities.

Since the 1980s, the Commission has been urging the City of Santa Cruz to consider the local coastal challenges and to map out a way forward through an adopted LCP. According to reports in the Santa Cruz Sentinel (1 May 2017) the view of the Deputy City Manager, Scott Collins, is that the city has neither the funds nor the gumption for a long term management plan.

The issue of how public authorities and elected officials make decisions regarding coastal management is explored further in the Human Factors section of this report.

Set back lines A set back line is a line generally parallel to and landward of the high water mark, which sets a zone seaward of the line within which development is limited or prohibited. Set backs can be used to achieve a number of planning outcomes, such as maintaining view lines, when development is proposed. In this circumstance they are used to provide a buffer between a coastal hazard, such as beach erosion, and an asset such as a house. Set back lines are sometimes calibrated to accommodate a known rate of shoreline recession for the design life of the asset. In Hawaii the set back lines are determined by prescribed formulae and those formulae vary between municipalities and islands.

Schemes that involve set back lines are often considered a form of relocation. My discussions with officials and community groups in various jurisdictions suggested that this is not as clear‐cut as we may imagine. Schemes that involve set backs may actually work in favour of coastal protection and not relocation in the longer term. The jury is still out on whether set backs are a precursor to relocation or a precursor to protection, but the evidence is suggesting that it mostly leads to protection in the medium to long term.

An example from the Churchill Fellowship trip relates to Honolulu, Oahu, where the primary intent of shoreline setback lines is stated as:

to protect and preserve the natural shoreline, especially sandy beaches; to protect and preserve public pedestrian access laterally along the shoreline and to the sea; and to protect and preserve open space along the shoreline. (Revised Ordinances of Honolulu 1990)

The general rule is that the shoreline setback line shall be established 40 feet inland from the certified shoreline, but for shallower lots the set back is reduced. A chronically eroding shoreline



will logically reach a point where the buildable area of the lot becomes unable to support the form of development, such as a house, which might be intended under the land use zone. It is at that point the deferred decision to protect or relocate becomes enlivened.

Interestingly, the Revised Ordinances of Honolulu also provides:

Adjustment of Shoreline Setback Line on Shallow Lots. Where the depth of the buildable area of a lot, as measured seaward from its inland edge, is reduced to less than 30 feet, the shoreline setback line shall be adjusted to allow a minimum depth of buildable area of 30 feet; provided that the adjusted shoreline setback line shall be no less than 20 feet from the certified shoreline

The Ordinances remain silent on the policy arrangement if the depth of buildable area is 30 feet and the shoreline migrates closer than 20 feet from the buildable area.

I am not aware of any audit conducted to identify the adaptation path ‐ relocation or fortification ‐ which is ultimately taken when repositioning within the site is exhausted.

Anecdotal evidence suggests that despite the policy intent of the set back ordinances, in situations described above, coastal protection works are often installed through an allowable regulatory variance when there is no capacity to move a structure further back. Speculation as to why this is the case includes a recognition that when a land owner complies with the set back ordinance, and rebuilds further landward, not only are they seen as having 'done their bit' to help achieve the desired public outcomes but they have done so at some expense. As we shall also see later, the 'sunk cost' of rebuilding a house is a also a powerful incentive to stay in place and fortify, rather than relocate.

It is clear that where there is space to rebuild an asset further back from the sea within an existing lot, set back lines can achieve some repositioning. There will, however, generally be a limit to how far back on a property it is possible to reposition an asset.

It should be recognised that there are situations where relocating a property within its own lot achieves a sufficient long term solution, and in those circumstances there is no need to subsequently consider the choice of protect or relocate. Accommodation strategies will in many cases represent a short term or interim solution, and the ultimate choice between protection or relocation is simply deferred. It is therefore important, given the focus of this Churchill Fellowship, to consider the extent to which the use of rolling easements and set back lines will influence the final choice to relocate or protect the asset.

To test whether set back lines are a precursor to relocation or a precursor to protection, we need to look at the evidence from jurisdictions where they are being used.

The insights gained through the Churchill Fellowship would suggest that set backs are more likely to ultimately result in protection. This seems a little counter‐intuitive. Some people had assumed that set backs and rolling easements were a means of easing communities into a future that involved relocation. A sort of 'relocation lite' ahead of the real thing.



