NBER WORKING PAPER SERIESHOW CAN POLICY ENCOURAGE ECONOMICALLY SENSIBLE CLIMATE ADAPTATION?V. Kerry SmithWorking Paper 16100http://www.nber.org/papers/w16100NATIONAL BUREAU OF ECONOMIC RESEARCH1050 Massachusetts AvenueCambridge, MA 02138June 2010Thanks are due to Allen Klaiber, Nicolai Kuminoff, and Sheila Olmstead for suggestions on this researchand to both Don Fullerton and Erin Mansur for very constructive commentson an earlier draft.In addition,Erin helped me to remove some mistakes in that earlier draft. Any remaining errors are mine. Thanksare also due to Natalie Cardita and Jon Valentine for preparing several versions of this paper. Theviews expressed herein are those of the author and do not necessarily reflect the views of the NationalBureau of Economic Research.NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies officialNBER publications.© 2010 by V. Kerry Smith. All rights reserved. Short sections of text, not to exceed two paragraphs,may be quoted without explicit permission provided that full credit, including © notice, is given tothe source.