It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Tuesday, May 16, 2023
New study reveals widespread presence of environmental DNA in the sky, including allergens and pathogens
Recently published in PeerJ Life and Environment, researchers successfully use aircraft surveys with novel instrumentation to capture airborne nucleic acids and probe biodiversity in the atmosphere, uncovering surprising findings.
[Clemson, May 2023] - A groundbreaking research article titled "Aircraft Surveys for Air eDNA: Probing Biodiversity in the Sky" unveils a revolutionary approach to studying genetic material in the atmosphere. Scientists have developed a durable and sterilizable probe and supporting system to capture air environmental nucleic acids (eDNA) with full-flow filtration and a high-integrity chamber.
Using this innovative probe, the research team aerially mapped environmental DNA by employing a standardized and scalable flight pattern using light aircraft. The aim of the study was to collect bioaerosols, which are aerosolized biological matter, from a range of organisms at various altitudes above major emissions sources, and sequence them for identification.
This work began with an idea to explore, recounts Dr. Kimberly Metris, a faculty member at Clemson University and lead investigator. “I’m a molecular ecologist who works on diverse wild species, from bacteria to bluehead chub to African buffalo. I also fly airplanes, and one summer while I was flying skydivers I had a lot of time to think while climbing to jump run altitude. Meteorologically speaking, the conditions were great—10 statute miles visibility, rather calm winds, a rather nice day at the office—but this was during a Saharan dust storm and there was particulate matter visible outside, everywhere. An odd feeling, but it gets the wheels spinning.” What precisely is in the air that we can’t see, biologically speaking? This is what she and her coauthor set out to explore. “And now we are pushing the boundaries of what we thought we knew about the sky. The sky is not a limit, it is a treasure trove!”
The findings of the study are extraordinary. Through the use of their sampling probe and high throughput metagenomic sequencing, the researchers discovered the widespread presence of prokaryotic and eukaryotic eDNA in the atmosphere, reaching thousands of meters into the planetary boundary layer in the southeastern US. Notably, the study detected chicken, cow, and human eDNA at all altitudes flown, including an astonishing 8,500 feet above the ground.
The researchers identified various common plant-based allergens from grasses, weeds, and trees, as well as from species not typically reported in the air, such as garlic, revealing a diverse array of airborne genetic material.
They also discovered pathogenic bacteria and bacteria previously unknown to be present in the atmosphere but found in other extreme environments such as deep-sea sediment.
The sterilizable and reusable sampling probe employed in the study proved to be reliable, limiting sample loss and contamination while filtering genetic material directly from the air. This groundbreaking work enables the mapping of genetic material from potentially all species using aircraft or other flight or stationary methods and connects aerobiome profiles to ground level processes, providing valuable insight into the presence and diversity of genetic material found in the air we breathe.
The implications of this research are far-reaching, with applications in biodiversity, wildlife ecology, biodefense, and pathogen and allergen monitoring. The study's high-throughput amplicon sequencing of DNA from bacteria, vertebrates, and plants demonstrates that bioaerosols can originate from natural processes, such as wind-induced pollination in fields and forests, and human-mediated activities, namely production agriculture, wastewater treatment, and industry practices including hospital waste decontamination.
Airborne DNA profiles detected in the atmosphere reflect surface emissions, allergens, and potential ice and cloud condensation nuclei. The effectiveness of aerosolization is believed to influence the air DNA profiles detected at altitude, suggesting the incorporation of indices of lift and air mass characteristics for standardizing air eDNA surveys. Additionally, the researchers recommend standardized reporting of real-time, empirical flow rates, total air volumes, and sampler type(s) used, as they have crucially different operating airflow requirements.
Biological material in the form of eDNA/RNA can be lifted, carried, and deposited elsewhere by atmospheric mixing, lifting, and buoyancy, potentially leading to biological consequences such as gene flow and hybridization processes. The atmosphere is powerful and essential to life--The discovery of airborne vertebrate-derived eDNA floating thousands of meters from its origin at Earth’s surface suggests that the atmosphere contains biodiverse material, and has implications for biomonitoring and disease surveillance. Scientists can gain insight into the presence, abundance, and distribution of species in an area, providing valuable evidence for identifying individuals or tracing their movements, or monitoring production agriculture from the atmosphere.
