Moral Hazard and Sea Level Rise

Ann Phillips. Photo credit: Free Lance-Star

Why aren’t Virginia localities acting more aggressively to protect themselves from rising sea levels? You don’t have to believe in catastrophic global warming to acknowledge that sea levels are creeping steadily higher worldwide or that subsidence caused by shifting tectonic plates and shrinking aquifers is aggravating flooding in Virginia’s Tidewater.

A big reason for the complacency, says Navy Adm. Ann Phillips, is that people think someone will bail them out. Virginia’s coastal-adaptation czar, appointed by Governor Ralph Northam, drove home the point last month at a College of William & Mary forum. Reports the Free Lance-Star:

“As I talked to people about what options are, in passing, to deal with the future, I have a sense that many homeowners feel that the cities are going to bail them out. And that the cities feel that the states should bail them out, and that the state thinks the federal government should bail them out.”

The United States — and Virginia is no exception — suffers from systemic moral hazard. When something bad happens, the politicians and the media lead an outcry for government to step in. After enough bail-outs, the public develops an entitlement expectation that government will step in. And, when people expect to be bailed out from the consequences of poor decisions, they are more likely to build where they shouldn’t.

Phillips argues that the expectation is misplaced. “In actuality, none of that is going to happen,” she says.

So far, the General Assembly has not stepped up to the challenge. One example, legislators have yet to appropriate money to a fund they established in 2016 to create a low-interest loan program to help residents and businesses subject to recurrent flooding. Phillips herself has no funding for staff.

Also breathing down the neck of Phillips and the General Assembly, maintaining Virginia’s Triple A credit rating while generating big bills to protect and make communities more resilient to climate change.

There are signs in Norfolk and Virginia Beach that local governments are thinking differently about climate change. Whether they’re doing enough, however, is an open question. Here are some of the things we should be doing:

  • At the top of the list, stop subsidizing insurance that pays for re-building in flood-prone zones. Put this at the top of the list. It costs taxpayers nothing. Indeed, it saves taxpayers money. Ending subsidies should be the easiest thing politically to accomplish.
  • Stop expanding public infrastructure (roads, water, sewer, etc.) to serve development in flood-prone zones. If developers want to build and maintain infrastructure in vulnerable areas, fine, let them, but don’t put the onus on taxpayers.
  • Create special tax districts in areas of high-value development that can sell bonds to pay for local flood-control infrastructure. 
  • Require Realtors to inform home buyers when properties are located in a flood-prone zone or in an area that is likely to become flood-prone within the next 30 years (the length of a mortgage).
  • Allow banks and other mortgage-lenders to charge a risk premium when providing mortgages for properties built in flood-prone areas.

The underlying theme here is that people should be free to build wherever they want. But they are not entitled to low-interest financing, they are not entitled to government-built infrastructure in vulnerable, flood-prone areas, and they are not entitled to bail-outs. These aren’t difficult principles to grasp. I cannot fathom why Virginia has failed to implement them.

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24 responses to “Moral Hazard and Sea Level Rise

  1. Agree entirely with your list of immediate actions. Thanks for pointing out that court decision. Please follow up if there are more developments as that sort of thing is crucial, yet rarely makes the papers in NoVa.

  2. Yep – those are the themes to get you elected here in Entitlement USA: personal responsibility, true risk assessments in insurance, planning and building a financial cushion for disaster. When you’re done with applying those principles to the flood zones, be sure and preach that approach in the areas of health care (obesity, diabetes, smoking) and retirement planning.

    Nope, the opposite approach is popular with both parties. Entitlement USA.

    Seriously, if the banks are making loans without a premium or mandatory flood coverage and the government-related agencies are backing them (FHA, VA, Fannie and Freddie) why should anybody believe there is real risk? Maybe it really is all overblown. There are serious actuaries involved in those industries.

  3. It’s not entitlements for everyone. Rural areas are expected to take care of ourselves and only get the services that are affordable. The same people who object to helping rural areas expect complete backup themselves and don’t see anything wrong.

  4. 10 to 1 odds that the editorial board of the Post will, in the next five years, start opining that all Virginia taxpayers should fund protection for those whose properties are in flood plains. My god, that would get the writers orgasmic. A big tax increase.

  5. I saw part of a PBS documentary about what cities around the globe are doing to adapt cities for sea level rise. Maryland faces similar issues to Virginia in Annapolis for example, water is coming higher due the same glacier subsidence issues we have, not sure about the groundwater depletion issue. So there should be some common ground to collaborate.

