Uncertainty in Household Behavior Drives Large Variation in the Size of the Levee Effect

Coastal cities face increasing flood hazards due to climate change. Physical infrastructure, such as levees, are commonly used to reduce flood hazards. To effectively manage flood risks, it is important to understand the degree to which physical infrastructure changes both hazard and exposure. For example, many studies suggest that levee construction causes an overall increase in risk because levees promote exposure growth to a greater degree than they reduce flood hazards. Although this so-called “levee effect” is widely studied, there are knowledge gaps surrounding how uncertainties related to levee construction and flood risk translate into the occurrence and strength of the levee effect in coastal communities. Here, we use agent-based modeling to simulate the dynamics surrounding the levee effect, first under idealized conditions and finally within a real-world coastal environment. We find that the size of the levee effect is highly sensitive to household behavior (e.g., risk aversion), economic factors (e.g., population growth), and engineering (e.g., levee failure). We also observe circumstances where the levee effect does not occur at all under certain model parameterizations. Overall, our findings emphasize the importance of providing reliable flood risk information to promote sustainable development in coastal communities.