As is confirmed elsewhere in this report, there are a number of very powerful disincentives at play which make relocation difficult anyway. The tendency to opt for protection rather than relocation when a regime of set backs is exhausted might be different if those many contextual and behavioural disincentives were addressed. It is impossible to say. It is interesting, however, that combined with those contextual and behavioural impediments, set backs appear to lead to protection more than they lead to relocation.

Set back lines might therefore best be considered a form of 'accommodation' rather than a form of 'relocation'. The actual role of set backs is, more often than not, a form of coping strategy for an interim period before the real choice of protect or relocate is forced upon land owners and regulators.

Rolling easements Various professionals with whom I met during the Churchill Fellowship were aware of rolling easements and acknowledged them as a potential solution for areas where relocation was sought.

Rolling easements are fully described in a coastal management primer Rolling Easements by Titus (2011). Broadly, rolling easements are defined as

Regulation or an interest in land in which a property owner’s interest in preventing real estate from eroding or being submerged yields to the public or environmental interest in allowing wetlands, beaches, or access along the shore to migrate inland.

A rolling easement can be designed to prohibit coastal protection works or other structures on an active beach so that public access is preserved in the event that the active beach zone migrates landward. It can also require the removal of pre‐existing structures for the same purpose.

Few of my contacts had direct experience in the implementation of a rolling easement but there were a number of professionals who referred to the scheme implemented in the US State of Texas under the Texas Open Beaches Act.

I will explore the idea of rolling easements briefly on the basis that most contacts also perceived them as an important option when considering mechanisms to achieve relocation.

The example of rolling easements most mentioned during the research was the provision under the Texas Open Beaches Act. The Open Beaches Act codifies the rights of the public to access and use the area of beach between the mean low water mark and the line of vegetation ('the easement strip'). The intent, as historically interpreted by the courts, was to allow the public beach to migrate and transform, and to enable unencumbered public access. Notably the Open Beaches Act does not give the public ownership of the easement strip but rather describes rights of access only.



The Open Beaches Act was commenced in 1959 ‐ a time well before the rush of upscale development on the Gulf Coast of Texas. In more contemporary times, as property owners and developers felt more burdened by the easement strip, the Open Beaches Act was amended in 1991 to provide the Commissioner of the General Land Office authority to promulgate rules relating to the easement strip. One rule adopted related to the adjustment of the easement strip in response to the loss of the defining 'line of vegetation' after a major erosion event.

On a chronically receding shoreline, the line of vegetation eventually moves landward of houses and other structures. For these situations, the Commissioner provided for the removal of structures that were 100% seaward of the line of vegetation. The State offered US$50,000 each for removal and relocation of those structures and US$1.3million was set aside for this effort.

There is much in the Texas scheme that warrants noting. There was a budget set and the scheme was affordable to government. There was an attempt to share the burden by providing an assistance package rather than acquire the hazard‐prone land.

The scheme however was tested in local and State courts, and there was a finding ultimately in 2012 that the rolling easement constituted a form of takings against private property rights. It has become a legislative argument played out between two entrenched principles ‐ public access to public beaches and rights attached to private property.

Luciana Esteves (2014) records that only 16 structures were relocated without litigation since the scheme was implemented. It would seem that the scheme had merit but when land owners see an opportunity to litigate for the value of the taking rather than accept US$50,000 for the loss of a structure, there is a little incentive to consider the US$50,000. In the absence of the 2012 Texas Supreme Court decision, or in jurisdictions without such significant constitutional support for private land owner interests, a scheme of this type might be viable.

A final thought regarding rolling easements is that they do not generally involve acquisition by government so the title to the land, now part of the active beach, remains with the private land owner. This creates a potentially very complex set of interests and accountabilities when it comes to liability, uses of the land and management responsibilities.

Perhaps the rolling easement story might end by acquisition by government but at a lower price reflective of the hazard profile and limited uses of land which is submerged, partly submerged or hazard prone. This approach may avoid the market distorting effects of government acquisition at a premium to actual market value. In other words, once the market has factored in the risks, it may be an opportunity for government to simplify the tenure arrangements by acquiring the land.

