Academic journal article Contemporary Economic Policy

Welfare Loss of Wetlands Disintegration: A Louisiana Study

Academic journal article Contemporary Economic Policy

Welfare Loss of Wetlands Disintegration: A Louisiana Study

Article excerpt

I. INTRODUCTION

Estimated current Louisiana wetlands total between 2.9 (Alexander et al., 1986) and 3.1 million acres (Titus et al., 1991). They represent between 31 percent and 37 percent of U.S. coastal vegetated wetlands (Titus et al., 1991). Louisiana has lost roughly 30 percent of its coastal wetlands since the turn of the century, with loss rates averaging approximately 35 square miles per year (U.S. Department of Interior, 1994). Natural sources of these losses include subsidence, erosion, and sea level rise. More directly human sources include canal dredging and channelization, urban and industrial development, agricultural drainage, and below ground fluid withdrawal (Turner, 1990). Wetlands scientists estimate that 69 percent of Louisiana wetlands have disappeared directly due to canal construction and that an additional 20 percent may have disappeared due to indirect hydrologic and vegetative impacts of that construction (Scaife et al., 1983).

The Louisiana Geological Survey has established Louisiana wetlands scenarios to the year 2083 based on existing wetlands loss .rates. Loss rates, measured in meters per year, are not uniform across the coast or within inland areas. Using area specific loss rates, figure 1 shows predicted wetland disappearance by 2083 in the absence of any remediation programs. Inward recession of wetlands will result in a net loss since land gradients and soils of the Pleistocene terraces place a northward limit on lands feasible for conversion to coastal wetlands. Expectations are that in the absence of remediation, roughly 80 percent of Louisiana coastal wetlands will be lost by 2083.

Several programs are now in place to reverse wetlands disintegration. State and federal regulatory programs are underway to terminate further disintegration. These programs include stringent and costly permitting requirements for developments that may degrade coastal wetlands. Furthermore, projects initiated under the Coastal Wetland Planning, Protection, and Restoration Act of 1990 (CWPPRA) are designed to eliminate further losses and to reverse past losses through a wide range of techniques such as water and sediment diversion, revegetation, and canal closure. Expenditures of $3 billion in projects over the next 20 years are expected to hold Louisiana coastal wetlands areas at current levels (Van Heerden, 1994).

This study estimates the monetary value of welfare benefits from the entire suite of projects designed to stop further Louisiana coastal wetlands disintegration. The value of these projects, if successful, is the discounted value of benefits that would be lost under the projected loss scenario. The scientific community for some time has understood the multitude of socially valuable functions performed by coastal wetlands (Gosselink et al., 1974; Mitsch and Gosselink, 1993). Section II presents estimates of reasonably quantifiable wetlands loss values under the projected distintegration scenario. Section III summarizes the valuations.

II. EMPIRICAL VALUATION

One can divide the roles of ecosystem natural capital in economic production processes into two types, critical and substitute. In the case of wetlands, critical functions include habitat and nutrient sources, both of which are related to the energy fixing value of natural systems (Farber and Costanza, 1987). The loss of critical wetlands functions means that economic production processes dependent on those functions, such as commercial fishing or recreation, no longer will be possible or will require extremely costly substitutes. Substitute functions are economically useful activities that are more cheaply performed by wetlands than by human-engineered systems. These non-critical functions facilitate economic processes by providing substitutes for otherwise more costly inputs. In these cases, the value of the wetlands are the cost savings associated with their use rather than the alternatives. Examples include storm protection, water treatment, and aquifer recharge. …

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