    Needless to say. we have political divisiveness on this issue, so it is not something we can discuss calmly without getting into climate change policy debate.

    • But that’s the problem. The debate around flood insurance being mandatory and a true measure of risk – nothing to do with climate change. Debates about amending zoning, building codes and drainage plans to reflect storm surge don’t need to be about climate change. Of Course a major hurricane is coming. The measurements are clear that some coastal areas are sinking and have been since long before the modern era, and sea level rise has been underway since the last ice age, with the debate now over whether it will accelerate. But when The Alarmists take over the debate, try to turn it into a political club and beat any moderate voice with the “denier!” slander, the rational people stop talking.

      • Disagreeing with “alarmists” as a reason to not take action on anything sounds pretty iresponsible , a cop out but that appears to be some rationale . By the way, “science” is what “measures” BOTH temps AND sea levels. Why believe one and not the other?

      • Steve is absolutely right. If the Left wants to polarize the issue of rising sea levels by making it about climate change alarmism, it will turn off a lot of people. The trick is to build a non-partisan case for action that does not explicitly invoke climate change.

        • I think you and Steve have this sort of backwards – at least how I think of our government. Generally, I think of competing factions, differing motivations, and the task is to build enough of consensus on some legislation to get it passed.

          Applied to this issue, Steve’s personal responsibility tribe and LarryG’s environmentalist tribe could agree upon and pass legislation to get these measures into law. There is no requirement they agree on their motivations.

          However – and what I mean by having it backward – if I’m someone with a financial interest in low-lying property, I can split Steve off from LarryG by calling the legislation ‘environmental religiously motivated’ whatever, and making it about climate change. And so I win, by splitting the two tribes. It’s backwards in that we’re trying to agree on first principles – that’s not going to happen – rather than upon a concrete proposal (and it sounds as if there would be some consensus, if one were on offer.)

          • Reed Fawell 3rd

            Excellent point, and a central requisite for a practical solution.

            But does that dog (practical approach) hunt? Does it work politically in today’s polarized culture? Likely no.


            Each polarized side wants to demagogue the issue in order to raise money and enlarge its base, and thus to aggregate ever more power, instead of going about the mundane task of negotiating and implementing real solutions that eliminate talking points. This will forfeit the issue that feeds of political establishment in power, and fears it plays upon. Think Russian collusion by a sitting US President for one of many examples.

            So, instead, what our politicians today want are not solutions, but new ways to create new alarms and build false problems to keep their power and purpose that expands their base and treasury. This is the driver behind America’s eternal grievance culture. Hence, we fear nothing that is real. Why should we, if we think we are invulnerable? This is what happens to societies that have been too successful for too long.

  6. So if someone does not believe science on global warming, why believe it for sea level or subsistence?

    • See, there it is!!! It is a knee jerk response with Larry and his tribe.

      • Well no, it’s NOT knee-jerk to ask why some folks believe SOME science but reject other science.

        I just think it’s curious to hear that “science” has kept “good” records on sea level AND they DO predict it to continue even higher and some folks take that as gospel yet the very similar science ALSO has kept temperature records and predicts even higher temps but they are a bunch of lying SOBs engaging in a massive conspiracy to fools people!

        It’s just not consistent unless there is some compelling distinction.

        BEYOND THAT – MOST scientists say that the rising sea levels ARE in fact DUE to rising temps and yet the folks that do believe the sea level rise is true – reject the reason given by science and just say that it’s got other causes, etc.

        Now, Steve calls me a member of a tribe – intersting… perhaps projection?

    • The problem is that fraud is wide-spread in science but not reported in connection with “climate science.” Why not? One can believe that human activity affects climate and that there is significant fraud in climate science that goes on for ideological and financial reasons.

      • In our society today, whole industries have sprung up to mislead the public for private advantage. Duplicity is today’s norm in many parts of society, and it works very successfully.

      • It is interesting that none of the articles linked relate to fraud in climate science. I have no doubt that there have been studies in climate science that were fraudulent, just as the articles cited above are about research fraud in areas of medicine and biology. Humans are involved in these endeavors and sometimes humans will cheat, for various reasons. Just as humans will sometimes steal funds from Little League teams or charity organizations. Because a minority of the humans involved will cheat, does that mean we should dissolve all charitable organizations and Little League teams and disregard all research related to climate science? Of course not, especially when the vast majority of people involved with charitable organizations are honest dedicated folks and the vast majority of scientists throughout the world are in general agreement with the climate research.