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crash barriers might not be effective in attenuating wave attack, but another thought emerged: What if geotextile sand bags were coloured bright orange and not a neutral sand colour? Might that serve as both a clear signal that the works are only temporary and also as a visual incentive for their removal? In my view, this would only work if the period of installation was shortened to avoid the natural accretion of sand to cover the bags. Even then, some doubts remain about the effectiveness of an ugly appearance to promote removal of temporary protection works.

In Isle of Palms, near Charleston in South Carolina, I visited a site where there were unattractive temporary works installed on an experimental basis. Not only were they not removed at the end of the specified period but the period of 'experimentation' was extended. A Federal Court decision recently ordered their removal (during turtle nesting season), not due to the unsightly nature of the structure but rather due to the impact on sea turtle populations.

My impression is therefore that the main improvement is to set time frames for temporary protections works which cover the period of wave attack or storminess, but no longer. The use of fluoro coloured bags is worth considering but it is secondary to the period of installation.

PART B: THE BIG PICTURE All coastal adaptation strategies, whether protection, accommodation or relocation, exist in a social, economic, political, legal and governance context. These 'big picture' contextual factors have a major influence on what is possible and whether schemes succeed or fail.

The work of Fletcher et al (2013), based on case studies and interviews in Australia, revealed that consideration and acceptance of a retreat option was highly conditional on contextual settings. Another Australian study by Niven and Bardsley (2013) similarly found that the success of relocation schemes is dependent on "the social acceptability of options for adaptation; the institutional constraints on adaptation; and the place of adaptation in the wider landscape of economic development and social evolution".

One of the most important and consistent findings, especially in the US, was that there are significant institutional constraints and market distortions which strongly bias decision‐making towards an outcome of stay‐and‐protect.

Some officials suggested that there is no point in creating any relocation solutions as long as these market distortions persisted. It was emphasised to me that anything innovative in terms of relocation schemes stood negligible chance of implementation until those market distortions were removed and a more level playing field created.

What they were referring to in particular were two interventions by governments ‐ the National Flood Insurance Program and the general practice of government buy‐out schemes. There are other factors as well. These are explored below.



Limits to public sector capital Climate adaptation, particularly as it manifests as a response to sea level rise and coastal hazards, is an enormous challenge. As James Titus (2011) observes "Buying most of the nation’s undeveloped coastal lands seems unlikely and economically infeasible".

It seems there is a general presumption that one way or another the government will bear the cost burden for coastal adaptation when relocation becomes necessary. It is easy to see where that idea comes from. There is already a track record of governments carrying the burden for relocation through buy outs. It is clear to those who take a longer term view however that will not be possible for government alone to meet that demand. It would seem that we have an 'expectation gap' to address. Part of the solution will require governments to raise awareness in the broader community about the limits to government funding capacity, and part will require government to clear the way, as far as possible, for private sector capital to enter the adaptation marketplace.

Jay Koh is Managing Director and Founder of The Lightsmith Group, and a specialist in global investment for climate resilience and sustainability. I met with Jay Koh in London.

Mr Koh has made the following observation:

The Intergovernmental Panel on Climate Change (IPCC) estimates that climate adaptation will require between 70 and 100 billion dollars of investment per year in developing countries alone by 2050, even if mitigation efforts are reasonably successful. The United Nations Environment Programme (UNEP) reports that it could require two to three times that amount. Unfortunately, less than 10 to 20 percent of public sector climate finance has been focused on adaptation, and only a fraction involves the private sector.

The public purse will, without a doubt, have insufficient funds to take on the task of financing all the necessary coastal adaptation, whether protection or relocation, in coming decades. This should be considered against a background where communities often seem to prefer smaller government and lower taxes. In short, there is little prospect of wholescale coastal adaptation being adequate funded by government.

With that in mind, there is a need to begin the task of creating the policy and regulatory structure that will facilitate the mobilisation of private equity in coastal adaptation. How might we begin the task of bringing private finance to the world of coastal adaptation?

According to Jay Koh, a number of studies have sought to identify the barriers and those findings suggest that impediments include knowledge gaps, uncertainty, lack of clarity around specific risks, and a perceived lack of investment opportunities.

