| I estimate the 50-year social cost of allowing Delaware's Atlantic coast to migrate inland. These “retreat costs” are divided into three categories: capital loss, land loss, and transition loss. Capital loss measures the welfare reduction associated with condemning a structure before the end of its useful life. Land loss measures the value of acreage lost to the sea. Transition loss measures the costs likely to be incurred when coastal structures are removed. The counterfactual for all estimates is an otherwise similar coast that experiences no net erosion or accretion.; I compare the social cost of strategic retreat to the social cost of maintaining Delaware's current coastal profile and position. These “stabilization costs” are divided into two categories: project loss and environmental impact. Project loss quantifies the value of the land, labor, and capital required to maintain the coast's current width and position. Environmental impact quantifies the value of ecosystem alterations attributable to stabilization efforts.; The social cost strategic retreat is estimated to be between {dollar}242 and {dollar}485 million over the next fifty years. Over the same time, the social cost of coastal stabilization is estimated to be between {dollar}48 and {dollar}139 million. Estimates are extremely sensitive to assumed erosion rate. When similar erosion rates are used to compare coastal stabilization and beach migration, coastal stabilization is consistently identified as Delaware's socially efficient erosion response. |
