Sarah Peterson, Director, Sustainable Investing

Physical climate risk refers to the potential damage to properties caused by natural disasters such as flooding, wildfires, hurricanes, and extreme temperatures, all of which are becoming more frequent and severe due to climate change. 

In today’s challenging market, leveraging data to gain a deeper understanding of climate risk and resilience may be the difference between an accretive or non-accretive investment. 

1. Direct Damage from Extreme Weather

2. Rising Insurance Costs & Reduced Coverage 

“Real estate is no longer guaranteed to go up and to the right. Climate change combined with other macro drivers such as interest rates and disruptions like demographic shifts and remote work heighten the need for deep, data-driven research and robust scenario planning to pick the winning locations of the future.“ 

Parag Khanna, CEO of Climate Alpha

3. Coastal Market Devaluation 

There is growing evidence that climate risk in coastal markets, which are susceptible to storm surges and flooding, has already affected residential real estate prices. More specifically, a 2018 study performed by Pennsylvania State University and the University of Colorado indicated an average 7% “sea-level-rise discount” for non-owner occupied coastal residential properties. Similarly, First Street Foundation released data showing that eight states lost a combined total of $14.1 billion in coastal home value since 2005 due to sea-level-rise flooding. 

4. Climate-Related Risk Regulation 

5. The Rise of ESG Motivated Capital 

Overall, considering climate risk is important for real estate investors who want to protect the long-term income and value appreciation while staying ahead of regulatory requirements. For more information on how Climate Alpha can help you get ahead of the impacts from climate volatility book a consultation with our team.

Yahoo News’ David Knowles explores the best and worst places to live in the American Southeast — “one of the most-threatened regions of the country” due to climate change. Drawing on data provided by the Rhodium Group, the site unsurprisingly ranks Louisiana coastal counties among the most vulnerable, and the mountainous southwest corner of Virginia as the most resilient.

The fact a mainstream news organization is framing the issue this way is to testament to how quickly the once-verboten conversation around climate migration is changing. “With Hurricane Ian, I think we’ve seen a conversation at a much more acute pitch and much more rapidly moving in the direction of ‘Do not rebuild here. Do not come back here. We should not be putting taxpayer money into this.’ And those families should not be putting their entire net worth into that place again,” Climate Alpha’s CEO Parag Khanna told Knowles. “The accelerating frequency of these disasters is contributing to that change in mood which is reinforcing what policymakers know they must do.”

At Climate Alpha, we’re building tools to identify climate risks and opportunities that go far beyond top ten lists. Our Resilience Index™ calculates comprehensive risk scores for every county in the country, while our Alpha Finder™ scours 40,000 ZIP codes for the highest-performing communities and properties. Visit www.climatealpha.ai to learn more about how our tools can help you identify where the world is heading — and get there first.

#climaterisks #climateadaptation #climatemigration #realestate #flooding

LINK: https://news.yahoo.com/finding-safe-haven-in-the-climate-change-future-the-southeast-090054441.html

Southeast and West are at higher risk of disruptions due to changing weather patterns, futurist says

People who relocated during the pandemic favored areas at higher risk of disruption due to climate change, but they may come to regret those moves over the long term, futurist Greg Lindsay told a gathering of the Denver Metro Commercial Association of Realtors on Thursday morning.

“Americans are moving in the wrong direction,” Lindsay said of migration patterns during the pandemic, and even before. “Markets are underpricing climate risk.”

Wrong as in moving from cooler northern coastal areas and the upper Midwest to the Sunbelt. Wrong as in moving to Arizona and Nevada, popular states that suffer from ever-increasing temperatures and worsening drought. Wrong as in flocking in large numbers to coastal Florida and Miami, where rising water levels could submerge vast swaths of land in coming decades if powerful hurricanes don’t scrape them first.

Texas and Florida were the top inbound states for those relocating during the pandemic, according to the Federal Reserve Bank of Chicago. Speaking generally, the southeast and the western U.S., including Colorado, are much more vulnerable to the impacts of climate change than other parts of the country, according to Climate Alpha, a startup where Lindsay is chief communications officer.