This groundbreaking study paves the way for a deeper understanding of airborne genetic material and its implications for various fields of study. By unlocking the secrets of the sky, scientists are gaining new insights into our environment, the air we breathe, and intricate connections among biodiversity on Earth.
For more information or to access the full research article:
Métris KL, Métris J. Aircraft surveys for air eDNA: probing biodiversity in the sky. PeerJ. 2023 Apr 14;11:e15171. doi: 10.7717/peerj.15171. PMID: 37077310; PMCID: PMC10108859. https://peerj.com/articles/15171/
See the Video Abstract: https://youtu.be/9lNVLedumsA
Summer Flight Metris
Kimberly L. Metris & Husband/Co-Author Jérémy Métris
On the beach. In the ocean. Traveling along riverways. In muggy Florida and chilly Ireland. Even floating through the air.
We cough, spit, shed and flush our DNA into all of these places and countless more. Signs of human life can be found nearly everywhere, short of isolated islands and remote mountaintops, according to a new University of Florida study.
That ubiquity is both a scientific boon and an ethical dilemma, say the UF researchers who sequenced this widespread DNA. The DNA was of such high quality that the scientists could identify mutations associated with disease and determine the genetic ancestry of nearby populations. They could even match genetic information to individual participants who had volunteered to have their errant DNA recovered.
David Duffy, the UF professor of wildlife disease genomics who led the project, says that ethically handled environmental DNA samples could benefit fields from medicine and environmental science to archaeology and criminal forensics. For example, researchers could track cancer mutations from wastewater or spot undiscovered archaeological sites by checking for hidden human DNA. Or detectives could identify suspects from the DNA floating in the air of a crime scene.
But this level of personal information must be handled extremely carefully. Now, scientists and regulators must grapple with the ethical dilemmas inherent in accidentally — or intentionally — sweeping up human genetic information, not from blood samples but from a scoop of sand, a vial of water or a person’s breath.
“We’ve been consistently surprised throughout this project at how much human DNA we find and the quality of that DNA,” Duffy said. “In most cases the quality is almost equivalent to if you took a sample from a person.”
Because of the ability to potentially identify individuals, the researchers say that ethical guardrails are necessary for this kind of research. The study was conducted with approval from the institutional review board of UF, which ensures that ethical guidelines are adhered to during research studies.
“It’s standard in science to make these sequences publicly available. But that also means if you don’t screen out human information, anyone can come along and harvest this information,” Duffy said. “That raises issues around consent. Do you need to get consent to take those samples? Or institute some controls to remove human information?”
Duffy’s team at UF’s Whitney Laboratory for Marine Bioscience and Sea Turtle Hospital has successfully used environmental DNA, or eDNA, to study endangered sea turtles and the viral cancers they are susceptible to. They’ve plucked useful DNA out of turtle tracks in the sand, greatly accelerating their research program.
The scientists knew that human eDNA would end up in their turtle samples and probably many other places they looked. With modern genetic sequencing technology, it’s now straightforward to sequence the DNA of every organism in an environmental sample. The questions were how much human DNA there would be and whether it was intact enough to harbor useful information.
The team found quality human DNA in the ocean and rivers surrounding the Whitney Lab, both near town and far from human settlement, as well as in sand from isolated beaches. In a test facilitated by the National Park Service, the researchers traveled to part of a remote island never visited by people. It was free of human DNA, as expected. But they were able to retrieve DNA from voluntary participants’ footprints in the sand and could sequence parts of their genomes, with permission from the anonymous participants.
Duffy also tested the technique in his native Ireland. Tracing along a river that winds through town on its way to the ocean, Duffy found human DNA everywhere but the remote mountain stream where the river starts, far from civilization.
The scientists also collected room air samples from a veterinary hospital. They recovered DNA matching the staff, the animal patient and common animal viruses.
Now that it’s clear human eDNA can be readily sampled, Duffy says it’s time for policymakers and scientific communities to take issues around consent and privacy seriously and balance them against the possible benefits of studying this errant DNA.
“Any time we make a technological advance, there are beneficial things that the technology can be used for and concerning things that the technology can be used for. It’s no different here,” Duffy said. “These are issues we are trying to raise early so policy makers and society have time to develop regulations.”