        • Dick has got it right – as usual. We have this problem with logic when we say SOME folks are “bad” so therefore that field of science is a fraud.

          ALL science has a wide range of players and some of it is just not good BUT that is why the scientific method does not accept a “consensus” UNTIL a large number of sccietists do reach some level of agreement on some things – always with the caveat that even then some conclusions may be not 100%

          It works this way with cancer, with caffeine in coffee, with autism, with El Nino and even with hurricane prediction. NONE of the hurricane models are dead on 100% – EVER – yet do we call those models and the scientists who develop them liars and frauds because they never get the track exactly right? Is that BAD science or conspiracy among scientists all writing different computer models and claiming they can predict hurricane tracks but in fact they fail?

          No one – no scientist has EVER proven definitively that smoking cigarettes causes long cancer. And we KNOW that it does not in every case nor do we say that if you smoke a certain kind or for a certain length of time you’ll get cancer or not …. NONE of that – but a very large consensus of scientists on the order of 98% WILL tell you that there is a STRONG possibility that smoking cigarettes will cause cancer and yet not that long ago – those scientists who said that were accused of being liars and conspiring to fool people about cigarettes and cancer… seems like we even had bunch of court cases on the issue – and as far as I recall, no one ever PROVED that the scientists were 100% correct and yet somehow we decided they were correct “enough” ….

          • TooManyTaxes

            Larry, you are missing the point. I’m not arguing we shouldn’t move or make policy decisions unless everyone agrees. We always make decisions based on less than perfect information.

            But, based on experience, the federal government knows that some research is falsified be it in biology, chemistry or physics. Should the federal government then assume that no climate research is falsified and make decisions based on that assumption? Or should the federal government try to protect against fraudulent research by exposing it and ignoring it in making policy decisions?

            For example, if the Union of Concern Scientists produces a research paper on projected water levels for inland bodies of water as affected by warming temperatures, should the federal government and, indeed, the media, academics or the general public, simply accept the conclusions? Or should the Union of Concern Scientists be first grilled about its 2011 conclusions and research? I’m not suggesting herein that the Union of Concern Scientists has cheated but it’s prior error should be surfaced and reviewed. And maybe there is some fraud.

          • Reed Fawell 3rd

            The best I can discern over the past several decades, the Union of Concerned Scientists has played the roll of the propaganda arm of politicized science. Nothing more, and nothing less, this bunch are religious zealots.

        • Dick – I did not cite fraud in Climate Science but rather, fraud in science generally to show that, indeed, there is fraud across the board. I’m not arguing that because of fraud, we ignore all science and scientist. (We should probably ignore those who have been exposed.)

          Neither am I arguing we should ignore climate science, such that it is, or climate scientists. But society goes beyond that. For many, climate science is religion and religion to a new convert. Despite evidence that there is cheating and fraud in science and known defects in the system (most temperature measurements are not measurements but actually, computer modelling, some of which is adjusted to fit the desired curve), every climate change pronouncement is accepted without challenge. Even consistency is not required.

          Great Lakes Reveal a Fatal Flaw in Climate Change ‘Science’

          A common burglar on trial will be questioned by the DA about prior inconsistent statements but climate scientists are exempt. Why?

          Query: if only 10% of the climate research is fraudulent, is society better off and more likely to make correct decisions if the fraud is identified and discounted or if it serves as part of the basis for a decision?

          Query: Should NIH, the FDA, and other agencies dealing with public health assume all scientific research is spot on in making decisions about the availability of specific drugs or treatments?

  7. “Because a minority of the humans involved will cheat …”

    No, overall, all humans cheat. It’s woven deep into our nature. And, when humans are wrapped into groups, the problem of humans’ propensity to cheat compounds. This too is woven deep into the DNA of all human groups, invariable and irretrievable corruption. Those who fail to learn this profound irrefutable lesson are destroyed by it.

    Plus, most all belief and consensus today is wrong. The truths of any age has almost always been proven wrong, and always will be.

  8. re: ” but, based on experience, the federal government knows that some research is falsified be it in biology, chemistry or physics. Should the federal government then assume that no climate research is falsified and make decisions based on that assumption? Or should the federal government try to protect against fraudulent research by exposing it and ignoring it in making policy decisions?”

    TMT – you go with the consensus of science and make changes as needed – you don’t reject out of hand what 9 out of 10 scientists is sayings.