But climate impacts can be very specific. Climate Alpha uses artificial intelligence to determine a “climate resilience” score for more than 40,000 ZIP codes. It then applies those risk scores to determine future real estate values under different scenarios.

Custer County, for example, was a popular landing spot during the pandemic in Colorado. But it also has one of the highest drought risk scores in the country, Lindsay said.

A higher altitude shields Colorado from the extreme temperatures seen in states further south, but not from drought. The northern Front Range will likely struggle with water shortages that limit future growth as the region dries out, he said.

“Even in Colorado, things are getting strange,” Lindsay said. Strange as in the Marshall fire, where 100-mph-plus winds fanned flames in late December that quickly destroyed more than 1,000 homes deep in the populated suburbs of Boulder County, including homes of climate scientists working at the National Oceanic and Atmospheric Administration.

Where should people who want to provide their children and grandchildren with a more secure future look to move?

Lindsay suggests that the great migration to the Sunbelt may reverse, replaced by a migration to the Great Lakes region. Buffalo, New York, could become the new “cool” place. Some investors are buying up land in Ohio and others are targeting purchases in Canada. Lindsay told the audience he relocated to Montreal.

The Great Lakes region has developed infrastructure, lower real estate prices and the potential to provide a strong return for those who get in early, he said. Bonus points if more manufacturing comes back to U.S. shores.

But there are a lot of other factors that go into the decision to move, such as quality of life and connectivity, or the ability to travel to other areas. Part of the problem is that people relocating often don’t have a good grasp of the climate risks involved in a new place. Redfin, the real estate brokerage, found that when people are provided with flood risk scores, they were much more likely to choose safer areas.

“We now have definitive evidence that the risks posed by climate change are affecting where Americans choose to live. Before Redfin’s experiment, that was just a hypothesis,” said Redfin chief economist Daryl Fairweather in a news release earlier this month. “Equipping people with flood-risk information helps them make more informed decisions. Some will opt to move out of risky areas altogether, while others will stay put but invest in making their homes more resilient to disaster.”

Companies around the world are increasingly committing to climate change mitigation, pledging to reduce carbon emissions and water consumption across their operations and supply chains in an effort to slow the pace of global warming and better protect environmental ecosystems. However, while essential, these efforts merely prevent a worse future rather than addressing the inevitable consequences of the damage already baked in. Carbon offsets, for example, have yet to demonstrate meaningful impact on the atmosphere, and, at present, worldwide carbon sequestration efforts reportedly only remove 1% of annual global emissions.

We therefore believe that climate adaptation — helping people, animals, and plants to survive despite rising climate volatility — should be an equally urgent priority. According to a 2021 report from the Climate Policy Initiative, these types of initiatives receive only 7% of climate-related investment, allocated across a vast spectrum of needs such as flood and wildfire prevention, resilient agriculture, clean water supply, infrastructure modification, and population resettlement. They deserve far greater business investment, especially because they represent near-term opportunities at lower capital expenditures that offer faster paybacks. Indeed, according to this Bloomberg report, Bank of America analysts estimate that the climate adaptation market could be worth $2 trillion a year within the next five years.

Fundamentally, climate adaptation is about evolving organizational and institutional practices and infrastructures and technologies in places that most need them — which is everywhere that faces risks such as floods and rising sea levels, droughts, and heat waves. We advocate for solutions that are low cost, proven to be effective, and have immediate impact, such as early warning systems for extreme weather events, coastal barriers, water desalination and wastewater treatment, vertical farming and hydroponic agriculture, improved cooling and insulation systems, 3D printed and modular housing, and many other measures.

The insurance conglomerate SwissRe warns that a global temperature rise of 3.2°C by 2050 would wipe 18% from global GDP. But, as a pair of OECD studies point out, widespread climate adaptation measures can have a positive impact on growth, especially in G-20 economies.

When governments, capital market investors, commercial lenders, and businesses from multinational corporations to small enterprises work together toward climate resilience, as well as mitigation, the result will be a stronger world economy. Some are already stepping up to do so. For example, the Coalition for Climate Resilient Investment (CCRI), an umbrella organization of more than 120 companies and other stakeholders representing more than $20 trillion in assets, have launched pilot projects focused on reinforcing infrastructure to withstand anticipated climate effects. We see notable positive developments in other areas as well. Here, we’ll explore projects in water and agriculture and in construction and real estate.

