Economic valuation of flood mitigation services: A case study from the Otter Creek, VT.
Wednesday, 17 December 2014: 11:20 AM
The ecosystem services provided by wetlands are widely recognized but difficult to quantify. In particular, estimating the effect of landcover and land use on downstream flood outcomes remains challenging, but is increasingly important in light of climate change predictions of increased precipitation in many areas. Economic valuation can help incorporate ecosystem services into decisions and enable communities to plan for climate and flood resiliency. Here we estimate the economic value of Otter Creek wetlands for Middlebury, VT in mitigating the flood that followed Tropical Storm Irene, as well as for ten historic floods. Observationally, hydrographs above and below the wetlands in the case of each storm indicated the wetlands functioned as a temporary reservoir, slowing the delivery of water to Middlebury. We compare observed floods, based on Middlebury’s hydrograph, with simulated floods for scenarios without wetlands. To simulate these “without wetlands” scenarios, we assume the same volume of water was delivered to Middlebury, but in a shorter time pulse similar to a hydrograph upstream of the wetlands. For scenarios with and without wetlands, we map the spatial extent of flooding using LiDAR digital elevation data. We then estimate flood depth at each affected building, and calculate monetary losses as a function of the flood depth and house value using established depth damage relationships. For example, we expect damages equal to 20% of the houses value for a flood depth of two feet in a two-story home with a basement. We define the value of flood mitigation services as the difference in damages between the with and without wetlands scenario, and find that the Otter Creek wetlands reduced flood damage in Middlebury by 88% following Hurricane Irene. Using the 10 additional historic floods, we estimate an ongoing mean value of $400,000 in avoided damages per year. Economic impacts of this magnitude stress the importance of wetland conservation and warrant the consideration of ecosystem services in land use decisions. Our study indicates that here and elsewhere, green infrastructure may have to potential to increase the resilience of communities to projected changes in climate.