Barnes, EDF Study Underscores Regional Economic Costs of Coastal Land Loss

March 22, 2017

Stephen Barnes head shotStephen Barnes

BATON ROUGE - Louisiana could lose as much as $3.6 billion in homes, businesses and other infrastructure over the next 50 years if the state takes no action to curb its coastal land loss crisis, according to a new study released today by the LSU Economics & Policy Research Group at the E. J. Ourso College of Business. The study, “Regional Impacts of Coastal Land Loss and Louisiana’s Opportunity for Growth,” comes out as the state is reviewing the Draft 2017 Coastal Master Plan. The study was commissioned by Environmental Defense Fund and builds upon a previous 2015 study by LSU and the RAND Corporation.

In addition to damage to buildings and infrastructure, the study also identifies $7.6 billion in lost wages, consumer spending and supply chain disruptions that could “spread throughout the nation due to the state’s importance in shipping, energy production, chemicals and other sectors” if no action is taken to restore the coast.

Continued loss of coastal wetlands could also mean far greater economic damages to the state further inland when major storms strike the coast. In addition to the direct impact of land loss, the report identifies damages in lost businesses, and residential and infrastructure assets that could increase by as much as $138 billion from one single major storm, with a possible additional $53 billion in disrupted economic activity.

“While the imminent risk of land loss is well known across coastal Louisiana, this report shows how the economic consequences would reach far beyond those areas directly impacted,” said Stephen Barnes, primary author of the study and director of the Economics & Policy Research Group at LSU.

The study goes further and outlines potential regional economic losses for the five most vulnerable areas of south Louisiana. If the state takes no action to restore the coast, these regions could face the following economic damages as a direct consequence of land loss alone:

New Orleans: $1.7 billion in infrastructure replacement costs; $1.7 billion in business disruptions

Baton Rouge: $60 million in infrastructure replacement costs; $600 million in business disruptions

Houma:
 $1.4 billion in infrastructure replacement costs; $1.4 billion in business disruptions


Lafayette: $140 million in infrastructure replacement costs; $390 million in business disruptions

Lake Charles: $420 million in infrastructure replacement costs; $490 million in business disruptions

These regional costs would increase if a major storm were to hit the coast. For example, if nothing is done to stop Louisiana’s land loss crisis, an eastern-tracking storm with a path similar to Hurricane Katrina would cause $130 billion in replacement costs and $26 billion in business disruptions in New Orleans alone.

The report buttresses growing concern among coastal regions about whether businesses will survive without urgent coastal restoration. “Restoring and protecting our coast is vital to the protection of the industries that support our economy,” said Mike Dever, president of the Chenier Plain Coastal Restoration and Protection Authority. “We depend on oil and gas, LNG, petrochemicals, fisheries, and ports, which by necessity are located on the coast. If the coast washes away, the facilities and communities that support that economy will be washed away. You cannot have one without the other.”

But the study also found cause for optimism. Investing in coastal protection and restoration will not only buffer existing coastal communities and infrastructure, but it will also support up to 10,500 total jobs every year and generate as much as $1.5 billion in additional annual economic output. Investments in coastal restoration could provide sustained jobs for construction workers, plumbers, pipefitters, engineers, architects, computer programmers and others, according to the study.

“LSU’s groundbreaking research shows the importance of making sure that every dollar designated for coastal restoration goes to coastal restoration,” said Steve Cochran, associate vice president for coastal protection at Environmental Defense Fund. “If we take action to restore our coast, we can not only avert catastrophic losses, we can actually improve the state’s economy and grow jobs. Louisiana could become the model for coastal communities across the globe that are struggling with land loss, rising seas and increased storms.”

“There is no question that the state has to continue to be aggressive in its fight against land loss and storm vulnerability, but this report also helps clarify the tremendous economic benefits that come from that investment,” said Johnny Bradberry, executive assistant to Louisiana Gov. John Bel Edwards for coastal activities. “Sustaining more than 10,000 jobs per year and creating added value for the state are just more reasons CPRA’s commitment to the coast is so important to Louisiana.”

About the LSU Economics & Policy Research Group

Based in the E. J. Ourso College of Business at LSU, the Economics & Policy Research Group (EPRG) is an applied economics research unit of the Department of Economics focused on advancing the scientific knowledge base on topics relevant to Louisiana’s economy. LSU EPRG aims to contribute advances to the general body of economics research, inform public decision making, support economic development, and promote a strong, resilient Louisiana economy accessible to all Louisiana residents. To learn more, visit our home page.

 

About the Environmental Defense Fund

Environmental Defense Fund, a leading international nonprofit organization, creates transformational solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-sector partnerships. Connect with it on EDF VoicesTwitter and Facebook.

 

What Regional Business Leaders Are Saying About the Report

“Most people don’t associate coastal land loss with the Baton Rouge region, but this report shows that the economic disruptions could be severe. Over the past few years, Baton Rouge has established itself as a globally-recognized destination for companies and countries seeking to solve complex coastal, deltaic and other water challenges, thanks to our being home to Louisiana’s Coastal Protection and Restoration Authority, LSU, The Water Institute of the Gulf and The Water Campus.”
- Kyle Zeringue, Senior Vice President, Baton Rouge Area Chamber

“Cameron Parish is on the front line of coastal land loss in Louisiana; however, those communities who sit farther inland are not immune to the effects of our eroding coastline. Our state cannot afford to lose any more of our precious coast. Residents, businesses and major industries must educate themselves and commit to taking bold steps together to protect, preserve, restore and save our coast.”
- Clair Hebert Marceaux, Port Director, Cameron Parish Port, Harbor & Terminal District

“At Port Fourchon, we understand the importance of having natural protective buffers for our communities and critical infrastructure. This report helps to quantify what we’ve been saying all along about the importance of coastal restoration as a vital component of economic and community resiliency as evidenced by the fact that the Houma region has the second-highest potential economic losses due to storms, despite being the smallest market studied.”
- Chett Chiasson, Executive Director, Greater Lafourche Port Commission

"While the economic risks our coastal land loss pose to the Greater New Orleans region are undoubtedly the existential threat of our generation, the jobs created through restoring our coast provide significant economic returns for our parishes and communities. However, these jobs represent more than just paychecks: they illustrate an unprecedented opportunity for the workforce, businesses, and universities of Southeast Louisiana to emerge as a hub of water management expertise, and export our lessons learned nationally and internationally."​
- Michael Hecht, President and CEO, Greater New Orleans Inc.

“This is valuable research that helps us all better appreciate the importance of Louisiana’s land loss challenges as well as the opportunity to work together to solve them.”
- Jason El Koubi, President and CEO, One Acadiana

“Without coastal restoration, Houma and New Orleans are the two regions that would be hardest hit in terms of both infrastructure damage and economic disruption. People and industries of south Louisiana support the state’s Coastal Master Plan because it’s our best hope for maintaining and growing our economy in the future.”
- Vic Lafont, President and CEO, South Louisiana Economic Council

“The people of Southwest Louisiana and its economy are dependent on the coast and its resources. Whether industry with our ports, fishing economy, tourism and recreational fishing, the region is tied to the coast. With land loss and erosion our economy and lifestyle are threatened. It is vital that coastal restoration and protection be a top priority; otherwise, all that we have will be taken away acre by acre.”
- George Swift, President and CEO, Southwest Louisiana Economic Development Alliance

 

Angela McBride
LSU E. J. Ourso College of Business
225-578-7833