UNIVERSITY PARK, Pa. — Patrick Walsh, an economist at the U.S. Environmental Protection Agency (EPA), will give the talk, “Distributional Impacts of Flood Adaptation and Infrastructure Funding in New Zealand,” at noon on Wednesday, Dec. 4, in 157 Hosler Building on Penn State’s University Park campus.
“Floods are the most frequent, economically damaging natural hazard in New Zealand,” Walsh said. “In early 2023, the country experienced the worst flooding in its history, with billions of dollars in estimated damages and over 30,000 insurance claims. Meanwhile, flood management in New Zealand has changed significantly over the past several decades, moving from central government-directed planning to a devolved approach run by local governments. In most regional councils, the devolved approach involves flood schemes, which use targeted taxes to fund flood-related infrastructure. Although these schemes theoretically align incentives by placing the burden of infrastructure funding on those that most benefit from them, resources vary significantly across local governments, yielding concern about the distributional implications. In fact, many localities allow communities to self-select into flood schemes via local votes or meetings. On the insurance side, New Zealand has a unique combination of public and private coverage for homeowners. Insurance policies have traditionally not included additional costs for flood risk and the government covers a portion of flood damages.”
These unique conditions allowed Walsh to analyze several interesting hypotheses around flood adaptation and equitable access. He analyzed several adaptation and flood scheme-related hypotheses by using several spatially explicit national databases of public and private insurance claims. The main Insurance claims data came from the Earthquake Commission, which covers the first $100,000 (NZD) in flood related claims. Initial results suggest that areas with flood schemes have significantly less claims. Walsh also found that flood scheme locations are significantly related to flood risk, as well as local industry and infrastructure. On a broad level, the schemes appear to be deployed in a fashion conducive to protecting local economies. However, results suggest that both flood scheme location and effectiveness is related to local socio-economic factors, especially income.
Walsh’s work at the EPA leverages more than a decade of experience in environmental and natural resource economics to shape and analyze policy. He also previously managed a team of economists focused on climate change, conservation and adaptation research at Manaaki Whenua – Landcare Research in New Zealand. His research centers around environmental economics and policy, but he has also led cross-disciplinary research and large-scale programs in natural hazards, biodiversity conservation and economic development.
The talk is part of the Initiative for Energy and Environmental Economics and Policy fall seminar series.