Archive for Economics
What is Our Coast Worth (In Dollars)?
January 24, 2013 | Posted by Delta Dispatches in 2012 Coastal Master Plan, Economics, Science and Engineering Special Team (SEST), SeafoodThis story was originally posted on the Coalition the Restore Coastal Louisiana's Coastal Currents blog.
By Scott Madere, Coalition to Restore Coastal Louisiana
Our coastal wetlands have immeasurable worth to Louisiana in terms of culture. Our history, art, celebrations, recreational opportunities and so much more are tied to the muddy waters and vast green expanse of our swamps, forests and coastal marsh. Our love for our land defines us as a people, and we often cite it to those who are not from here as the main reason why Louisiana’s coast is worth saving. It seems natural for us to talk about the coast this way, but to those outside of Louisiana it may be a little hard to understand. That’s why it’s also valuable to be able to talk about Louisiana’s worth in another way: raw dollars, the sheer economic value that the Mississippi River Delta provides to the nation.
Understanding the massive dollar value of what Louisiana provides to the country helps us make the case to our fellow Americans that Louisiana is worth the resources sent here to restore our wetlands. In a political environment where budgets are tight and decisions are made based on investment return, this could potentially be Louisiana’s best angle toward building more national support for restoration.
So let’s explore it. The Mississippi River Delta Science and Engineering Special Team (SEST), made up of 22 of our nation’s best coastal scientists and engineers, published a report in 2012: “Answering 10 Fundamental Questions About the Mississippi River Delta.” Within the report, SEST compiled some convincing data about the economic value of Louisiana’s coast from a number of sources. Here are some of the highlights:
Mississippi River Delta ecosystems provide economically valuable services to the people of our state such as storm protection, fresh water, food, habitat, waste treatment and other benefits. These annual benefits alone are worth up to $47 billion per year to our citizens. With these annual benefits taken into consideration, the present value of the Delta’s ecosystem services could range as high as $1.3 trillion.- Between 80 and 90 percent of Louisiana’s economy, seafood production and quality of life is linked to coastal ecosystem goods and services.
- Commercial fisheries have a yearly impact of $2.85 billion.
- Recreational fishing generates $1.7 billion annually.
- Economic activity linked to wildlife (hunting, wildlife watching, trapping, etc.) exceeds $1.6 billion each year.
- Tourism generates as much as $10 billion every year for Louisiana.
- The deepwater ports along the Mississippi River from Baton Rouge to New Orleans collectively form the largest tonnage port in the Western Hemisphere. Waterborne commerce in this corridor generates $35 billion annually and as many as 300,000 jobs.
And we haven’t even mentioned oil and gas yet.
According to the Louisiana Oil & Gas Association:
Our state is the nation’s number one producer of crude oil and the number two producer of natural gas among the 50 states.- Approximately 80 percent of the nation’s offshore oil and gas resources come from or through Louisiana. That equates to 30 percent of the nation’s energy consumption.
- The Louisiana oil and gas industry exceeds $70 billion of economic impact annually.
After reviewing this very short list of economic benefit provided to us by the coast, it is easy to see two undeniable facts.
First, Louisiana’s coast is an economic engine that needs to be protected. In a time when so much national focus is set on employment numbers, Louisiana contributes positively by providing hundreds of thousands of jobs related to the coast. Even more jobs can be provided by the coastal restoration process itself.
Secondly, placing a national priority on Louisiana coastal restoration is a wise move. The 2012 Louisiana Coastal Master Plan sets a cost of $50 billion to fund its 50-year coordinated coastal restoration strategy. When compared to the potential economic output of Louisiana for the next 50 years, that $50 billion price tag actually seems small.
In the years ahead, Louisiana’s citizens will have to continue to make the case, both on Capitol Hill and in Baton Rouge, that coastal restoration is a top national priority. The numbers do add up when it comes to supporting that claim, and our leaders and citizens should feel confident in taking that position when seeking support from others around the country.
No CommentsBP Oil Spill: 1,000 Days Later
January 14, 2013 | Posted by Chandler Clay in Birds, BP Oil Disaster, Clean Water Act, Congress, Economics, Federal Policy, Gulf Coast Ecosystem Restoration Task Force, Hurricane Isaac, Latest News, Restoration Projects, SeafoodIt's been exactly 1,000 days since the BP-operated oil rig in the Gulf of Mexico exploded, gushing millions of barrels of crude oil into a body of water that supports countless ecosystems and economies.
Below is a timeline of major events that have occurred in the last 1,000 days.
Sources:
- Restorethegulf.org, "First oiled bird is recovered."