Water and Agriculture

Water scarcity is already a short-term crisis and an even greater long-term challenge that even the most robust mitigation initiatives cannot immediately address. Water is the biggest and most important input for human life and global agriculture and is thus essential for our health, sustenance, and productivity, and yet many heavily populated geographies are already stricken by shortages.

Some of the most affordable water-related adaptation interventions involve rainwater harvesting and more efficient irrigation techniques. As countries invest in cloud seeding to spur rainfall, plant drought-resistant seeds, and deploy atmospheric water capture systems, conserving water for agriculture is an obvious complementary effort. London-based engineering consultancy Arup (which reports nearly $2 billion in annual revenue) has been ahead of the curve in carrying out flood control projects that increase natural water retention in Poland and flood alleviation schemes in England. Rainwater harvesting projects now represent a 5% and growing share of the portfolio of Kingspan, a leading Irish construction company whose low-energy insulation systems are featured in Bloomberg’s London headquarters and Singapore’s Changi airport. The city of Sydney, which has suffered consistent droughts with dams falling to record low capacity, has commissioned Kingspan to audit all 48 of the city’s rainwater management systems.

There are also signs of progress in developing countries. Israeli firm Netafim (a $1 billion revenue company) has installed irrigation systems across more than 100 villages in India, using soil and plant data to direct measured doses of water to optimize yield while bringing down water consumption and fertilizer usage by 40%. Olam, one of the world’s largest agri-business producers of rice, cotton, cocoa beans, and coffee that operates in 60 countries, is committing to reduce wastewater in the 30% of its upstream farms and plantations that are in water-stressed regions.

The economic benefits of water conservation include saving money on water purchases, storage, and maintenance, all of which accrue to corporations and villagers alike. Particularly in regions such as India, where only 10% of potential water-saving measures have been implemented, these kind of adaptation efforts deserve significantly greater investment and scaling.

Clean water generation is another essential and growing business opportunity. Existing desalination systems are often oil- or gas-powered and use a lot of energy. By contrast, Elemental Watermakers’ solar-powered reverse osmosis system uses the natural force of gravity to receive and clean pressurized seawater and is compact and mobile enough to be deployed in industrial sites and residential communities. One of its customers in Aruba has reduced water costs by 67% and carbon emissions by 180 tons per year. Another company, Terraformation, meanwhile operates what might be the largest full-scale, purely solar-powered water desalination plant on a 45-acre reforestation project site in Hawaii. However, similar ventures remain woefully underfunded despite their regenerative potential for ecosystems and local economies. Perhaps the most high-potential innovation would be nuclear-powered desalination, which would have enormous applications worldwide.

A steady and efficiently managed water supply would also support more environmentally friendly agriculture such as hydro- and aquaponic food production. China’s Sananbio, for example, operates large indoor farms in Beijing that can produce about six tons of leafy greens daily using only 5,000 square meters of space. Its plants absorb 60% of the water used, while the remaining 40% is recycled. Small and strategically vulnerable countries such as Israel, the United Arab Emirates, and Singapore have become leaders in this kind of food production, and it could greatly benefit many other water-stressed geographies.

Construction and Real Estate

Our built environment is a major driver of climate change and must also be a key front in adaptation. Because of their fixed location, real estate assets — valued at $200 trillion worldwide — are uniquely vulnerable to natural disasters and resource shortages. And many opportunities lie at the intersection of geography and technology. For example, from the Netherlands to Denmark and the Maldives to Singapore, developers and localities are planning or building floating cities that can rise with the tides and desalinate and recycle water for hydroponic agriculture.

Astro Teller, director of the Google X Lab, suggests that we might also one day need “movable cities” to cope with climate effects. As a first step, companies like ICON are creating 3D-printed houses. Its Vulcan construction system can deliver homes and structures up to 3,000 square ft that meet the requirements of the International Building Code (IBC) and are expected to last as long or longer than standard Concrete Masonry Unit (CMU), making them more resilient to extreme weather. They’re the first of their kind to be sold in the United States and the firm, currently valued at around $2 billion, is working with leading U.S. home-builder Lennar to construct a community of entirely 3D-printed homes in Austin. In both Mexico and the United States, ICON is also building entire communities of 3D-printed homes, barracks for those who serve, and a simulated Martian habitat for NASA.