    Think about the irony here – as people continue to deny the science for climate even as they accept the science for sea level rise.

    It’s as if they reject GW as the cause for sea level rise – and accept what others who are not scientists are saying is causing it – and those folks are using data collected by scientists as the basis of their own conclusions!

    Beyond that – the “deniers” are suggesting that “something” should be done by govt about sea level rise – BUT there is an issue with “moral hazard” with individuals and governments’ role in that moral hazard. In other words, both Govt and individuals deny GW but accept sea level rise but say that “subsidizing” structures in flood plains is bad policy – for individuals but govt facilities, military bases, bridges, roads, water plants, etc… will be made “resilient” or some such.

    We USUALLY go with what the consensus of science says – whether it’s warning labels on cigarettes or warnings on drugs, or weight limits for bridges or designs for dams, predictions for floods or hurricanes but we are not and never will be bullet-proof. We have dozens of flood and hurricane prediction models and none of them is infallible but do we just reject out of hand the modelling technology, the science behind the models or the scientists who capture the data and create the models the data goes into?

    So I have one question…. an honest one. If GW is not the cause of sea level rise – what is? Is it just a natural cycle that we do not fully understand the causes of it? Is that what the folks who reject GW but accept sea level rise – believe?

    • I’m not arguing to ignore what 9 of 10 scientists are saying. Rather, I’m arguing that evidence about fraud in scientific research strongly suggests that some of the 9 scientists have either engaged in fraud or are relying on fraudulent studies. Before we assemble the universe of 10, using your example, we need to know which one or ones has the tie to fraud.

      If we applied the climate rule to other science, the FDA would approve all drugs and medical devices without requiring an investigation into whether the testing and trials were valid, flawed or even fraudulent. Does it make a difference? Sure. Suppose 9 scientists conclude that Drug X will cure brain cancer in 60% of the cases with only a 2% risk of bleeding based on 5 tests and patient trials. The 10th scientists thinks there is an 80% risk of bleeding that will be fatal in all cases. If the trials and tests were all valid, there would be good reason to let the new drug go to market.

      But what if two of the tests or trials had rigged data? Same result? Should the FDA conduct some investigation into the validity of the tests and trials?

      Or suppose a company comes in with Drug Y with tests and trials but has previously predicted outcomes that didn’t come true. Should the FDA simply take the new results at face value?

      Now assume professor Z produces a study that predicts the Potomac River will rise by 2 feet by 2030 but has previously say in 2005 predicted a 2 foot rise in the Delaware River by 2012. And by 2012, the Delaware River rose by two inches ? Should we blindly accept Z’s work? Or what if we learn that professor Z’s previous study contained adjusted temperature data points? Should we blindly accept Z’s new study?

      Remember scientists don’t get new grants if they conclude that a rise in river, lake or sea level is part of a natural cycle. They only get money when they tie change to warming.

      • “Glaciers Appear to be Growing, not Melting in Recent Years

        By Roger I. Roots, J.D., Ph.D.,

        Founder, Lysander Spooner University

        May 30, 2019. St. Mary, Montana. Officials at Glacier National Park (GNP) have begun quietly removing and altering signs and government literature which told visitors that the Park’s glaciers were all expected to disappear by either 2020 or 2030.
        In recent years the National Park Service prominently featured brochures, signs and films which boldly proclaimed that all glaciers at GNP were melting away rapidly. But now officials at GNP seem to be scrambling to hide or replace their previous hysterical claims while avoiding any notice to the public that the claims were inaccurate. Teams from Lysander Spooner University visiting the Park each September have noted that GNP’s most famous glaciers such as the Grinnell Glacier and the Jackson Glacier appear to have been growing—not shrinking—since about 2010. (The Jackson Glacier—easily seen from the Going-To-The-Sun Highway—may have grown as much as 25% or more over the past decade.)

        The centerpiece of the visitor center at St. Mary near the east boundary is a large three-dimensional diorama showing lights going out as the glaciers disappear. Visitors press a button to see the diorama lit up like a Christmas tree in 1850, then showing fewer and fewer lights until the diorama goes completely dark. As recently as September 2018 the diorama displayed a sign saying GNP’s glaciers were expected to disappear completely by 2020.

        But at some point during this past winter (as the visitor center was closed to the public), workers replaced the diorama’s ‘gone by 2020’ engraving with a new sign indicating the glaciers will disappear in “future generations.” … End Quote.

        For balance of article see:

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