Researcher Q&A: Economic Evaluation of Coastal Land Loss in Louisiana

Partnering with Louisiana State University, RAND experts examined the economic assets that are most at risk of coastal land loss in the next 25 to 50 years. They addressed this question in the light of different future scenarios to help policymakers understand the impact if the coast is taken over even further by the sea.

Below, two members of the study team, Nicholas Burger and Craig Bond answer questions about this important analysis. To read the full report, visit coastal.la.gov.

Can you talk a little about the importance of this work and who is sponsoring it? What might the sponsor do with the findings?

This is a project to help the state of Louisiana understand the long-term economic implications of coastal land loss. The Louisiana Coastal Protection and Restoration Authority—CPRA for short—sponsored the project to provide information that will help the state guide the decisions it makes about coastal management and the value of coastal protection. We expect the findings will be relevant to a broad set of stakeholders, including the state government. The report will help CPRA better determine and allocate investments in strategies to address land loss.

There are two teams working on this—one from RAND and one from Louisiana State University. What unique qualities is each team brining to the project?

That's right, and it's really a true partnership! CPRA recognized that a Louisiana-based organization like LSU would bring critical local knowledge and context to project, while a “national” organization like RAND would bring a broad-based perspective. That has really worked well in our view, especially since both teams bring knowledgeable, highly trained researchers to bear on the important issue of coastal land loss.

RAND and LSU each took on specific land loss implications to analyze and quantify, which was an efficient approach, but we worked in concert throughout the project to share ideas, methods, and tackle challenging issues.

What are some of the specific things you looked at in the study?

We recognized early in the project that coastal land loss in Louisiana would have two central but distinct effects.

  • First, land loss directly affects structures, infrastructure, and economic activity that sit on land that may become marshland or open water in the future.
  • Second, land loss changes how the coast serves as a buffer zone for hurricanes, meaning future storms may do more damage to some areas. We needed to account for both of these changes.

Both types of effects can affect capital stocks, such as buildings, residences, and other infrastructure, and the economic flows that are enabled by those stocks. We also estimated how changes in economic activity in coastal Louisiana could reverberate through the broader U.S. economy. Finally, we know that there is a broad range of additional ecosystem services that coastland provides such as fishing and tourism—and we assessed these services and potential impacts from land loss.

What kinds of data did you use to collect this information? What kinds of methods?

We estimated the value of infrastructure and economic activity at risk from land loss and damage from storms by compiling multiple data sets on residential and commercial buildings, business activity, and network infrastructure. We started with land loss projections from the 2012 Coastal Master Plan, which allowed us to vary the time horizon (25 or 50 years in the future) and land loss severity. We applied the land loss projections to the economic data using multiple approaches, including the Coastal Louisiana Risk Assessment (CLARA) model developed through previous RAND research to estimate how storms lead to flood damage.

Unlike the analysis in the 2014 Louisiana Master Plan, we used a case study approach to storms, which allows us to focus on the incremental effects of land loss on particular storm events. To calculate broader economic impacts we relied on the IMPLAN model , which maps changes in economic activity in coastal Louisiana to changes in other parts of the economy.

What did you find?

  • We estimated that the value of economic infrastructure and activity “at risk” directly from land loss is approximately $8 billion to $11 billion. Because people and firms can adapt, this isn't necessarily a forecast of what would be lost, but rather provides a “footprint” of the scale of the problem.
  • The cost of increased storm damage for our Category 3 storm set is much larger, ranging from $10 billion to $133 billion in capital stock—buildings and transportation infrastructure—and $5 billion to $51 billion on lost economic output. While we were not able to quantify most types of ecosystem services other than storm protection, we cataloged the services that could be affected, ranging from fisheries, recreation, and damage to park and wildlife habitat. Previous research has estimated the overall value of coastal wetlands at between $15,000 and $113,000 per acre depending on the number of services included in the estimates and the methodology used.

What finding most surprised you?

The finding that really stood out to us was just how large the storm-related damage associated with land loss could be. In particular, there's a connection between land loss, storm damage, and manmade storm protection infrastructure, such as levees.

When we look out 50 years under the less optimistic land loss scenario, one of the storms we modeled causes levee failure in and around New Orleans on average, something that doesn't happen under the same conditions but without land loss. This pushes storm damages up substantially, and it emphasizes the role that coastal land plays in determining the effectiveness of man-made structures that protect economic infrastructure and activity. In other words, investments in coastal protection shouldn’t be evaluated independently of the environmental conditions that may exist in the future.