Similarly, Boklok produces flat-pack homes designed and built by Skanska and sold at Ikea. The houses are primarily made of wood sustainably sourced from Scandinavia because of its relatively lower climate impact, and about 14,000 of them have been erected across Sweden, Finland, Norway, and the United Kingdom, generating $250 million in revenue for the adaptation-focused manufacturer.

According to UN Habitat, at least three billion people will require better housing by the end of this decade, which means that 96,000 new homes need to be built each day between now and then. Eventually, rather than building these habitats where people are, we will need to start moving certain populations to geographies less damaged by climate change, at lower risk of future effects, and with better resources and technology. Rising fire and flood insurance premiums, as well as chronic droughts and heatwaves, make this all but inevitable.

Our own Climate Alpha research suggests that investing early in climate-resilient geographies will generate more than 70% higher returns on real estate portfolios by 2030 alone. Property developers, asset managers, and insurers should take heed, accelerating the acquisition of land, construction of affordable housing, and adjustment of premiums to anticipate, encourage, and profit from climate-induced migrations. New technologies should help us to do this with speed. Consider the U.S.-based company Alquist, which can now print a three-bedroom home in just over 24 hours versus the typical four weeks that the volunteer-powered nonprofit Habitat for Humanity takes to construct one.

Addressing climate change requires both mitigation and adaptation, and we believe the latter represents an even better business opportunity. As we learned from Charles Darwin, those who adapt are the most likely to survive and thrive. Small investments result in significant preparation for an unpredictable future.

At the same time, President Biden — home from COP26, the United Nations climate summit — claimed victory with the passage of the bipartisan Infrastructure Investment and Jobs Act, which promises more than $1 trillion in funding for renewing transportation and utilities, and enhancing broadband Internet access.

But as weather events like that in the Pacific Northwest show, the president’s Build Back Better agenda is already deeply at risk from climate change. So it’s crucial, as the United States deploys tremendous new spending to rehabilitate infrastructure, that its leaders think much harder about where the funds are spent to avoid throwing good money after bad.

Six of the United States’s wealthiest cities — Boston, New York, Miami, Houston, Los Angeles and San Francisco — are heavily exposed to climate change. Frequent storms, rising sea levels, forest fires and droughts will plague these great cities more and more. Their budgets will be strained by the billions to be spent on adapting infrastructure and moving people farther inland. For now, they can afford to.

Other cities can’t. Climate models make clear, for instance, that New Orleans is going the way of Venice. In 2005, Hurricane Katrina destroyed thousands of miles of power lines and caused $161 billion in damage in Louisiana and Mississippi. Last year, Hurricane Laura brought Category 4 winds and destroyed nearly 2,000 transmission structures.

Residents need their electricity. But spending billions to reinforce or rebuild power lines isn’t a good investment when they’re sure to be destroyed again.

Not every place stricken by natural disaster should be abandoned. Where populations continue to grow, or where there is indigenous will and investment to rebuild, there is hope for recovery. That is not the case for places such as New Orleans, where populations are declining and no new job opportunities are emerging.

The country must realistically assess which geographies are becoming unlivable and which are well suited to larger population settlement. It should then offer incentives for migration toward the latter and away from the former — and direct infrastructure spending accordingly.

Climate models tell us that states such as South Dakota, Missouri and Pennsylvania are becoming more livable over time and ought to gain in population. It makes sense to spend more on roads and renewable energy in those states and others with a similarly stable climate outlook.

Cities such as Atlanta, Dallas and Charlotte are already gaining climate migrants from elsewhere in the South. Millennials and Gen Z-ers have been snapping up houses in New Hampshire and Idaho, and fueling the buzzing tech scenes in Salt Lake City and Indianapolis. They’ve poured into so-called 18-hour cities such as Denver and Nashville that have lively after-work cultures in their downtowns.

A coalition of agencies, including the Federal Emergency Management Agency, the Department of Housing and Urban Development and the Army Corps of Engineers, is pushing an agenda of “large-scale migration or relocation.” The many distressed communities that qualify for the government’s Opportunity Zones, which are eligible for tax-free investment, should be filtered for climate resilience. This would create new jobs in places that need them.

