Natural protection: Coastal wetlands reduce cost of flood damages during hurricanes

“It was unexpected to find just how effective wetlands can be at reducing property damages from catastrophic storms and hurricanes. It was also critical that we were able to combine state-of-art engineering models with coastal ecology and economic analysis,” said Siddharth Narayan, a postdoctoral fellow at UC Santa Cruz and lead author of the study. “Our coastal habitats are natural defenses, and in this study, we show that their risk reduction services add up to hundreds of millions of dollars along the U.S. East Coast.”

“Our models traditionally focus on man-made coastal defense structures, or on other grey architecture solutions, like elevating properties above sea level,” said Paul Wilson, VP of model development at RMS and expert in hurricane and storm surge. “This study is pioneering because it applies cutting-edge modeling science to natural defenses, and it allows us to put a financial value on the role wetlands play in protecting our coastal communities against storm surges.”

Economic value
By quantifying the economic value of natural defenses, they can be more effectively included in risk models and coastal management. In fact, the protection they provide is often incorporated in industry risk models, but these benefits are often pooled with many other factors and then not clearly recognized by risk modelers, (re)insurers, brokers, clients, and others. Wetlands can be straightforwardly included in results provided by the risk and engineering sectors and thus more easily considered in coastal development and habitat restoration decisions.

UCSC notes that there were also additional critical findings for coastal policy makers. For example, some townships with few wetlands within their borders benefit greatly from wetland preservation in neighboring townships; the value of wetlands to properties accumulates as you move upstream away from the coast.

The magnitude of the benefits was surprising given how many coastal wetlands already have been lost throughout the region. For example, wetlands did not reduce as much damage in New York in part because of their extensive loss in past decades. At the same time, even relatively small, thin bands of wetlands serve as an effective first line of defense, and they can be restored to build coastal resilience.

Incentives to conserve and restore
“This work shows the unlikely yet powerful benefits of collaboration between insurers, engineers, and conservationists in identifying solutions to reduce risks to people, property, and nature,” Beck said. “The work highlights where we can find innovative financing opportunities and incentives for conserving and restoring coastal wetlands, which plainly put is good for the environment and good for business.”

“Lloyd’s Tercentenary Research Foundation aims to fund cutting-edge scientific research that contributes positively to society; this principle is embodied in the ongoing project led by the University of California at Santa Cruz,” said Jean-Bernard Crozet, trustee of Lloyd’s Tercentenary Research Foundation and head of underwriting modelling at MS Amlin. “Coastal ecosystems such as coral reefs, mangroves, and salt marshes play a fundamental role in reducing the risk of storm surge. The Lloyd’s Tercentenary Research Foundation (LTRF) believes that improved quantification of these benefits will, in turn, lead to better management and conservation of these natural ecosystems, contributing not only to risk reduction along our coasts but to our planet’s sustainability in the long run.”

The study was led by UC Santa Cruz; The Nature Conservancy and the Wildlife Conservation Society in association with Risk Management Solutions and Guy Carpenter & Company. The project was supported by the Lloyd’s Tercentenary Research Foundation with additional support from the Science for Nature and People Partnership (SNAPP).

— Read more in S. Narayan et al., Coastal Wetlands and Flood Damage Reduction: Using Risk Industry-based Models to Assess Natural Defenses in the Northeastern USA (Lloyds’ Tercentenary Research Foundation, October 2016)