- Restorethegulf.org, "NOAA Expands Fishing Closed Area in Gulf of Mexico."
- The New York Times, "Effects of Spill Spread as Tar Balls Are Found."
- TIME, "100 Days of the BP Spill: A Timeline."
- The White House, "Executive Order 13554–Gulf Coast Ecosystem Restoration Task Force."
- Bloomberg, "BP Oil Still Ashore One Year After End of Gulf Spill."
- PNAS, "Impact of the Deepwater Horizon oil spill on a deep-water coral community in the Gulf of Mexico."
- University of Maryland Center for Environmental Science, "Study confirms oil from Deepwater Horizon disaster entered food chain in the Gulf of Mexico."
- The Times-Picayune, "About 565,000 pounds of oiled material from Deepwater Horizon stirred up by Hurricane Isaac."
- The New York Times, "BP Will Plead Guilty and Pay Over $4 Billion."
- Georgia Tech Biology, "Gulf of Mexico Clean-Up Makes 2010 Spill 52-Times More Toxic."
- University of Miami Rosenstiel School of Marine & Atmospheric Science, "UMiami scientists partner with NOAA, Stanford and U of N Texas to study post spill fish toxicology."
- NOAA Fisheries Service, "2010-2013 Cetacean Unusual Mortality Event in Northern Gulf of Mexico."
- The Times-Picayune, "Transocean to pay $1.4 billion to settle pollution, safety violations in Gulf oil spill."
New market opportunities for carbon sequestration in wetlands
January 3, 2013 | Posted by Delta Dispatches in Economics, Restoration Projects, ScienceBy Shannon Hood, Environmental Defense Fund
Terrestrial carbon sequestration is the process by which atmospheric carbon dioxide is taken up by plants through photosynthesis and stored as carbon in biomass and soil. During the process of photosynthesis, plants take carbon dioxide from the atmosphere, coupled with sunlight and water, and turn it into sugar and oxygen, allowing them to act as long-term storage facilities for carbon (“carbon sinks”). Some carbon is re-emitted during the process of respiration, but overall, vegetated areas act as net carbon storage facilities. Utilizing vegetated areas as sinks for carbon allows carbon emissions from other sources (fossil fuel emissions, deforestation, etc.) to be offset. The value of forested lands has been documented for carbon sequestration (e.g., “REDD-Avoiding Planned Deforestation” and “Afforestation and Reforestation of Degraded Lands”), however, until now, the ability of wetlands to capture and store blue carbon hasn’t been formally recognized or quantifiable.
Carbon sequestration cycle (source: NOAA).
Tierra Resources LLC, an environmental consulting firm based in New Orleans, has developed the first American Carbon Registry-certified methodology for creating carbon offset credits for wetland restoration activities. (In a follow-up post, we will provide information on the methodology and test site). The methodology provides a calculation for determining the number of carbon credits that may be obtained from a wide variety of wetland restoration projects. Never before had wetlands entered the arena for carbon credits, but the potential for credits to be obtained from their restoration is tremendous!
Carbon storage capacity for various ecosystems.
Biologically, wetlands are some of the most highly productive ecosystems in the world, with high rates of photosynthesis. Higher rates of photosynthesis lead to greater carbon capture and storage by trees, grasses and other plants. In addition, wetlands soils are largely anaerobic, meaning that incorporated carbon decomposes slowly and can be stored for long periods of time.
Tierra Resources estimates that if 25 percent of the four million acres of Mississippi River Delta wetlands that are eligible under this methodology are selected for restoration through carbon sequestration, between $5 and $15 billion may be generated over the next 40 years. This creates an additional source of funding for wetlands restoration and adds yet another ecosystem service to the many already provided by the Mississippi River Delta.
No CommentsHow much is a Louisiana oyster worth?
August 1, 2012 | Posted by Delta Dispatches in Economics, Job Creation, Restoration Projects, Science, SeafoodBy Meg Sutton, Environmental Defense Fund
Oyster reefs in coastal estuaries around the globe have been degraded for the past 100-200 years due to a combination of overfishing, harmful dredging practices, decreasing water quality, sedimentation and oyster diseases.1 Many formerly productive reefs are now functionally extinct, and it is estimated that 85 percent of reefs have been lost globally.2 The majority of commercial oysters are currently sourced from only five eco-regions in the world, concentrated on the east coast of North America and the northern Gulf of Mexico.2 In Louisiana, restoration of oyster reefs has been proposed to both mitigate the decline in stocks and to secure a number of co-benefits which oysters provide. Such restoration has an associated cost which has some asking: How much is an oyster worth?
