Can you assign a price tag on the cost of climate change induced migration? California is betting so. On October 17th, 2019, the Federal Reserve Bank of San Francisco published a series of reports relating to effects of climate change on internal migration, namely from coastal cities to inland. This report, titled “Climigration and the Private Sector,” assesses the responsibility of both the private sector and the government in aiding the transition of people from climate-change impacted areas to safer ones. With a flair of typical Californian independence, the authors of the report seem to dismiss the role of the government and instead focus on the private development community, arguing that “government action is often slow and, at times, stymied by private sector resistance.”
But the release of the reports themselves indicate a first step by the government on the question of climate migration, not the private sector. The Federal Reserve Bank of San Francisco is the 12th district bank of the US’s Federal Reserve System; a network of 12 banks around the nation that serve the U.S Treasury as well as conduct valuable research on economic issues, such as the cost of climigration. As a product from a governmental institution, thus, the report somewhat undermines Siders and Hulet’s claim about how the private sector should act first instead of the government as, technically, the latter has just made the first move by releasing the report. Ultimately, the report reveals the underlying relationship between the private sector and the government in the issue of climigration; the government gives orders first, while the private sector acts first.
Nonetheless, at least the government is talking about the issue at all, even if the form of directing the private sector. In an article by The New York Times, journalist Christopher Flavelle points to how the Federal Reserve has been slow to talk about climate risks in the past compared to the central banks of other countries most likely due the US’s supposed politically independent nature. It seems, however, of the utmost importance that the government continues to discuss the impacts of climate change not only to better prepare for inevitable calamities, but also to decipher their complex role which goes beyond disaster-aid funding. In fact, in their report, Siders and Hulet draw on the perverse reality lived by coastal property owners whereby, because federal funds pay for significant costs after disaster hits, the economically rational choice for them is to “stay and wait for a crisis to force (and fund) them to relocate”. But, the government may also have a role even if the private sector intervenes to encourage relocation before a disaster hits; let’s talk about blue-lining.
Blue-lining is the refusal of banks to lend mortgages in areas prone to flooding. The term resembles that of red-lining whereby banks would withhold lending to discriminate against African-American communities. Following research by Asaf Bernstein, an economist at the University of Colorado in Boulder, and two co-authors, it seems those properties likely to be underwater if sea levels rise one foot sell for 15 percent less than comparable properties with no flood threat. This is blue-lining in the flesh. Furthermore, Michael Berman, a former chairman of the Mortgage Bankers Association, points out in a paper that the decline in property values following Bernstein’s research is likely to scare lenders from those areas even more thereby increasing the chances of blue-lining.
If indeed blue-lining does arise more frequently thanks to the cautious efforts of banks to decrease lending in flood-prone areas, the government’s role becomes two-fold in climigration; on the one hand, they help to fund the relocation of climate refugees after a disaster hits while on the other, they may be forced to intervene if the private sector decides to act first by limiting lending and potentially excluding minorities and poorer populations. In the report, Siders and Hulet address how “disinvestment in risky neighborhoods, and targeted investment in safe neighborhoods, if done solely in pursuit of profit, can lead to gentrification and a concentration of at-risk populations in vulnerable locations.”
The role of the government is thus inevitable whether it is that they urge the private sector to limit investments threatened by climate change or they ‘clean-up’ the potential side-effects of the private sectors’ efforts by assisting the relocation of all people and not only those with the means to move away. In light of this assessment, Sider and Hulet’s report suggests the government’s efforts to wash their hands clean of the cost posed by climigration, yet fails to realise the implications of the private sector’s potentially problematic interference.
As a private institution located on an island, Columbia University experiences the same threat of flooding and yet also responsibility as a land-lord to many in the area; should there be a conscious effort by the university to work with the city to better prepare for potential climate disasters by relocating and potentially facilitating blue-lining? Ultimately, the confrontation between the private sector and government in climigration is closer to home than we thought and merits greater attention from the university as an appropriate arbitrator.