Pre‐requisites for mobilising private equity

Markets often need a common metric to be able to understand and compare investment aspects such as risk. Right now, we do not have a common unit of measurement for climate adaptation.



Climate mitigation on the other hand has a common unit called tons of carbon dioxide equivalent avoided.

Agreeing on that mitigation metric has created a common language to measure and compare the impact of different specific activities on climate change. It has enabled global targets to be set and cost‐effectiveness to be considered.

Jay Koh observed that there is no common unit for climate adaptation – no agreed upon way to quantify climate risk to an asset or to measure the effect of activities or investment on vulnerability to climate change. Measuring adaptation has defaulted to largely counting spending, revealing little about the effectiveness of the investment or method of adaptation.

The other aspect of private sector investment, closely related to the need to create adaptation metrics, is the need to lift market sensitivity to climate risk by requiring climate risk exposure to be quantified and reported.

Disclosure

One way that insurers, re‐insurers, banks and the large investors such as superannuation funds can promote more sustainable coastal management is by simply requiring disclosure of exposure to coastal risk. By requiring those who use their services or their money to make a disclosure to the market about the level of investment in their portfolio which is exposed to current and future climate‐related risk, the larger players make coastal risk exposure something which is counted, and therefore something that matters in decision‐making. As was mentioned by many people working in the coastal management sector, in a world where counting things matters, it matters what we count.

The most attractive thing about this type of 'soft' approach is that it serves as a smoothing device and promotes a steady transition over time rather than a sharp correction.

The role of insurance

One of the biggest players in the coastal adaptation realm is the insurance industry. That industry provides a powerful resource through leadership and influence in related sectors such as banking and finance.

Jay Koh drew my attention to the works of Joyce Coffee, President, Climate Resilience Consulting who has summarised the role of insurance this way(Coffee 2017a):

Key is that insurance serves as an integral element of the entire risk‐management cycle – from identification to risk transfer and recovery. The insurance industry:

• Contributes to a better understanding of risk through, for example, the development of forward‐looking risk models.

• Adds to risk awareness through risk‐based terms and conditions and advice to its customers, and offers incentives to increase prevention and other risk‐management measures.

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future catastrophic loss. It fosters an unsustainable reliance on the federal government as the source of a limitless guarantee to make whole what nature tears asunder.

Any attempt to rectify that imbalance will have a long and difficult haul to bring the NFIP to 'normal' pricing for insurance. Looking at beachfront homes along eroding ocean and Great Lakes coastlines, the National Wildlife Foundation study identified that:

Insurance policies in these coastal areas cost residents from $450 to $900 per year for coverage that from an actuarial standpoint is worth from $10,000 to $18,000 per year.

There is a clear case for policy reform. On the other hand the political difficulty of raising insurance costs for people who have grown accustomed to a highly subsidised rate is obvious. It was attempted through the Biggert‐Waters reforms of 2012 but the proposed changes were subject to community push‐back and the rate of change was reduced significantly in 2014 via the Homeowner Flood Insurance Affordability Act. It has been a case of two steps forward, one step back. Many suspect the reforms will never keep pace with the growing costs to government as flood disasters become more severe and frequent.

As long as the current arrangements persist, the perverse incentives inherent in the system make it simply "a reward for stubbornness"(Flavelle 2017). It means that the tax payer continues to pay for avoidable losses and coastal communities remain exposed to recurring trauma. Not a great long term prognosis.

So, what are the future prospects for the NFIP? As Shiva Polefka (2013) points out:

U.S. taxpayers underwrite flood insurance for the $527 billion in properties in the coastal floodplain as part of the $1.2 trillion in assets insured overall under the federal National Flood Insurance Program. And the devastation caused by coastal storms from Katrina in 2005 to Sandy in 2012 has not only exhausted the premium‐funded resources of the National Flood Insurance Program, or NFIP, but it has also required around $28 billion in taxpayer‐funded bailouts to pay for insured losses. As coastal populations continue to swell, so too will this already underfunded liability.

