Study says climate change could impact the rapid growth along the NC, SC coasts

When someone puts out a Top Ten list and your city is listed on there, that's normally a good thing.

But this is one list Wilmington wishes it wasn't on. Neither does Jacksonville, Greenville or Myrtle Beach, S.C.

Moody's Analytics, an economic research firm, recently analyzed which U.S. cities' economies are most at risk to climate change impacts over the next 30 years.

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Adam Kamins, director of regional economics at Moody's Analytics and author of the recent study, said climate change is increasing risks for everyone, nearly everywhere.

“Every year it becomes increasingly crystal-clear, just the amount of risk that we face, whether it’s increasingly severe natural disasters or droughts and heat risk,” he recently told the USA Today. “In some cases it’s creating renewed momentum or brand-new momentum for governments and businesses that hadn’t been thinking seriously about the impact of climate change before.”

What factors do analysts like Moody's look at?

The company looked at two types of risk when analyzing an area's exposure to climate change.

The first was physical risk from events like hurricanes, wildfires and flooding.

The second factor was transitional risk involving changes that are taking place over an extended period of time. That list includes drought, rising temperatures and sea-level rise. Moody's noted that while physical risk is primarily focused in coastal areas and Western U.S. states prone to wildfires, the risk from transitional impacts covers a much broader section of the country.

How did Wilmington fare?

Well, not good. But the Port City wasn't alone, especially when it came to the dangers from acute physical hazards.

"Nowhere is this more pronounced than along the Carolina coast, with the stretch from Jacksonville, N.C., to Charleston, S.C., facing the greatest threat," states the report.

According to Moody's study, the six U.S. metro areas with economies most exposed to acute hazards are all in the Carolinas: Jacksonville, New Bern, Myrtle Beach, Wilmington, Greenville and Charleston.

The metros most exposed to heat, sea-level rise and water stress were more geographically diverse. The top five were San Francisco; Cape Coral, Fla.; New York City; Long Island, N.Y.; and Oakland, Ca.

Will climate change economics have an impact?

When businesses are deciding where to set up shop and residents are looking at where to establish roots or retire, they look at a number of factors.

Climate risk is becoming one of those factors, officials say.

"The long-term economic risks associated with climate change have rapidly moved to the forefront for banks and policymakers," states the Moody's report.

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This is especially true for insurance companies, who have been walloped by massive payouts tied to natural disasters like hurricanes and wildfire in recent years.

A string of strong hurricane strikes along the Gulf Coast in recent years has seen several insurance companies leave states like Louisiana and Florida. That's left property owners in those areas stuck with fewer choices and higher rates − a problem that's been exacerbated by last year's destructive Hurricane Ian.

"Ultimately, the cost and availability of insurance, combined with damage to the housing stock from storms, represent the two most direct channels through which house prices are affected by climate change," the Moody's report states.

Kamins doubled down on that sentiment on Wednesday. He said some coastal states have been stepping up to fill in the policy gaps left by insurance companies pulling out of markets they deem to be too risky, largely shielding residents from higher costs.

"That practice is unsustainable without significantly higher taxes or drastic spending cuts elsewhere, and neither of those is likely," Kamins said via email. "So eventually these dynamics will come to a head and the insurance market will make places unaffordable or even uninhabitable, although that is probably at least a couple decades away from happening on a large scale."

One-two punch of rising rates for many NC residents

In North Carolina, many coastal homeowners are already seeing an increase in their flood insurance rates as the Federal Emergency Management Agency looks to make the National Flood Insurance Program, which provides flood coverage to the vast majority of property owners, a financially viable program instead of one drowning in debt.

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The move to develop a risk-based approach to determining premiums, however, has seen homeowners facing sticker shock when they try to renew their federal flood insurance policies.

Last year the First Street Foundation, a New York-based nonprofit research and technology group, released a report stating that the average flood insurance premium for North Carolina properties within the 100-year flood plain and with a federally backed mortgage, which makes flood insurance mandatory, was $986 a year. That would have to increase by 223% to reflect the true cost of insuring the flood risk those properties face. It would have to nearly double again by 2050 to mitigate the expected higher risks tied to climate change.

What does the study predict?

As physical and economic impacts from climate change begin to bite, Moody's said it's possible that migration patterns could change as people seek safer, economically more stable areas to live. That could mean a slow down in growth in Southeastern coastal state like North Carolina, South Carolina and Florida that have seen a tremendous population surge in recent decades.

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At a minimum, Kamins said governments in vulnerable coastal areas should adopt efforts to move away from overbuilding in areas that are known to be susceptible to climate risk.

"Updating building codes and restoring natural defenses like floodplains whenever possible would also help," he said.

But human nature is hard to predict, and the dream of coastal living is still a strong draw for many people.

Brunswick County remains one of the fastest growing counties in the country, and coastal North Carolina's temperate climate, relatively low tax rate, and midpoint between New York and Florida continue to attract plenty of newcomers.

"The sand, the sun, the affordable cost of living, and people are nice," said Bill Johnson, who had just moved to Wilmington from Connecticut earlier this year, as he paused while walking his dog around The Loop at Wrightsville Beach. "What's there not to like?"

Reporter Gareth McGrath can be reached at GMcGrath@Gannett.com or @GarethMcGrathSN on Twitter. This story was produced with financial support from 1Earth Fund and the Prentice Foundation. The USA TODAY Network maintains full  editorial control of the work.