Paying to save the beach: effects of local finance decisions on coastal management

Abstract

As sea level rises and storm frequency and severity increase, communities worldwide are investing in coastline management projects to maintain beach widths and dunes that support recreational amenities and mitigate storm risks. These projects are costly, and differences in property owners’ returns from maintaining wide beaches will influence community-level support for investment in shoreline defense. One way to account for these differences is by funding the project through a tax instrument that imposes the heaviest cost on residents who benefit most from beach nourishment. Some communities along the US east coast have adopted this approach. We use an agent-based model to evaluate how the imposition of project costs affects coastline management over the long-term. Charging higher tax rates on oceanfront properties reduces desired beach width among those owners but increases desired width for owners of inland properties. The aggregate impact on beach width depends on coastline shape and development patterns that determine the balance between these two groups, heterogeneity of beach width preferences and climate change beliefs, and levels of participation in local politics. Overall, requiring property owners who benefit most from beach nourishment to bear the highest cost results in wider beaches. The result suggests that delineating tax rates to account for unequal benefits of local public goods across taxpayers could facilitate local investment in climate change adaptation.