ITHACA, N.Y. – A Cornell University-led experiment in which two people play a modified version of Tetris revealed that players who get fewer turns perceived the other player as less likable, regardless of whether a person or an algorithm allocated the turns.
Most studies on algorithmic fairness focus on the algorithm or the decision itself, but researchers sought to explore the relationships among the people affected by the decisions.
“We are starting to see a lot of situations in which AI makes decisions on how resources should be distributed among people,” said Malte Jung, associate professor of information science, whose group conducted the study. “We want to understand how that influences the way people perceive one another and behave towards each other. We see more and more evidence that machines mess with the way we interact with each other.”
In an earlier study, a robot chose which person to give a block to and studied the reactions of each individual to the machine’s allocation decisions.
“We noticed that every time the robot seemed to prefer one person, the other one got upset,” said Jung. “We wanted to study this further, because we thought that, as machines making decisions becomes more a part of the world – whether it be a robot or an algorithm – how does that make a person feel?”
Using open-source software, Houston Claure – the study’s first author and postdoctoral researcher at Yale University – developed a two-player version of Tetris, in which players manipulate falling geometric blocks in order to stack them without leaving gaps before the blocks pile to the top of the screen. Claure’s version, Co-Tetris, allows two people (one at a time) to work together to complete each round.
An “allocator” – either human or AI, which was conveyed to the players – determines which player takes each turn. Jung and Claure devised their experiment so that players would have either 90% of the turns (the “more” condition), 10% (“less”) or 50% (“equal”).
The researchers found, predictably, that those who received fewer turns were acutely aware that their partner got significantly more. But they were surprised to find that feelings about it were largely the same regardless of whether a human or an AI was doing the allocating.
The effect of these decisions is what the researchers have termed “machine allocation behavior” – similar to the established phenomenon of “resource allocation behavior,” the observable behavior people exhibit based on allocation decisions. Jung said machine allocation behavior is “the concept that there is this unique behavior that results from a machine making a decision about how something gets allocated.”
The researchers also found that fairness didn’t automatically lead to better game play and performance. In fact, equal allocation of turns led, on average, to a worse score than unequal allocation.
“If a strong player receives most of the blocks,” Claure said, “the team is going to do better. And if one person gets 90%, eventually they’ll get better at it than if two average players split the blocks.”
UPTON, NY—Hydrogen, the simplest element on Earth, is a clean fuel that could revolutionize the energy industry. Accessing hydrogen, however, is not a simple or clean process at all. Pure hydrogen is extremely rare in nature, and practical methods to produce it currently rely on fossil fuels. But if scientists find the right chemical catalyst, one that can split the hydrogen and oxygen in water molecules apart, pure hydrogen could be produced from renewable energy sources such as solar power.
Now, scientists are one step closer to finding that catalyst. Chemists at the University of Kansas and the U.S. Department of Energy’s (DOE) Brookhaven National Laboratory have unraveled the entire reaction mechanism for a key class of water-splitting catalysts. Their work was published today in Proceedings of the National Academy of Sciences (PNAS).
“It’s very rare that you can get a complete understanding of a full catalytic cycle,” said Brookhaven chemist Dmitry Polyansky, a co-author of the paper. “These reactions go through many steps, some of which are very fast and cannot be easily observed.”
Rapid intermediate steps make it difficult for scientists to decipher exactly where, when, and how the most important parts of a catalytic reaction occur—and therefore, if the catalyst is suitable for large-scale applications.
At the University of Kansas, associate professor James Blakemore was researching possible candidates when he noticed something unusual about one catalyst in particular. This catalyst, called a pentamethylcyclopentadienyl rhodium complex, or Cp*Rh complex, was demonstrating reactivity in an area where molecules are usually stable.
“Metal complexes—molecules that contain a metal center surrounded by an organic scaffold—are important for their ability to catalyze otherwise difficult reactions,” said Blakemore, who is also a co-author of the paper. “Typically, reactivity happens directly at the metal center, but in our system of interest, the ligand scaffold appeared to directly take part in the chemistry.”
So, what exactly was reacting with the ligand? Was the team really observing an active step in the reaction mechanism or just an undesirable side reaction? How stable were the intermediate products that were produced? To answer questions like these, Blakemore collaborated with chemists at Brookhaven Lab to use a specialized research technique called pulse radiolysis.
