Sunny day flooding caused by sea level rise is costing local businesses in one coastal town tens of thousands of dollars in lost revenue, reveals a new study released Friday.
According to the study published in the journal Science Advances, eight businesses in downtown Annapolis, Maryland — where nuisance flooding is a regular occurrence — lost between $86,000 and $172,000 in revenue in 2017 due to these flooding events.
This type of flooding happens frequently during high-tide — no storms or rain clouds required — where ocean water levels rise above levels that coastal infrastructure is built for. Streets and parking lots will briefly fill with water before the tide goes out again, disrupting pedestrian and vehicle traffic in the process.
But the economic impact of nuisance flooding has not been studied much. The study published Friday by researchers at Stanford University is one of the first to examine the financial cost to businesses that have to deal with these increasingly frequent, yet brief, flooding events.
This study “unfolds a new chapter in our understanding of climate change impacts,” Chris Field, director of the Stanford Woods Institute for the Environment and study co-author, said during a news conference. Often, Field said, climate change impacts are viewed only as extreme events like hurricanes or wildfires, but “we’re also seeing increasing evidence that climate change impacts can be packaged in what you might call micro extremes.” Such as sunny day flooding.
Historically, humans built “as close to sea level as possible to facilitate interactions” such as the transport of goods, Field explained. But living by the coast is “transitioning from being an asset to potentially a liability. [And we were] curious about whether this type of micro extreme has real economic impacts.”
According to the National Ocean and Atmospheric Administration (NOAA), the number of high-tide flooding days in the United States has increased 60 percent compared to 20 years ago — from an average two days per year to 11.8 days. With climate change, NOAA expects by 2035 the average will increase to 26 days across 170 different coastal communities.
Using social media posts, photos, government data, tide gauge data, and parking transactions at the City Dock lot in historic Annapolis, the researchers were able to compare flooding events over the past three years. They found that minor high-tide floods reduced tourist visits by 37 percent, moderate floods saw a 63 percent decline in tourist visits, while major flooding resulted in an 88 percent drop.
For every percent loss in visits, the researchers estimated that translated to a 0.61 percent decline in revenue. In 2017, revenue across the eight businesses examined declined 22.5 percent compared to the same time in years prior. This is equal to at least $86,000 in lost revenue.
Using this methodology, and assuming no adaptation measures are taken, the researchers expect that if sea levels rise three more inches, this will represent a 4 percent drop in the number of annual visitors to the area (compared to 2 percent drop observed in 2017). If the sea rises a foot higher than its current level, this will lead to an estimated loss of over 37,500 tourist visits in the area — representing hundreds of thousands of dollars in lost revenue.
Business owners and operators who were interviewed gave a variety responses to the flooding. One said they usually alert their main supplier. Another said there wasn’t much disruption since typically UPS trucks were able to drive through the water. Others said they noticed how they had to replace their tables and chairs more frequently. Overall though, they are “widely adaptive and resilient people,” said Samanthe Belanger, study co-author and Stanford MBA student at the time of the study. “[They are] thinking day-to-day about how we keep this a profitable and successful business.”
And the city is exploring ways to adapt to the frequent flooding. One option could be to install a new drainage pump to pump the water out of the parking lot and back to the bay. But there are lots of options that individuals can take, described Stanford graduate student and study co-author Miyuki Hino. This could include shifting more sales to online, developing communication campaigns to notify customers of flooding, or creating alternative entrances to their businesses. “It really depends on the local context, what the right answer is,” she said.
And while the study only looks at the experience of one city, Field said it’s a useful case study to examine the impacts of an event that is common in many coastal towns. However, “we can’t directly extrapolate the economic costs” to say this is how every other coastal city will be impacted. Instead, “the way to understand this study is it opens the doorway to understand how pervasive and consequential this kind of event can be.”