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Rewarding dumb growth

Remember how the gas tax holiday was a bad idea? This is kind of like that:

> As hurricane season begins, Democrats in Congress want to nationalize a chunk of the insurance business that covers major storm-damage claims…

> Big winners would be coastal states, particularly Florida, where more than half of the nation’s hurricane risk is centered. Currently, property-insurance rates in Florida are among the highest in the nation. Florida also has a struggling state reinsurance fund that would be helped by a federal program.

It is unknown whether global warming is making hurricanes more severe, although the evidence is highly suggestive. What is clear, as outlined in Chris Mooney’s interesting *Storm World*, is that we’re horribly unprepared for the threat even as it now stands.

The WSJ frames the insurance plan as a federal money grab that rewards a handful of coastal states and punishes everyone else, but it seems to me actually worse than that: Florida really isn’t well-served by schemes that encourage irresponsible coastal development. (Likewise, it’s nice for New Orleans that the federal government just forgave $17 billion in debt, but what would have been really awesome is *not being destroyed*.) No one really wins in this scenario, other than — wait for it — insurance companies.

Adaptation to global warming doesn’t get a lot of policy love, but it’s something we need to start taking a lot more seriously. Like weaning ourselves from fossil fuel, adaptation is a long-term project requiring the application of the right policies and incentives. And one free lunch on the adaptation front would be to stop subsidizing housing in our most disaster-prone areas.

(Hat tip: Environmental Economics)

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