Flooding Reveals Economic Woes from Levee System

Article excerpt

To the poor souls watching the not-so-lazy old river churning through their barns and living rooms, the question of the hour is why Washington did not do more to protect them from disaster. But to many economists and environmentalists the question is whether the government should have done less.

With hindsight, they say, it is plain that the system of levees and dams meant to harness the Mississippi has done great harm as well as good, reducing the river valley's natural defenses against flood damage even as it encouraged development that put more property in harm's way. "We've been burning the candle at both ends for half a century," concluded Robert Stavins, an environmental economist at Harvard University's Kennedy School.

The challenge now, says Leonard Shabman, an economist at Virginia Polytechnic Institute, is to avoid the errors of the past and to protect what is truly worth protecting without throwing good money after bad.

It has long been understood that the Mississippi River's plumbing is a mixed blessing. The deep channels that improve navigation also speed the flow of flood water. Similarly, the levees that prevent local damage raise the river crest downstream.

"When we turned the Mississippi into a canal, we redistributed the burden of flooding," noted Jon Goldstein, an economist for the Department of the Interior.

The Army Corps of Engineers implicitly acknowledged the problem by constructing dams on the Mississippi's tributaries, substituting artificial storage for the valley's natural capacity to capture rain. But one thing the master builders did not understand, Stavins says, is that the secondary economic effects of pushing around all that mud would damage the environment as well as magnifying the inherent risks of flood.

Much land in the Mississippi Valley was once wetlands, woods and marsh that were inundated at least every few years. A good chunk of the wetlands was sure to have been drained and cultivated, once roads and railways made it accessible to world grain markets.

By reducing the chances of local flooding, however, Washington created economic incentives to reclaim a far larger area. Stavins and Adam Jaffe, a colleague at Harvard, estimate that at least a third of the five million acres converted from wetlands in the lower Mississippi Valley since the 1930s was induced by federal flood control projects.

One result was that the valley lost much of its capacity as a natural sponge, absorbing less water in periods of heavy rain. …