Evidence of Diminishing Marginal Product of Wetlands for Damage Mitigation

Abstract

Communities along the USA coast are highly vulnerable to coastal storms. Trends in population growth, climatic events and land use are likely to exacerbate future damages. Coastal management entities are faced with decisions about how to manage resources in a manner that improves environmental quality and provides the maximum benefit for coastal populations. This is particularly true along the USA coast of the Gulf of Mexico, where coastal storms are common, land loss is rapid and states are planning ambitious and costly coastal restoration projects. Many of these projects are intended to mitigate hurricane damages by using wetlands as storm buffers. The physical science literature shows that wetlands do provide situational protection from storm surge. However, little economic analysis has explored the effect of wetlands on economic losses. This analysis uses hurricane simulation data to estimate county- or parish-level damages based on observed damages from coastal storms making landfall along the Gulf coast. A model describing these damages as a function of wetland area, socio-economic conditions and storm intensity allows the estimation of the value of wetlands for their protective ecosystem services. This analysis finds that wetlands are valuable for storm damage mitigation and that wetland area change is most impactful where wetlands are most scarce. The implications of these finding are significant for coastal restoration decisions in a changing environment.