In other words, the US Government is on the hook, should any significant disaster in the realm of Hurricanes Katrina or Sandy ever cause similar property damage again, and coastal development continues to add more risk exposure each year. Servicing the debt is already expensive and the Federal Emergency Management Agency (FEMA) sees no way to repay it.

In short, the NFIP is a form of market distortion which acts as a barrier to relocation efforts. It is also a scheme which will become increasingly unsustainable from a financial perspective.

At the time of writing, Hurricane Harvey was causing catastrophic flooding in Texas and Irma was tracking towards Florida. Early analysis by JPMorgan Chase suggests damages in the realm of US$40 billion, not including damage to public infrastructure, and that insured losses are likely to be US$10 billion to US$20 billion.. This very sobering prospect prompted Charles C. Watson Jr., a founder of Enki Holdings, a data analytics firm for natural disasters, to describe the NFIP as "the most frustrating, screwed‐up system you can imagine" (Walsh 2017). As hurricane season

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undervalued the true value of the beach because the valuation only reflected recreational and social values, not the value of the beach as a protective buffer in storm events.

Government buy outs at a market premium

This has been explored in Part A of this report.

It needs to be expressly reiterated here that many of the people interviewed during my trip confirmed that the premium‐to‐market value paid by government for at‐risk property creates a spiralling effect that in turn inflates the value of other at‐risk property that must be paid by government in the next round of buy outs. It is a form of market distortion.

Potentially, changes to the practices of government buy outs at premium‐to‐market value might have a powerful effect on the viability of a relocation scheme. Removing the distortion creates a more even playing field in which relocation might be considered.

The Big Picture ‐ Summary

Professor Rob Young, Western Carolina University, takes the view that the solution to coastal development is not to over‐regulate and order people off the beach; the solution is to take away all of the public programs that pour in to subsidise the risks, and to let the market determine where it makes sense to build and where it doesn’t. If that were to happen, then those who develop and manage the coast would find less incentive to construct fixed assets in at‐risk locations. In the long term, they might also care about sea level rise if they had to bear the cost of that risk in their investment. My findings from discussions with Charles Lester established a similar line of thinking. Until we address the market distortions and externalities, the prospects for relocation, whether part of a scheme or not, remain poor.

PART C: THE HUMAN FACTORS Woven into all of the issues described so far is the need to also consider the human factors.

How we see our choices and how we make decisions influences everything. Our understanding of human behaviour is drawn from clinical psychology, neuroscience and economics, and more recently from the discipline which combines all three ‐ behavioural economics.

Path dependency

Path dependency has been a concept applied to a range of decision‐making areas, such as investment, economics and strategic management.

From an economist's point of view, path dependency is characterised as

a minor or fleeting advantage or a seemingly inconsequential lead for some technology, product or standard can have important and irreversible influences on the ultimate market allocation of

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There are, therefore, two powerful cognitive and behavioural forces at work when need to contemplate the optimum coastal management pathway after we have already installed temporary protection works. Both forces bias future decisions towards protection and away from relocation.

Temporary coastal protection works also have a separate but related challenge, which is all to do with how long temporary works stay in place. It was a frequently raised issue in all jurisdictions and we will explore that aspect next.

Human factors at play in regulating unauthorised work

Most jurisdictions concede that there is a high incidence of unauthorised coastal protection works.

These often comprise 'panic' installations in which a landowner threatened by a storm erosion event will dump rocks, soil, building rubble or even car bodies onto a shoreline at the erosion scarp in an effort to mitigate the erosion on their property. This is not always the case. Sometimes individuals will take more planned and organised, but equally unauthorised, installation of protection works, often in broad daylight. I have been made aware of one case in the US where several landowners jointly organised dredge spoil to be pumped without authorisation onto a receding shoreline in front of their properties.

At other times lawfully installed temporary protection works, such as the installation of sand bags, become unauthorised due to the breach of a condition such as the removal or decommissioning of the temporary works at the end of the period authorised.

State and municipal officials recounted numerous examples of difficulties in undertaking any meaningful enforcement action when dealing with unauthorised coastal protection works.

The sense of unreasonable action

I was not able to identify specific case studies or data to illustrate why surveillance and enforcement are so difficult for the relevant authorities, but there were some anecdotal insights.

