| | Hurricanes can wreak havoc on barrier islands. This photo of Breton Island in Plaquemines Parish was taken in 2001. All of the structure and approximately 80 percent of the land on this island was lost during Hurricane Katrina. (Photo courtesy of U.S. Army Corps of Engineers) |
| | | “Barrier island restoration is often cost-prohibitive because it requires working in a remote, high energy environment,” said CNREP director Rex H.Caffey. “Just one individual project can cost more than $100 million dollars to implement, and all of that investment can be lost overnight during one hurricane.” Caffey and others in CNREP are working to improve the economic and ecological efficiency in which the state allocates its limited funding for coastal restoration, such as at East Island, located in Lower Terrebonne Parish. (Photo courtesy of U.S. Army Corps of Engineers) |
| | | Louisiana has approximately 750,000 recreational anglers, more than half of whom fish in coastal areas. Barrier islands provide solitude and prime fishing for those individuals who have access by boat. (Photo by Rex H. Caffey) |
| | | | | |
Christine Aust and Rex H. Caffey
More than half a billion dollars has been spent in Louisiana in the past two decades on coastal restoration projects ranging from small community-based efforts to large ecosystem-scale programs. The most significant efforts have come by way of the Coastal Wetlands Planning, Protection and Restoration Act (CWPPRA). From its inception in 1990, CWPPRA has authorized more than 155 restoration projects, with 128 of these classified as active – either constructed or in some phase of construction. Most CWPPRA projects are designed to restore or protect coastal wetlands using a combination of vegetative, structural and hydrologic restoration techniques.
In 1998, a group of more than 30 local, state and federal agencies participated in “Coast 2050,” a coast-wide reassessment of Louisiana’s wetland loss and the efforts under way to address the crisis. They concluded that to merely sustain the state’s remaining coastal land would require 77 aggressive restoration projects at an estimated cost of $14 billion. At the current funding level of $35 million - $50 million annually, CWPPRA was providing less than 10 percent of that amount. Several large-scale restoration initiatives were developed in the wake of the Coast 2050 report, though no major programs have been authorized to date.
Objectives
In 2004, Congress reauthorized CWPPRA funding for an additional 15 years. At that time, the U.S. Army Corps of Engineers embarked on a reevaluation of the biophysical aspects of the program to better meet restoration needs. Concurrently, an independent economic evaluation of CWPPRA was initiated by the LSU AgCenter’s Center for Natural Resource Economics and Policy (CNREP). That evaluation was predicated on the authorizing language in CWPPRA legislation, which states:
Coastal wetlands restoration projects in Louisiana (will) provide for the long-term conservation of such wetlands and dependent fish and wildlife populations in order of priority, based on the cost-effectiveness of such projects in creating, restoring, protecting, or enhancing coastal wetlands. (Public Law 646 1990, Sec. 3952 1(b))
The primary objective of the CNREP study was to examine the role of cost-effectiveness in CWPPRA. Specific objectives included 1) documenting how costs and benefits of projects are calculated, 2) examining how specific project attributes affect costs, and 3) assessing the degree to which cost-efficacy has been a determinant of the project selection process.
Results
The CWPPRA program estimates project benefits using the Wetland Value Assessment method. This method is derived from a habitat suitability framework in which a suite of optimal environmental conditions is used to evaluate the forecasted conditions generated from a proposed project. The output of WVA, expressed as dollars per Average Annual Habitat Unit ($/AAHU), has been the primary cost-efficacy standard of measurement upon which CWPPRA dollars have been allocated.
An analysis of authorized active projects was conducted to examine the cost characteristics of specific project attributes. With average costs of $9,461 per AAHU for shoreline projection projects and $10,416 per AAHU for barrier island restoration, these are the most expensive and least efficient of all project types. They were more than double the average cost for nine categories of restoration technology used within the CWPPRA program.
Accordingly, the coastal regions and federal sponsors associated with those two project types had a much higher average cost per AAHU. And while slight economies of scale appeared present in the aggregated data for all project types, those efficiencies do not hold up over time. During the first 14 years of the program, average costs for all project types increased from a low of $700/AAHU in 1993 to more than $15,000/AAHU in 2004. Some of this increase can be explained by improved accounting. Project managers assert that benefits were overestimated and cost underestimated in the early years of the program.
To account for any additional factors contributing to this increase, a two-stage assessment was conducted using data collected from all candidate projects nominated to the program from 1991 through 2004. Cost-efficiency was found to be significant and negatively related to project selection over the 14-year span of the program, indicating that managers have been generally mindful of the program’s annual budget constraint. This was especially the case during the initial years of the CWPPRA program (1990- 1995), when projects were ranked according to cost-efficiency and those with the lowest cost were usually selected for funding. In recent years (1999-2004), however, the least efficient projects (higher costs per AAHU) were found to be significantly and positively related to project selection. In many cases, these less efficient projects were expensive, large-scale barrier island and shoreline protection projects.
Implications
Results of the CNREP study suggest that CWPPRA appears to be moving away from a selection process once highly sensitive to cost-effectiveness. While some of the apparent loss in efficiency may be due to improved cost and benefit accounting, projects with higher costs and less effectiveness appear to have been favored in recent years. CWPPRA has increasingly selected barrier island and shoreline protection projects, despite their relative inefficiency and higher costs compared to other project types. Ultimately, this trend is problematic given the program’s fixed annual budget. The findings and recommendations of this research should prove useful in assuring that benefits of Louisiana’s coastal restoration and preservation efforts are maximized given the limited amount of funding available.
Christine Aust, Graduate Research Assistant, and Rex H. Caffey, Associate Professor and Director, Center for Natural Resource Economics & Policy, Department of Agricultural Economics & Agribusiness, LSU AgCenter, Baton Rouge, La.
(This article was published in the spring 2007 issue of Louisiana Agriculture.) |