Property developers should lure displaced Americans to gentrify the Rust Belt along the Great Lakes. The people of New Orleans should be given one-way tickets to Detroit, where they can contribute to the city’s nascent postindustrial revival.

A sensible plan to promote migration to climate oases could also ameliorate some of our bitter immigration and trade debates.

The country could import workers with the skills it needs and issue them “place-based” visas, directing them to areas with labor shortages. It could encourage the building of more eco-friendly, multifamily and multigenerational homes, which would hog less space than single-family plots. With more relatives under one roof, there would be greater freedom for working parents and less need for imported labor — which, granted, would mean a cultural shift for many Americans, though one whose appeal might have become clearer during the covid-19 pandemic.

Land not eaten up by sprawling cities and suburbs could be repurposed for agriculture and industry, as well as to fortify the country’s irrigation, energy and transportation networks to achieve greater self-sufficiency.

Mammals are wired with a fight-or-flight instinct, and the residents of devastated coastal areas should heed that instinct’s call to move to safer ground. It would be far wiser to encourage the next great migration than the next climate disaster. This is the way — and the where — to build back better.

This decade marks the beginning of climate change taking a permanent place in our headlines — and humanity taking seriously the need to adapt to it. While climate consciousness has risen over the past 20 years and more, concerted diplomatic and industry efforts to reduce greenhouse gas emissions and other damage to our vital ecosystems are phenomena of the past decade only. Climate mitigation now dominates the international agenda. Indeed, an overwhelming 95% of total climate-related spending is focused on reducing the carbon intensity of industry, greening supply chains, and other measures.

The onus to adapt to climate change is on us

Yet the blunt reality is that global warming and sea level rise continue apace, and even the most ambitious geo-engineering schemes will not return our climate to the familiar conditions of 1990, 1900, or 1800. Our environment is a complex system undergoing modification and lurching in new directions. It will not adapt to us — we must adapt to it.

That is why, as existentially vital as mitigation investments are, an equivalent emphasis is needed on climate adaptation. Adaptation measures include building coastal defenses and flood control measures, retrofitting buildings with more passive heating and cooling technologies, relocating critical infrastructure to less volatile geographies, and large-scale population resettlement. As I explain in my new book MOVE, the number of climate migrants may exceed one billion in the coming decades as the ‘climate niche’ of locations for optimal human habitation shifts.

Multiple factors at play when considering where to invest

Climate adaptation is made even more complicated by the fact that it is not the only variable shaping our future geography. Covid and the search for quality healthcare it provoked, remote work and the desire for a better work-life balance, economic shocks, supply chain vulnerabilities, and political risks such as domestic and international conflicts — all of these factors must also be weighed when considering where to invest in personal property and commercial real estate assets.

Given the illiquid nature of real estate, this USD 200 trillion markets is relatively unprepared to adapt to such rising complexity. Indeed, the Bank of International Settlements warns of “green swan” events, namely, unexpected environmental catastrophes linked to global warming, that would cause a financial crisis with worldwide consequences, and Canadian economist and former Bank of England governor Mark Carney fear that a “climate Minsky moment” — a sudden change in investor expectations about future climate policies and the resulting fire sale of affected assets — is coming that portends a significant reckoning for today’s assets. New regulations around both transitional and physical risk are raising compliance costs and forcing the industry to adjust. Recently, a bevy of climate risk related companies have made clear which geographies are most vulnerable and should not be held for too much longer, but this is insufficient for a constructive asset allocation strategy.

Climate Alpha identifies future ‘climate oases’

At FutureMap, we launched Climate Alpha to provide the marketplace of asset managers, insurance firms, real estate developers, and others — whether pension funds or family offices — with a data-driven approach to navigating property markets in light of the unpredictable future that lies ahead. Rather than merely telling you where to sell, Climate Alpha guides you on where to buy, based on geographies that are relatively less affected by — or even benefit from — climate change, as well as demographic, fiscal, and other key trends.