All officials who have a decision making role in surveillance and enforcement, from the elected official to the local enforcement officer, face an ethical and moral problem. The act of enforcement feels unreasonable. Not only does the enforced removal of unauthorised works often mean that a person's home is now at risk of loss to actions of the sea but, perhaps more relevantly, the government official understands that there is no alternative pathway for the landowner. The landowner was not, in most cases, made aware of any government assistance or alternative to protection works, because no such alternative pathway was available to them at the time they decided to install unauthorised protection works.

In other words, the absence of a relocation scheme, as an alternative to protection, makes the enforcement action against unauthorised protection works personally and politically difficult. Had landowners been made aware of (say) the coastal risk exposure of their location, and also



been offered a relocation assistance package, and in that knowledge still decided to install unauthorised protection works, then the sense of reasonableness for an enforcement action is restored.

The enforced removal of the unauthorised or overdue temporary works therefore seems like an unreasonable action, not only to the landowner, but more significantly to the officers and the elected officials responsible for applying the law.

The cost of removal of coastal protection works can also exceed the cost of installation. There is usually no bond or similar security to cover the cost of removal. While it is conceivable that it might be possible to require such a bond, emergency temporary protection works are usually installed at a moment of crisis and the imposition of a bond in such a context would be seen as an unnecessary bureaucratic delay. It would be inappropriate, and probably ineffective, to attempt to hold back emergency protective measures until a bond for the removal of the works is secured.

Protection often seems to many enforcement officers to be inevitable and there is a sense of futility of attempting to require removal of structures which will, in all likelihood, be installed once again when the next erosion event occurs.

In many cases, once the erosion event has passed and the beach processes return to normal, the temporary geotextile bags begin to be covered by sand. This also makes the task of removal more challenging because it would require excavation of a reforming foredune. Not only is this an undesirable action from the perspective of beach recovery, it is also something which would be seen as preposterous by a community.

Deferring the difficult decisions until a time of crisis

All jurisdictions visited during the Churchill Fellowship reported that there was a tendency to put off a difficult decision until another time. While many of the coastal managers and academics might acknowledge the benefits of long term planning, or even short term planning, they also pointed to the political reality that it is easier to 'kick the can down the road' than to commence real action. This was the case even when there was evidence available that deferring a decision would be likely to make the longer term problem more acute. This is particularly pronounced where senior decision‐makers are popularly elected.

The Santa Cruz area on Monterey Bay in California is steeped in surfing culture and much of the economy, as elsewhere in California, relies on the presence of its renown beaches and surf breaks. Many locations in Australia can probably relate to that significant reliance on what is sometimes called 'the saltwater economy'.

Santa Cruz is, like most of California, exposed to coastal erosion. Santa Cruz has also followed the broader California trend of increased coastal protection works installed at the moment of crisis.

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at‐risk coastal location. The response also points to the state of complacency which often prevails in the absence of any recent catastrophic event. No risk is perceived, and no action therefore taken.

What has also been observed in some of the adaptation literature (see Adger et al 2008; Whitmarsh 2008) is that although risks associated with climate change might be known from actual past experience, such as a significant storm event, community concerns about the impacts are conceptualised as removed in space ('not here') and in time ('not now').

It appears that although public officials might see a catastrophic event as a good opportunity to bring on a debate and to persuade those in at‐risk areas to move, the evidence would suggest otherwise.

There is a paper prepared by Missy Stults (2017) which provides a desk‐top review of the findings in existing adaptation studies and also analyses the content of 30 local hazard mitigation plans in the USA. The analysis codifies the types of actions proposed in local plans to deal with climate related hazards and then examines the contents of those plans to give a snapshot of what is actually being given attention in local communities.

From a coastal management and relocation perspective, Stults notes that studies regularly find that local hazard mitigation plans "consistently fail to identify land‐use and development trends and how they affect hazards and risk" and also that plans are "dominated by emergency response and preparedness actions ‐ not mitigation actions". Specific actions in plans also have "a strong emphasis on structural preparedness such as flood defences, use of culverts and enhanced building codes". This paints a picture that will not surprise most coastal managers.

