Economic Tools for Climate Change Adaptation: Private Real Estate Decisions

2015 – All One Sky Foundation

The real estate sector plays a crucial role in providing people with places to live and work, and its assets, infrastructure and longevity are particularly vulnerable to climate change. The impacts of climate change should be addressed at each stage of the real estate life-cycle, from acquisition, through development, occupancy, renovation and redevelopment. A number of “barriers” hamper the ability of markets to efficiently allocate resources to manage climate-related risks in a way that would deliver net social benefits. This situation creates a case for local and provincial government intervention to ensure more socially sound adaptation choices are made by private individuals and businesses.

To better understand decision-making in the real estate sector and where it may break down in the context of climate change adaptation, this report looks at the real estate development process as a whole, before choosing three areas that usefully illustrate the case for intervention. These three stages in the real estate development process include land packaging, occupancy and renovations, and redevelopment, and for each the report explores barriers to efficient adaptation decisions and the possible economic instruments that governments in BC could use to overcome them.

This report was prepared by Dr. Richard Boyd and Jeff Zukiwsky of All One Sky Foundation in collaboration with Tim Pringle of Pringle Strategy Services.

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