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Author: Matthew Kahn
Professor of Economics, University of Southern California

Discussant: Steven H. Strongin 
Head of Global Investment Research, Goldman Sachs

Discussant: Alice Hill
Research Fellow, Hoover Institution

Discussant: Mindy S. Lubber 
President and Founding Board Member, CERES

Moderator: Diane Whitmore Schanzenbach
Director, The Hamilton Project and Senior Fellow, Economic Studies, The Brookings Institution

I used this new opportunity to revisit some of my Climatopolis themes.   But, recognizing that Brookings is an ideologically “middle of the road” think tank,  I have intentionally presented a set of recommendations for government involvement that I am comfortable with.  

On the general topic of climate change adaptation, I believe that we must promote choice under “full information”.  Given that climate change poses several “known unknowns” and given that information about such risks is a public good, government plays a unique role in supplying such information. I do hope that President Trump's team continues to invest in remote sensing so that for each piece of the U.S that we have real time information about emerging threats.  As predicted by the efficient markets hypothesis, such emerging “new news” will be capitalized into asset prices such as real estate and self interested individuals and firms will make many decisions regarding self protection and supply chains based on this information. In this sense, the government plays a key role in allowing the “invisible hand” to work its magic.

My proposal delves into some of the nitty gritty of how to use capitalism to unleash adaptation and to protect the urban poor who due to their limited resources face the greatest risk in adapting to these new challenges.  For young economists, I strongly encourage you to work on the inequality implications caused by climate change.  This is an exciting topic that will make the social justice field a more important academic topic.  For a sketch of some of my recent work on environmental justice (set in China) read this.