Climate Alpha thus identifies the ‘climate oases’ of the future — and luckily there are many, whether in North America, Europe, or Asia, the epicenters of the world economy and real estate markets. Fortunately, some of the more climate resilient states also offer investment migration programs, whereby investors can acquire and secure an alternative residence or second citizenship in a different jurisdiction in return for investing in a host country, including Canada, Switzerland, the UK, and the USA.

The ingredients in our AI-powered formula are hundreds of datasets covering all the variables that have historically shaped property prices, melded together with geolocated climate models. We calibrate future price forecasts according to the risk, vulnerability, and readiness characteristics of each location. Machine learning is essential for this task because of the large number of indicators and the relative nature of outcomes. For example, four cities in close proximity may have similar climate profiles, but the one with higher preparedness will gain population and thus appreciate in value at the expense of others.

Investors should use this data to consider which assets to dispose of, which geographies to increase exposure in, and what time horizon to invest for. Furthermore, they should look closely at the immigration policies, investment regulations, and other characteristics of potential destinations for themselves and for their capital. These strategies together are the playbook to generate higher real estate yield despite the many potential climate, political, and economic scenarios with which we must grapple.

Climate adaptation should not be a matter of emergency response

Our vision goes far deeper than returns, however. We believe that big data can enable a gradual and peaceful new map of human geography. We have the geospatial tools, technical foresight, financial instruments, and logistical capacity to empower the world population to be both more mobile and more sustainable at the same time. We therefore believe in a world order beyond today’s sovereignty. While the globe will always be divided among sovereign nations, our geography can be programmed to optimize resources, industry, and demographics. This is the kind of thinking the world needs if we wish not only to mitigate climate change, but to successfully adapt to it as well.

Last month, President Biden issued an executive order directing government agencies to assess the risks climate change poses to federal assets, budgets, and investments. Presumably, this order also applies to the American Jobs Act, Biden’s $2.25 trillion plan to electrify transportation, build millions of energy-efficient homes, and upgrade to a more renewable and resilient power grid. Together with the proposed $1 trillion Green New Deal—which is aimed at creating new, green jobs and investments in frontline communities bearing the brunt of environmental injustice—they offer a blueprint for both cutting U.S. carbon emissions in half by 2030 and doing so equitably.

But neither plan explicitly grapples with the politically thorny question of where to invest. Should the money follow the people, who have flocked for decades to the Sun Belt, where homes are cheap and jobs are plentiful but climate risks mount by the day? Or, following the logic of Biden’s own order, should funds be directed to more resilient regions where people might move someday? If it’s indeed the latter, let’s make the Great Lakes great again. Not only is the region projected to avoid the most egregious climate impacts, but it also possesses an abundance of affordable housing, room to grow, and a commitment to equity and sustainability. Funneling growth there would not only address the legacies of disinvestment but create new opportunities for those who will need to move by providing dedicated resources for climate migrants relocating from other parts of the country.

The decisions can no longer be put off until the future. New data from the EPA reveals temperatures are rising, precipitation patterns are changing, and abnormal weather is the new normal. The problem is that development is still booming in some of the areas of the country most at risk.

Extreme heat is the number-one weather-related killer, but many of the country’s fastest-growing cities—Miami, Phoenix, and Austin among them—are already hot, and getting hotter. But Phoenix still grew by an average of 200 people per day for the last decade, despite breaking its own heat-related records in repeated succession in 2020, including number of days over 110 degrees. To save lives during extreme weather, we need air-conditioning, and lots of it. But abnormal weather, which is becoming the new normal, puts tremendous strain on electrical systems, as seen during Texas’s deadly winter storm. Summer blackouts may become even more common, and deadlier, as temperatures soar. The energy required to save lives during these events directly threatens emissions-reduction targets, and makes our planet even hotter.

Things aren’t much better along the coasts. Around the country, more than 300,000 homes (worth $117.5 billion) will be at risk of chronic inundation from rising sea levels by 2045. But despite the increasing availability of flood-risk data, homes are still being built two to three times faster in the riskiest areas of Florida, North Carolina, and New Jersey. The most vulnerable homes in California are appreciating the fastest.