Oyster reef restoration in Alabama. Source: NOAA Fisheries
Restoration of oyster reefs in the gulf would impart several benefits to the region including increases in oyster and fish stocks, improved water quality, erosion control, storm attenuation and economic stimulus for local businesses. Each of these benefits has an associated economic value and should be factored into the decision to bring oyster reef restoration to scale.
The most readily apparent economic benefit of oyster reef restoration is an increase in, or maintenance of, primary oyster productivity. Louisiana is the leading oyster producing state in the U.S., supporting an oyster industry that generates $35 million in dockside value annually.3 Additionally, oyster reefs serve as refuge and feeding ground for many estuarine species including fish, mobile crustaceans and invertebrates. This ecosystem benefit is especially pertinent along the Louisiana coast, where oyster reefs are the primary three-dimensional habitats available. In Louisiana, 23 percent of annual marine fishing occurs over oyster beds, and these areas provide approximately $2 million (2003 dollars) in fisheries value annually for coastal Louisiana.4
Oysters are filter feeders, and this filtration notably reduces the turbidity and nitrogen loading of their surrounding water. Reduction of turbidity — the removal of suspended solids — has been shown to have a significant recreational value for boating and beach swimming. The willingness to pay for reduction in bacteria and oil, as well as improvement in water color for beach goers, was estimated to be $23.39 per person per year.5 In a study of the Choptank River in Maryland, the economic value of the nitrogen removed by an oyster over a ten-year interval was found to be greater than the dockside value of the oyster.6 In a separate analysis, an acre of healthy oyster reef was estimated to yield $3,000 in de-nitrification value annually.7
Oyster ecosystem impacts. Source: NOAA
Additionally, the three-dimensional oyster reef structure attenuates wave energy, which can reduce erosion rates. Oyster reefs are generally understood to dampen wave energy by creating frictional energy between their rough outer surfaces and the wave. The associated economic value of wave attenuation is hard to determine, as it varies based on location. One factor to consider, however, is that the Gulf of Mexico has over 8,000 miles of shoreline that are at risk for erosion.8 Erosion rates and risk of flooding due to storm surge will continue to increase over time with global climate change, environmental degradation and subsidence of the area. If we choose to armor these shorelines, the current option is to install a bulkhead. Bulkheads can cost up to $1 million per mile, while oyster cultch placement — a common method for oyster reef restoration — can be completed for one-third of the cost.8
The industrial and commercial activity that would be generated by large-scale gulf oyster restoration will additionally boost the economy in the Gulf Coast and provide new job opportunities in the gulf and in 17 other states.9 Such restoration efforts would generally benefit small businesses, creating opportunities for local residents to both build new business and contribute to the sustainability of their region.
Restoration of oyster reefs may be necessary to maintain oyster landings in Louisiana, and it would also contribute to the sustainability of the region through ecological co-benefits, shoreline protection and economic stimulus. While these benefits may be difficult to generalize to a per-oyster dollar value, it is clear that the overwhelming co-benefits of oyster reef restoration in Louisiana should be considered in conjunction with the total cost of restoration.
1 Grabowski, J.H. & Peterson, C.H. Restoring oyster reefs to recover ecosystem services. Theoretical Ecology Series 281-298 (Elsevier Academic Press: Burlington, MA, 2007).
2 Beck, M.W. et al. Oyster Reefs at Risk and Recommendations for Conservation, Restoration, and Management. BioScience 61, 107-116 (2011).
3 Louisiana Department of Wildlife and Fisheries. Oyster Stock Assessment Report. (Baton Rouge, LA, 2010).
4 Henderson, J. & O’Neil, J. Economic Values Associated with Construction of Oyster Reefs by the Corps of Engineers. United States Army C (2003).
5 Freeman, A.M.I. The Benefits of Water Quality Improvements for Marine Recreation : A Review of the Empirical Evidence. 10, 385-406 (1995).
6 Newell, R., Fisher, T., Holyoke, R. & Cornwell, J. Influence of Eastern Oysters on Nitrogen and Phosphorus Regeneration in Chesapeake Bay, USA. The comparative roles of Suspension Feeders in Ecosystems 47, 93-120 (2005).
7 Piehler, M.F. & Smyth, A.R. Habitat-specific distinctions in estuarine denitrification affect both ecosystem function and services. Ecosphere 2, (2011).
8 National Fish and Wildlife Federation. Toward a Healthy Gulf of Mexico: A Coordinated Strategy for Oyster Restoration in the Gulf. 1-6 (2012).
9 Duke Center on Globalization, Governance & Competitiveness. Stokes, S., Wunderink, S., Lowe, M. & Gereffi, G. Restoring Gulf Oyster Reefs: Opportunities for Innovation (2012).
