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Coastal disasters are increasing in frequency and magnitude—measured in terms of human lives lost, destroyed infrastructure, ecological damage and disrupted social networks. Hurricane Katrina and the Indian Ocean tsunami illustrate the severe and widespread impacts of such disasters on human well-being. The proximate cause of most of these disasters is “forces of nature”. However, human decisions, driven largely by economic forces, do much to aggravate these natural disasters—for example, coastal mangroves and wetlands protect coastal communities from wave surges and winds, but are rapidly being converted for the production of market goods, and anthropogenic climate change driven by the energy use of our economy may exacerbate coastal disasters in several ways. The goal of economics should be to improve the sustainable well-being of humans. Our well-being is generated in part by the …