Pulse radiolysis harnesses the power of particle accelerators to isolate rapid, hard-to-observe steps within a catalytic cycle. Brookhaven’s Accelerator Center for Energy Research (ACER) is one of only two locations in the United States where this technique can be conducted, thanks to the Lab’s advanced particle accelerator complex.
“We accelerate electrons, which carry significant energy, to very high velocities,” said Brookhaven chemist David Grills, another co-author of the paper. “When these electrons pass through the chemical solution we’re studying, they ionize the solvent molecules, generating charged species that are intercepted by the catalyst molecules, which rapidly alter in structure. We then use time-resolved spectroscopy tools to monitor the chemical reactivity after this rapid change occurs.”
Spectroscopic studies provide spectral data, which can be thought of as the fingerprints of a molecule’s structure. By comparing these signatures to known structures, scientists can decipher physical and electronic changes within the short-lived intermediate products of catalytic reactions.
“Pulse radiolysis allows us to single out one step and look at it on a very short timescale,” Polyansky said. “The instrumentation we used can resolve events at one millionth to one billionth of a second.”
By combining pulse radiolysis and time-resolved spectroscopy with more common electrochemistry and stopped-flow techniques, the team was able to decipher every step of the complex catalytic cycle, including the details of the unusual reactivity occurring at the ligand scaffold.
“One of the most remarkable features of this catalytic cycle was direct involvement of the ligands,” Grills said. “Often, this area of the molecule is just a spectator, but we observed reactivity within the ligands that had not yet been proven for this class of compounds. We were able to show that a hydride group, an intermediate product of the reaction, jumped onto the Cp* ligand. This proved that the Cp* ligand was an active part of the reaction mechanism.”
Capturing these precise chemical details will make it significantly easier for scientists to design more efficient, stable, and cost-effective catalysts for producing pure hydrogen.
The researchers also hope their findings will provide clues for deciphering reaction mechanisms for other classes of catalysts.
“In chemistry, findings like ours can often be generalized and applied to optimize other systems, but obtaining critical details on rapid reactivity, like we have done here, is a key step,” Blakemore said. “We hope other research groups will take our insights and build on them, perhaps by using ligand-promoted reactivity to build better catalysts.”
This study is just one set of experiments among a large body of clean energy work that scientists at the University of Kansas and Brookhaven Lab are conducting.
“We’re building the fundamental chemical knowledge that will, one day, help scientists design the optimal catalyst for producing pure hydrogen,” Polyansky said.
This work was supported by the National Science Foundation and the DOE Office of Science.
Brookhaven National Laboratory is supported by the Office of Science of the U.S. Department of Energy. The Office of Science is the single largest supporter of basic research in the physical sciences in the United States and is working to address some of the most pressing challenges of our time. For more information, visit science.energy.gov.
New synthetic metabolic pathways for fixation of carbon dioxide could not only help to reduce the carbon dioxide content of the atmosphere, but also replace conventional chemical manufacturing processes for pharmaceuticals and active ingredients with carbon-neutral, biological processes. A new study demonstrates a process that can turn carbon dioxide into a valuable material for the biochemical industry via formic acid.
In view of rising greenhouse gas emissions, carbon capture, the sequestration of carbon dioxide from large emission sources, is an urgent issue. In nature, carbon dioxide assimilation has been taking place for millions of years, but its capacity is far from sufficient to compensate man-made emissions.
Researchers led by Tobias Erb at the Max Planck Institute for Terrestrial Microbiology are using nature's toolbox to develop new ways of carbon dioxide fixation. They have now succeeded in developing an artificial metabolic pathway that produces the highly reactive formaldehyde from formic acid, a possible intermediate product of artificial photosynthesis. Formaldehyde could be fed directly into several metabolic pathways to form other valuable substances without any toxic effects. As in the natural process, two primary components are required: Energy and carbon. The former can be provided not only by direct sunlight but also by electricity - for example from solar modules.
