What explains this? Above all, if we can shift economic activity from the most affected areas to more protected areas, we can mitigate the effect on the economy. The magnitude of the benefits of migration, however, depends on two assumptions.
First, migration is believed to occur due to a gradual rise in sea level, facilitating adjustment. For example, even though the main results of the new analysis exclude physical capital, most buildings and factories depreciate over time and therefore need to be replaced even if sea level does not rise. As the authors explain, âAny substantial rise in sea level takes longer to materialize than the standard time it takes for capital and infrastructure to depreciate. As a result, the cost of destroying capital due to permanent sea level rise is likely to be relatively low. “
Second, the effects of migration crucially depend on where people are moving from. Cities, for example, flourished when talented people gathered there, benefiting from the exchange of ideas and a fluid labor market. If people leave a city that is at risk of flooding, the economic effects depend on whether most of them congregate again in another location. The analysis does assume that it is possible to take people out of Manhattan and collectively move them elsewhere.
Even making these two assumptions, the effects of migration can be expected to vary considerably across the world. Rising sea levels will cause the migration of about 7% of the population of Amsterdam and Miami, compared to just 0.4% of the population of New York. This shows how important it is to do this type of analysis at a very granular level. (These researchers use a model with 64,800 cells across the world.)