The bias towards engineering and protection solutions reinforce my findings elsewhere of a paucity of support for relocation from the outset. The preference to focus on emergency response and recovery actions illustrates a preference to defer decision making, and noting that this generally means that the difficult decisions are made at a time of crisis, it also creates another barrier to any relocation of assets out of the hazard area.

In many respects, regardless of whether protection or relocation is the appropriate response, one of the more worrying findings in the Stults paper is that the least common element in the plans was a formal commitment to climate adaptation. Admittedly, there may be 'commitment' separately to the plan itself.

It seems highly questionable whether hazard mitigation plans are currently able to actually mitigate risk or make communities more resilient.

This may go some way to explaining why my Churchill contacts relayed similar stories ‐ where difficult coastal management decisions have been identified, acknowledged but ultimately deferred. Then a storm event or similar will force a decision to be made. In virtually all cases, that decision will seek to address the immediate issue without significant consideration of any longer term consequences or implications. Immediate issues are typically a desire to protect of assets and land.



A scenario common to all jurisdictions visited is that, despite often years or decades of inexorable shoreline recession, landowners are astonished to find an erosion scarp approaching their houses during a storm. Yet it is almost a universal experience that the strong behavioural bias is to defer any decision making until assets are physically threatened by hazards such as flooding, wave attack or shoreline erosion.

A recent case study is found in Maui, Hawaii. A series of high tides and strong swells in June 2016 created erosion in front of condominiums and resorts at Kahana Bay, Maui. There should not have been surprise because the local erosion threat had been evident and growing closer for several years. The owners, however, were unprepared. They described it as a 'crisis' and demanded action by the county to protect their property. The Mayor of Maui County, Alan Arakawa, bluntly observed "This has been happening over decades. I don't consider neglect as an emergency". (Sugidono 2016)

The tendency to defer decision making is not the sole preserve of condominium and resort owners. Elected representatives, bureaucrats and administrators are equally likely to procrastinate and defer decision‐making.

This is not to say that coastal protection works may not be the most suitable response to an encroaching coastal hazard, but rather that there is rarely any genuine consideration of options, and their relative costs and benefits, before that decision is made. This means that there is a significant risk of commitment to a response pathway (ie protection) which may prove to be inadequate, unaffordable or detrimental to the interests of adjoining public and private land. The related idea of 'path dependency' is explored in more detail below.

It would appear, conversely, that one of the factors which can assist support for a relocation scheme is decision making in advance of any crisis or emergency. Clearly, if there is to be an alternative to protection schemes which might be given equal consideration in advance of any crisis, then there needs to be more than a generic concept such as 'planned retreat'. The relocation alternative needs to be sufficiently detailed to enable all parties to compare environmental, social and economic aspects such as costs, who pays, externalities and legal arrangements.

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• Restricting or reducing the prevalence of government buy outs based on 'pre‐hazard' values and premium‐to‐market prices.

• Enabling and mobilising private sector capital.

Once there is an operating environment which is more receptive to schemes which involve relocation, the marketplace for relocation can be developed.

If there is money available within government for relocation schemes, that money is better directed at managed realignment schemes which have proven to be an effective use of public funding as a response to coastal hazards. Realignment schemes offer a number of advantages over 'normal' buy backs.

There are other relocation methods, such as rolling easements or relocation assistance packages, which could be developed and deployed, provided the market distortions which bias against relocation can be mitigated.

Importantly, we need to recognise that a slow and gradual adjustment is preferable to a sharp correction. Economies, and people within them, cope with change much better when the transformation is evolutionary, not revolutionary. All of my hosts would agree that deferring the adjustment only makes the situation worse but they also recognise the political realities.

We have a good idea our future coastal management challenges, and relocation will be an essential part of the necessary adjustment. The research points to a range of simple measures which can also be implemented immediately to bolster the prospects of relocation schemes. Matters such as shorter periods for permitted temporary works can be quite ordinary regulatory reforms which will help address biases such as path dependency which generally impede any subsequent relocation options. Small non‐disruptive steps can also be taken to create a marketplace that is ready for relocation, such as requiring disclosure about coastal hazards. The overall message has been ... start now.



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CHURCHILL REPORT Allan Young Final · Factors that lead to success or failure in coastal relocation...

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