Formic acid is a C1 building block
Within the added-value chain, the carbon source is variable. carbon dioxide is not the only option here, all monocarbons (C1 building blocks) come into question: carbon monoxide, formic acid, formaldehyde, methanol and methane. However, almost all of these substances are highly toxic - either to living organisms (carbon monoxide, formaldehyde, methanol) or to the planet (methane as a greenhouse gas). Only formic acid, when neutralised to its base formate, is tolerated by many microorganisms in high concentrations.
"Formic acid is a very promising carbon source," emphasizes Maren Nattermann, first author of the study. "But converting it to formaldehyde in the test tube is quite energy-intensive." This is because the salt of formic acid, formate, cannot be converted easily into formaldehyde. "There's a serious chemical barrier between the two molecules that we have to bridge with biochemical energy - ATP - before we can perform the actual reaction."
The researcher's goal was to find a more economical way. After all, the less energy it takes to feed carbon into metabolism, the more energy remains to drive growth or production. But such a path does not exist in nature. "It takes some creativity to discover so-called promiscuous enzymes with multiple functions," says Tobias Erb. "However, the discovery of candidate enzymes is only the beginning. We're talking about reactions that you can count along with since they're so slow - in some cases, less than one reaction per second per enzyme. Natural reactions can happen a thousand times faster." This is where synthetic biochemistry comes in, says Maren Nattermann: "If you know an enzyme’s structure and mechanism, you know where to intervene. Here, we benefit significantly from the preliminary work of our colleagues in basic research."
High-throughput technology speeds up enzyme optimization
The optimization of the enzymes comprised of several approaches: building blocks were specifically exchanged, and random mutations were generated and selected for capability. "Formate and formaldehyde are both wonderfully suited because they penetrate cell walls. We can put formate into the culture medium of cells that produce our enzymes, and after a few hours convert the formaldehyde produced into a non-toxic yellow dye," explains Maren Nattermann.
The result would not have been possible in such a short time without the use of high-throughput methods. To achieve this, the researchers cooperated with their industrial partner Festo, based in Esslingen, Germany. "After about 4000 variants, we achieved a fourfold improvement in production," says Maren Nattermann. "We have thus created the basis for the model mikrobe Escherichia coli, the microbial workhorse of biotechnology, to grow on formic acid. For now, however, our cells can only produce formaldehyde, not convert it further."
With collaboration partner Sebastian Wenk at the Max Planck Institute of Molecular Plant Physiology, the researchers are currently developing a strain that can take up the intermediates and introduce them into the central metabolism. In parallel, the team is conducting research with a working group at the Max Planck Institute for Chemical Energy Conversion headed by Walter Leitner on the electrochemical conversion of carbon dioxide to formic acid. The long-term goal is an "all-in-one platform" - from carbon dioxide via an electrobiochemical process to products like insulin or biodiesel.
Carbon dioxide (CO2) is a major greenhouse gas emitted through various types of human activities. In an effort to decrease humanity’s carbon footprint, scientists and policymakers across the globe are continuously trying to explore new methods for reducing atmospheric CO2 emissions and converting them into useful forms. In this regard, the electrochemical method of reducing CO2 to other carbonaceous forms like carbon monoxide, alcohols and hydrocarbon has gained considerable attention.
Against this backdrop, environmental researchers from Doshisha University, Japan led by Prof. Takuya Goto recently published a study in Electrochimica Acta on 10 July 2023 that demonstrated one such method for converting CO2 into multi-walled carbon nanotubes (MWCNT) using molten salts through sustainable electrochemistry. Their study was made available online on 22 April 2023, and included contributions from Dr. Yuta Suzuki from the Harris Science Research Institute and Mr. Tsubasa Takeda from the Department of Science of Environment and Mathematical Modeling.
Using a sustainable electrochemical technique, the research team facilitated the conversion of CO2 into MWCNT using LiCl-KCl melt. The molten salts were saturated with CO2 gas and semi-immersed nickel (Ni) substrate was used as electrode. The supplied CO2 was electrochemically converted to solid carbon at the end of the procedure. This green conversion occurred via a reduction reaction at the Ni electrode/LiCl-KCl melt/CO2 interface.
“The electrochemical reduction of CO2 on a Ni electrode in LiCl-KCl melt at 723 K was studied. Under high polarization, a super meniscus was formed at the three-phase interface of the Ni electrode/LiCl-KCl melt/CO2 gas, where the direct electrochemical reduction of CO2 to solid carbon progressed. Solid carbon was obtained in the wetted area of the Ni electrode as well as in the bulk molten salt via the electrochemical technique,” remarks Prof. Goto.
