Editing IPCC:AR6/SROCC/Chapter-5 (section)

===== 5.4.2.3.3 Property values =====

The integrity of ecosystems and their services can affect the value of human assets, particularly coastal properties and infrastructure (Hoegh-Guldberg et al., 2018 <sup>[[#fn:r1557|1557]]</sup> ). Climate change is expected to have negative impacts on coastal properties and their value through the loss and damage caused by SLR, increased storm intensity (hurricanes and cyclones), heat waves, floods, droughts and other extreme events, particularly in tropical SIDS (Chapter 4). Natural disasters already cost Pacific Island Countries and Territories between 0.5‒6.6% of GDP yr -1 (World Bank, 2017 <sup>[[#fn:r1558|1558]]</sup> ), with localised damages and losses from individual storms far exceeding these estimates (e.g., 64% of Vanuatu’s GDP for Cyclone Pam in 2015). The impacts of natural disasters on Jamaica’s coastal transport infrastructure are currently estimated to be a significant proportion of their GDP, and such costs are projected to increase substantially in the next few decades under climate change (UNCTAD, 2017 <sup>[[#fn:r1559|1559]]</sup> ; Monioudi et al., 2018 <sup>[[#fn:r1560|1560]]</sup> ). In 2015, tropical storm Erika devastated Dominica causing 483 million USD in damages and losses (mostly related to transport, housing and agriculture), equivalent to 90% of Dominica’s GDP (World Bank, 2017 <sup>[[#fn:r1561|1561]]</sup> ). For the USA, Ackerman and Stanton (2007) forecast that annual real estate losses due to climate change could increase from 0.17% of GDP in 2025 to 0.36% in 2100, with Atlantic and Gulf Coast states being the most vulnerable. Other North American studies have shown that informed coastal property owners are willing to initially invest in infrastructure to counter climate change impacts (McNamara and Keeler, 2013 <sup>[[#fn:r1562|1562]]</sup> ); however, they would avoid further investment if adaptation costs increase substantially and there are greater risks of long-term impacts (Putra et al., 2015 <sup>[[#fn:r1563|1563]]</sup> ).

The impacts of changing marine ecosystems and ecosystem services on the value of human assets need to consider the risk perception, future development and adaptation responses of human communities (Section 5.5.2, Chapter 4) (Bunten and Kahn, 2014 <sup>[[#fn:r1564|1564]]</sup> ). For example, the potential for climate impacts on the value of coastal real estate will depend on the changing insurance market or the cost of adaptation measures, which in turn depend on the willingness to pay by asset holders and wider society, including local and national governments. Further research is needed to discount valuations for potential losses that may occur in the future but with uncertain occurrence, and to improve real estate loss estimates over local to regional scales.

Marine ecosystem services contribute to climate moderation and coastal defenses (Section 5.4.1.2). However, while the above studies in this section acknowledge the contribution of many climate impacts on real estate and infrastructure through ecosystem losses and degradation, often they are not accounted for in quantitative economic impact assessments. Overall, there is ''high confidence'' that SLR, increases in storm intensity and other extreme events will impact the values of coastal real estates and infrastructure, particularly in tropical SIDS, through the risk and impacts of direct physical damages. However, there is ''low confidence'' that impacts due to underlying loss and damage of ecosystems and their services are being similarly accounted for.

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