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Economic Impacts of Climate Change on Cape Cod

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Economic Impacts of Climate Change on Cape Cod Economic Impacts of Climate Change on Cape Cod EXECUTIVE SUMMARY Submitted by: Eastern Research Group, Inc., and Synapse Energy Economics, Inc., to the Cape Cod Commission June 30, 2021 Contents Contents ............................................................................................................................................... i List of Figures .................................................................................................................................... i List of Tables ...................................................................................................................................... i Background and Purpose .............................................................................................................. 1 Methods .............................................................................................................................................. 2 Key Findings ...................................................................................................................................... 3 Costs of Not Adapting to Climate Change .......................................................................................... 3 Cape Cod Emissions Analysis ............................................................................................................... 7 Adaptation Strategies ............................................................................................................................ 9 Mitigation Strategies ........................................................................................................................... 10 Conclusion ....................................................................................................................................... 12 List of Figures Figure ES-1. Cumulative private, public, and commercial building damage from coastal flooding. ...................................................................................................................................................................... 3 Figure ES-2. Locations of establishments affected by 1 to 6 feet of sea level rise. ............................ 5 Figure ES-3. Cape Cod cranberry bogs affected by sea level rise. ....................................................... 6 Figure ES-4. Economywide GHG emissions for sustained policy scenario in Barnstable County relative to Commonwealth Emissions Reduction Goals. ...................................................................... 7 Figure ES-5. Economywide GHG emissions for SER1 scenario. ......................................................... 9 List of Tables Table ES-1. Sea Level Rise Projections for Cape Cod ............................................................................ 2 Table ES-2. Storm Probability Associated with Storm Tides and Probabilities ................................ 2 i Background and Purpose Cape Cod (Barnstable County) is experiencing impacts from climate change today that are anticipated to worsen in the coming decades. Climate change and continued reliance on fossil fuels will affect all sectors of Cape Cod’s economy. Sea level rise will increase instances of flooding and damage to coastal property and infrastructure. Warming ocean temperatures will alter fisheries and encourage harmful algal blooms. Burning of fossil fuels will continue to emit pollutants with adverse effects on public health. The Cape Cod Commission engaged Eastern Research Group, Inc. (ERG), and Synapse Energy Economics, Inc. (Synapse), to put climate risks—and options to address those risks—into a monetary context to inform policy decisions. ERG and Synapse assessed the impacts climate change may have on the region’s economy, revenues, and investment decisions and evaluated costs and benefits of key strategies that the Cape Cod Commission and stakeholders identified to address climate change. The results of this assessment will inform the Cape Cod Climate Action Plan and potential amendments to its Regional Policy Plan. The assessment consists of three parts: • Costs of not adapting to climate change: This analysis estimates the losses that Cape Cod and its residents will face without taking action to mitigate climate change impacts and minimize their greenhouse gas (GHG) emissions. • Cape Cod emissions analysis: This analysis establishes a sustained policy baseline for energy use and emissions baseline given current state and regional policies. It also assesses four primary scenarios for meeting the Cape’s GHG reduction goals (and key sectors for targeted mitigation) while continuing to meet energy needs. In addition, this analysis identifies key metrics for tracking the mitigation scenarios. • Economic analyses of adaptation and mitigation strategies: These analyses provide context for key adaptation and mitigation strategies identified through its Climate Action Plan stakeholder engagement and planning process. To the extent possible, these analyses provide costs and benefits or the cost-effectiveness value of strategies. Together, these analyses demonstrate that without action on climate change, the impacts on the economy, communities, and resources of Cape Cod will be severe. However, strategies exist to cost-effectively offset many of these impacts. 1 Methods The analyses look at climate change impacts in the short term (2021–2030), medium term (2031–2050), and long term (2051–2100). ERG and Synapse estimated GHG emissions in the short term and medium term only because of the uncertainty in technology beyond 2050. High- level approaches that cut across our analyses are presented below; the technical report describes in detail the methodology for each analysis. Costs of not adapting to climate change: As coastal flooding is the major contributor to climate-change-related losses, ERG used the sea level rise projections in Table ES-1 and storm surge heights in Table ES-2 to estimate losses across the analyses. Table ES-1. Sea Level Rise Projections for Cape Cod Sea Level Rise Year (ft)* 2030 1.20 2050 2.45 2070 4.25 2100 7.70 *ft above North American Vertical Datum of 1988 (NAVD 88) Table ES-2. Storm Probability Associated with Storm Tides and Probabilities Return Storm Tide Annual Probability Period (ft)* 1-year storm 2.26 1 5-year storm 3.89 0.2 10-year storm 4.51 0.1 20-year storm 5.22 0.05 50-year storm 6.34 0.02 100-year storm 7.37 0.01 200-year storm 8.50 0.005 *ft above NAVD 88 Cape Cod emissions analysis: Synapse modeled a sustained policy case (i.e., baseline trajectory based on policies in place) for the electricity sector and four emissions reductions scenarios in the transportation and buildings sector. Synapse used the following modeling tools and approaches: • EV-REDI: EV-REDI is a custom-built stock-flow model for modeling multiple impacts of transportation electrification for individual states. EV-REDI contains data on vehicle sales, stock, efficiencies, carbon dioxide (CO2) emissions, and criteria pollutant emissions. 2 • Buildings Decarbonization Calculator (BDC): The BDC is a custom-built calculator for modeling the evolution of building energy consumption for space and water heating in the residential and commercial sectors. • Independent System Operator (ISO) of New England modeling: The ISO produces models using existing forecasts for the electricity sector, which Synapse used to estimate GHG emissions based on the average New England-wide emissions per megawatt-hour (MWh). The baseline trajectory for the electric sector’s GHG emissions assumes the state meets its existing regulatory goal of supplying 80 percent of all electricity in 2050 with zero-carbon renewable sources of generation. Benefit-cost analysis: ERG worked with the Cape Cod Commission to quantify the costs and benefits of several adaptation and mitigation strategies that lent themselves to monetization and were deemed the highest priority strategies to analyze. ERG did not perform this analysis for all strategies because of resource and data limitations. Key Findings Costs of Not Adapting to Climate Change The cost of not adapting to a changing climate is high and will accelerate over time. Sea level rise and coastal flooding are the greatest overall threats. Building damage from sea level rise and storm surge: ERG estimates that between 2021 and 2100, private, commercial, and public buildings will incur about $13.4 to $17.8 billion in damage as a result of sea level rise and storm surge combined (see Figure ES-1). This estimate does not include the lost value of another $14.5 billion in land that will be at least partially inundated by 2100. The average annual damage will be approximately $69 million per year in Barnstable County between 2021 and 2030, $89 million between 2031 and 2050, and $256 million between 2051 and 2100. The technical report presents expected damage by town. Figure ES-1. Cumulative private, public, and commercial building damage from coastal flooding. 3 Reduced tax revenue from vulnerable properties: ERG estimates that from 2021 through 2100, properties vulnerable to sea level rise and tidal flooding will cumulatively pay approximately $8.6 billion less in tax revenue than they would have if they were not threatened by this flooding. These vulnerable properties will be inundated or are near roads that will be inundated by sea level rise and tidal flooding. Therefore, their property values will grow more slowly (or decrease faster) than non-affected properties. This will either lower the tax revenue of towns or shift the burden to
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