Wetlands Prevent Hurricane Damage. Economists Now Know How Much

(Bloomberg) -- U.S. protection of wetlands has expanded and contracted dramatically over the last five years, as Democratic and Republican administrations rewrote Clean Water Act rules to their constituencies' liking. The lack of high-quality economic analysis has been a recurring theme in debates over how much protection wetlands deserve. Without a dollar figure that could stand up to scrutiny, politicians and regulators were skeptical of the benefits.

Two economists from University of California, San Diego set out to fix that. Their answer: On average, a square kilometer of wetlands is worth about $1.8 million a year in storm protection alone.

Wetlands are valuable in part because they protect people and property from hurricanes. This well-known quality is particularly difficult to hang a price tag on, because key factors change over time: the location and kind of wetlands, and the number and value of houses behind them. Researchers Fanglin Sun and Richard Carson assembled wetlands data published from 1996 and 2016 and matched them to the tracks of the 88 tropical storms and hurricanes that hit the U.S. during that period. Their estimate is based not on the property values of the area surrounding those wetlands, but rather by the cost of the damage caused by those storms.

The paper, published today in the Proceedings of the National Academy of Sciences, “really provides a defensible, economic estimate of the value of wetlands for this one purpose,” Carson says. “And clearly these values aren't anywhere close to zero. In fact, they're giant.”

The estimate per-square-kilometer varies dramatically between highly populated, infrastructure-heavy counties and rural ones, which explains why the median value—$91,000—is so much lower than the average. The wetlands protective value was even higher in areas with weak storm-related building codes.

Hurricane Irma caused $50 billion of damage in Florida when it hit the state as a Category 4 storm in September 2017. Using the results from their study of the prior 21 years, Sun and Carson were able to estimate how much damage would have been avoided if Florida hadn't lost 2.8% of its wetlands in that period: $430 million. “This is substantial for a single storm,” they write, and conclude from it that “wetland preservation is likely to be a comparatively effective way of protecting coastal communities against tropical cyclones.”

The study underscores the importance of wetlands to environmental protection on the Atlantic and Gulf Coasts. The Northeast in particular “is increasingly vulnerable to habitat loss and is increasingly exposed to shocks and stresses attributable, in some part, to climate change,” says Jesse Keenan, a climate risk and adaptation expert at Harvard.

“Hazard mitigation isn't just about building codes and material solutions.” he adds. “Rather, the most fundamental opportunity to adapt the built environment comes from innovations in preserving and changing land use.”

To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net

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