Subsequent characterization of the electrode-deposited carbon using electron microscopy techniques and elemental analysis revealed that the obtained carbonaceous material consisted of MWCNTs, commercially viable nanostructures, that were 30 – 50 nm in diameter. The team then varied the applied voltage and extended the reaction time, recording noticeable changes in the MWCNTs. The height of the generated MWCNTs increased after the electrolysis time was increased from 10 min to 180 min. “We studied the dependence of applied potential and electrolytic time on the morphology and crystallinity of the electrodeposited carbon. Based on our experimental results, we proposed a model for the formation of the MWCNTs on the Ni electrode,” highlights Prof. Goto.
The proposed model for the generation of MWCNTs from CO2 is described in three stages. The first stage involves the reduction of CO2 to carbon atoms at the Ni/LiCl-KCl melt/CO2 interface. During the second stage, the electrodeposited carbon atoms form Ni-C compounds (like NiC) on the surface of Ni electrode. Finally, when solubility limit of carbon in Ni-C compounds is reached, the cylindrical-shaped MWCNTs grow from the edge of the Ni-C compounds generated during the second stage.
In summary, the study identifies a novel process for sustainably converting CO2 into commercially useful carbonaceous materials. Moreover, the employed electrochemical process is environment friendly owing to the non-usage of fossil fuel. In addition, the use of high-temperature molten salts is unique because it enables the direct conversion of CO2 gas into MWCNTs.
“Our results indicate that CO2 can be converted into carbonaceous functional materials. By combining non-consumable oxygen-evolving anodes, this technique can contribute to the development of a carbon recycling technology that will not only solve global environmental problems but also play an important in carbon pricing economies. The material production process, which does not use fossil fuels, will help realize a sustainable society in the near future,” concludes an optimistic Prof. Goto.
We certainly hope his visions will be realized soon!
About Professor Takuya Goto from Doshisha University, Japan Prof. Takuya Goto serves as a Professor at the Department of Science of Environment and Mathematical Modeling, Graduate School of Science and Engineering at Doshisha University, Japan. He obtained his Ph.D. in energy science from Kyoto University, Japan. Prof. Goto has over 80 publications to his credit. His laboratory primarily conducts research in the area of energy science, nuclear engineering, inorganic chemistry, and electrochemistry.
Media contact: Organization for Research Initiatives & Development Doshisha University Kyotanabe, Kyoto 610-0394, JAPAN E-mail:jt-ura@mail.doshisha.ac.jp
The NVCL is a portal for those who have a stake in the climate crisis, such as researchers, students, faculty, and other interested organizations. Portal users will be able to find a wide range of national laboratory experts, programs, projects, activities, and user facilities that are engaged in climate research across the BER portfolio. The portal enables more efficient engagement with DOE’s climate science and technology, including building a next-generation climate workforce by facilitating equitable and inclusive training and career opportunities for students and practitioners.
The NVCL has three major objectives:
Centralize access to DOE climate research via a curated, accessible, continuously updated database of resources.
Facilitate climate training opportunities for students, faculty, and early career scientists.
Encourage collaborations between national laboratories and interested organizations, including Minority-Serving Institutions (MSIs) and Historically Black Colleges and Universities (HBCUs).
“Climate science impacts everyone, and we need everyone’s voice to make a difference,” said Asmeret Asefaw Berhe, DOE’s Office of Science Director. “The NVCL brings our climate information together in one accessible place, unifying communities, scientists, and students in developing solutions.”
“With the launch of the NVCL portal, we will have the ability to get DOE climate science into the hands of underrepresented researchers and students in the climate field,” said Cristina Negri, NVCL project lead and Director of the Environmental Science Division at DOE’s Argonne National Laboratory.
National labs with climate research included in the NVCL include Argonne National Laboratory, Brookhaven National Laboratory, Lawrence Berkeley National Laboratory, Lawrence Livermore National Laboratory, Los Alamos National Laboratory, National Renewable Energy Laboratory, Oak Ridge National Laboratory, Pacific Northwest National Laboratory, and Sandia National Laboratories. The NVCL also includes BER-supported DOE Office of Science User Facilities, including the Atmospheric Radiation Measurement facility and the Environmental Molecular Sciences Laboratory.