The bipartisan Flood Resiliency and Taxpayer Savings Act would require federally funded projects to incorporate climate projections into their design, so vulnerable municipalities may struggle to win increasingly competitive national competitions for resilience dollars or borrow money as their credit ratings fall. Coupled with rising flood insurance premiums and stringent building code updates, these market shifts could result in budget cuts and housing price drops that could create a positive feedback loop of decline. As far back as 2016, Freddie Mac’s chief economist warned that losses from flooding coupled with panic selling are “likely to be greater in total than those experienced in the housing crisis and the Great Recession.”

The federal government’s strategy for permanently mitigating flood losses happens primarily through post-disaster buyout programs, which suffer from inconsistency, inequity, inefficiency, and a failure to address more systemic needs. That’s why, in 2020, the Government Accountability Office recommended Congress take action to develop an interagency climate migration pilot program “to enhance the nation’s resilience and reduce federal fiscal exposure.”

But climate migration—when people move due to experienced or expected climate impacts—is already taking place. An April survey by Redfin found nearly half of Americans planning to move this year factored natural disasters in their decision, bolstering a previous study indicating buyers will incorporate climate considerations when moving in the decade ahead. So where will people go?

This is where the Great Lakes and Green New Deal come in.

Some are already calling the Great Lakes the country’s climate refuge, thanks to mild weather and an abundance of natural resources, including an estimated 20% of the world’s surface freshwater resources. Buffalo has already proclaimed itself a “climate refuge city,” resettling hundreds of Puerto Rican families after 2017’s Hurricane Maria. These so-called receiving cities are the places where people will relocate to escape intolerable environmental hazards in their own communities.

Once the nation’s economic engines and manufacturing hubs, Great Lakes “legacy cities” such as Detroit, Cleveland, and Buffalo have suffered from decades of redlining, segregation, and political negligence. White flight and disinvestment led directly to years of contaminated water in Flint and similar crises. But these cities never abandoned their hopes for a renaissance, still possessing anchor institutions such as universities and hospitals, not to mention the capacity to house populations twice as large as today’s residents.

Forced to grapple with a shrinking tax base, they’ve also became leaders in sustainability. For example, Flint, Michigan; Worcester, Massachusetts; and Rochester, New York, are remediating contaminated land to create new amenities. In Ohio, Akron, Cincinnati, and Cleveland have focused their efforts on racial equity and resilience. Dayton, Toledo, and Detroit welcome refugees and immigrants to cope with population loss.

No place is immune to climate change, but these cities offer a solid foundation for investing in hard infrastructure and providing frontline communities with green jobs, affordable housing, and freedom from egregious climate risks.

What about people living along the coasts and in flood plains? Don’t they deserve green jobs, too? How do we ensure communities on the literal front lines—the ones who can’t move—aren’t left behind? And how can we ensure Great Lakes communities aren’t gentrified by wealthy climate migrants or barricaded by NIMBY homeowners already present?

The trick is to link the two: earmarking $500 billion for climate mitigation to frontline communities, as the Green New Deal for Cities would do, but also to make robust infrastructural investments in areas like the Great Lakes that are destined to be a refuge for people seeking relief from climate change. A robust federal climate migration pilot program must identify places where relocates will move to, including by leveraging other federal resources to cities and states that build resilient housing and economic opportunities in safe locations.

One tool legacy cities have wielded to preserve future affordability is land banks and land trusts, using public money to acquire and insulate properties against market appreciation. The American Jobs Act will reportedly include $318 billion to preserve or produce 2 million units of housing, including $45 billion for the National Housing Trust Fund established under President Obama to subsidize shelter for the poorest Americans.

Once again, it’s not only a question of how much, but where and for whom. The Biden administration should ensure those funds are steered toward land banks and land trusts in more resilient areas, using the EPA’s indicators as guides, and offer green jobs recipients in frontline communities priority access to affordable housing under these plans.

The federal government has the power to persuade with its dollars, by directing targeted investments to cities and regions where people could or even should move, with a once-in-a-generation opportunity to steer Americans to safety on higher ground. Funneling targeted infrastructure spending toward regions with fewer climate risks and providing dedicated resources to help climate-affected communities relocate can reap the benefits of mitigation and adaptation simultaneously. It can also ensure the longevity of these programs, providing a new legacy for the rest of the world to live up to.