Abstract
There is growing interest in floodplain conservation as a flood damage reduction strategy, particularly given the co-benefits that protected lands provide. We evaluate one such investment—a greenway along the Meramec River in St. Louis County, Missouri. We estimate the opportunity costs, the avoided flood damages, and the capitalization of proximity to protected lands into nearby home prices. To estimate avoided flood damages, we undertake a parcel-level analysis using the Hazus-MH flood model, a GIS-based model developed for FEMA that couples a hydrology and hydraulics model with a damage model relating flood depths to property damage. We examine the distribution of damages across parcels, demonstrating that careful spatial targeting can increase the net benefits of floodplain conservation. In addition, we estimate a hedonic model and find that the increased property values for homes near protected lands are more than three times larger than the avoided flood damages, stressing the continued importance of more traditional conservation values. The proximity benefits alone exceed the opportunity costs; the avoided flood damages further strengthen the economic case for floodplain conservation.
1. Introduction
Several severe flooding events over the last few years have brought increased attention to the damages caused by natural disasters. Worldwide, flooding is not only the most costly natural disaster, but has also affected the most people (Miller et al., 2008; Stromberg, 2007). In the United States over the twentieth century, out of all natural disasters, flood events were responsible for the highest number of fatalities and the most property damage (Perry, 2000). And the economic costs of flooding have been increasing over the last several decades, largely due to more people and property locating in hazardous areas (Pielke and Downton, 2000). In addition, many climate models predict an increase in heavy precipitation as the climate warms, which may increase the risk of flooding in certain locations (e.g. Kollat et al., 2012; Wuebbles et al., 2009).
6. Discussion and Conclusion
In this paper, we have undertaken a retrospective analysis of the costs and benefits of an investment in floodplain conservation, the Meramec Greenway in St. Louis County, Missouri. By developing a unique parcel-level database and a counterfactual scenario of forgone development, we were able to estimate the avoided flood damages of the Meramec Greenway and the full opportunity costs of the land preservation that has occurred to date. The floodplain conservation, like many such projects, was not undertaken solely for flood protection, however, but also for the range of other benefits these protected lands provide. We thus estimated a hedonic property model for the study area to identify the extent to which proximity to the Greenway was positively capitalized in housing values. Of note, these benefits are almost three times greater than the avoided flood damages and, on their own, exceed the opportunity costs of the conservation investment.