Visit nvcl.energy.gov to access DOE-BER climate science information.
Commercial investors shift perspective of coastal properties in face of climate change
UNIVERSITY PARK, Pa. — Investors in commercial real estate are rethinking the values of coastal properties exposed to flood risk — even in northern U.S. locales that haven’t suffered flood damage, according to researchers. This shift in perspective has implications for investors and developers alike as they determine the value of coastal properties amid a changing climate.
Eva Steiner, associate professor of real estate and King Family Early Career Professor in Real Estate in the Penn State Smeal College of Business, and her co-authors published these findings recently in Real Estate Economics.
Steiner and her colleagues, motivated by the observation that commercial real estate investors and developers are increasingly worried about environmental risk exposures of assets tied to particular locations, set out to study how professional investors capitalized flood risk in commercial real estate markets after 2012’s Hurricane Sandy. They looked at transaction prices of properties with varying degrees of flood risk exposure both before and after this major flood event.
The researchers found, not surprisingly, that New York commercial real estate properties in areas that sustained hurricane damage continued to trade at lower values in the years following Hurricane Sandy.
“Of course there’s going to be a negative effect,” Steiner said. “A lot of buildings were damaged, and in many cases tenants couldn’t occupy the buildings for a while so owners lost rental income. But the more interesting question that we were after is this: If you put those immediate damages aside, did this event trigger a shift in how investors think about risks associated with coastal properties?”
That question led them to look at commercial real estate transactions after Hurricane Sandy in Boston as well as New York. Although Boston didn’t sustain damage from Sandy, it is a location along the Eastern Seaboard that’s considered at risk of flooding in the future. The researchers found a similar pattern of commercial properties in Boston trading at lower values — an effect that can’t be attributed to actual damaged property and is likely because of changes in investors’ perceptions of flood risks, they said.
To strengthen this conclusion, Steiner and her colleagues conducted a placebo test, looking at commercial properties along Lake Michigan in Chicago.
“We wanted to make sure there wasn’t something else about waterfront property that changed how investors feel about these properties,” Steiner said. “Here, there is zero hurricane risk because it’s an inland body of water. We found no pricing effects in this area, so based on the knowledge we have, the effects we see in New York and Boston are likely due to professional investors responding to a persistent shift in perceptions of flood risk post-Sandy, even in locations spared by the disaster.”
To conduct their study, the researchers used data that spanned about 10 years before Hurricane Sandy and five years after.
“Ideally, we would look at two properties, one coastal and one farther inland, that each traded before and after Sandy,” Steiner said. “And we would want to see the price of the exposed property go down after Sandy relative to the price of the non-exposed property.”
But because commercial real estate doesn’t trade very frequently, they matched properties that were similar based on observable characteristics.
Steiner and her co-authors chose to focus on commercial real estate because it provides a clearer, more objective picture than residential real estate.
“When you buy a home, it’s not just an investment,” she said. There is a consumption value — you are going to live in that home, and that may include an element of sentiment as well. And those factors may make you evaluate property risks a little differently from an investor who is just looking at this as a financial proposition, an economic calculation.”
The research results can help inform decisions of both developers and investors as flood risks for coastal properties continue to increase, according to the research team. Developers’ decisions about where to create new real estate assets will be affected by investors who are unwilling to pay top prices for properties that are at risk of flooding. Investors who currently hold properties that may be subject to flood risk can get a better assessment of the potential risks to the values of the assets they have in their portfolios.
“What do we do with those assets that we now know are exposed to these flood risks?” Steiner asked. “There may come a point when these assets will no longer hold much economic value, and these properties may be abandoned, or they may need significant retrofitting to make them more resilient.”
This research was supported by funds from Steiner’s King Family Early Career Chair at the Smeal College of Business.
Co-authors of the research paper are Jawad M. Addoum, associate professor of finance at Cornell SC Johnson College of Business; Piet Eichholtz, professor of real estate finance at Maastricht School of Business and Economics in Maastricht, The Netherlands; and Erkan Yönder, associate professor of finance at John Molson School of Business, Concordia University in Montreal, Canada.