The third District Dialogues event of the 2022–2023 season explored how communities and industries across the Fifth District are preparing to navigate the impact of extreme weather on local economies, while also covering some familiar and some lesser-known ways that extreme weather is affecting the economy and local communities.

Richmond Fed senior economist Toan Phan kicked off the discussion with an overview of how economists have viewed the potential effects of extreme weather on the economy and financial system. The effects include industry-specific changes to labor productivity with higher temperatures and changes to asset prices in riskier areas.

Panelists for the event were Erica Anderson with Land of Sky Regional Council, an organization representing four counties in western North Carolina; Jeremy Hoffman with the Science Museum of Virginia; and Jessica Whitehead with Old Dominion University’s Institute for Coastal Adaptation and Resilience. They discussed what extreme weather has looked like in rural, coastal and urban areas and the effects on the local economies and industry.

Anderson provided examples from rural, mountainous regions of the Fifth District where there is limited land available for development, and much of it is prone to landslides and flooding. Weather-related issues in coastal regions also have resulted in escalated real estate prices and disruptions to the critical shipping and transportation systems in those areas, which serve as drivers for the Hampton Roads economy.

Echoing insights that Phan shared from the economics literature, the panelists also discussed how extreme weather issues are not felt equally by everyone. Members of historically marginalized communities who live in urban areas tend to experience more flooding and heat-related challenges, and in many cases, these align closely with patterns of historic redlining in communities.

The panelists also shed light on how communities are responding to weather-related disruptions to their economies. The strategies ranged from local to regional — from neighborhood efforts to plant trees and create green spaces, overhauling the storm water system for a city, to fostering regional collaboration around infrastructure needs and resiliency planning. Anderson’s organization, Land of Sky Regional Council, has produced a toolkit to help communities understand options available to them so they can invest based in their unique circumstances. Yet, she and others noted that investments can be costly and, as a result, impede preparation.

 Interested in the full content of this District Dialogues discussion? Access the full recording of the event on YouTube.