BP Oil Disaster Threatens Mississippi Delta Goods and Services Worth Far More than BP's Value

FOR IMMEDIATE RELEASE

Contacts:
David Batker, Exec. Dir., Earth Economics, 253-678-1563, dbatker@eartheconomics.org
Sean Crowley, Environmental Defense Fund, 202-572-3331, scrowley@edf.org
John Day, Professor Emeritus, Louisiana State Univ., 225-773-7165-c, johnday@lsu.edu

(Baton Rouge, LA–June 10, 2010) The BP oil disaster, hurricanes and wetlands loss threaten a net value of $330 billion to $1.3 trillion in natural system goods and services, according to the first study of the Mississippi River Delta as a capital asset. Even the low end estimate of the Delta’s value exceeds BP’s market capitalization before the oil disaster on April 20 of $189 billion. The study was completed shortly before the spill.

By protecting against hurricanes, assuring water supply, buffering climate instability, supporting fisheries and other food and fur stocks, maintaining critical habitat, providing waste treatment, and additional benefits, these natural systems provide $12 billion to $47 billion in benefits every year.

“These huge numbers show that the BP oil spill, hurricanes and continued wetland degradation threaten not only the Gulf regional economy, but the national economy,” said report coauthor David Batker, one of the world’s foremost ecological economists and executive director of Earth Economics. “Unlike the Exxon Valdez oil disaster in 1989, we now have solid economics to put a value on the damage done to natural systems and the resulting harm to people. The Gulf economy needs nature to survive.”

The report, Gaining Ground - Wetlands, Hurricanes and the Economy: The Value of Restoring the Mississippi River Delta [PDF], evaluates 11 natural system goods and services. They include: water supply, water flow regulation, hurricane protection, food production, raw materials production, recreational value, carbon sequestration, atmospheric composition regulation, waste treatment, aesthetic value and habitat value.

The study points out the threatening confluence of oil pipelines, flood protection and Mississippi River levees that collectively have degraded the wetlands that protect against hurricanes, climate change, sinking land and larger hurricanes.

The experts’ solution is to restore the Mississippi River Delta wetlands—that have lost more land area since 1930, 2,300 square miles, than the size of the state of Delaware—by using the energy, water and sediment of the Mississippi River to rebuild them.

“The renewable resources under threat in coastal Louisiana are crucial to ensure a sustainable and prosperous 21st century economy,” said Paul Harrison, senior director of the Mississippi River project for Environmental Defense Fund. “It is time for the nation to focus on rebuilding the Mississippi River Delta wetlands or risk dire economic consequences.”

The report examines three future scenarios: continued wetland loss, minor wetlands restoration efforts and a major wetlands restoration. The study shows that large-scale wetlands restoration is a good financial investment for the Gulf region and the nation, bringing in an annual net benefit of $62 billion, by producing benefits with an estimated present value of at least $21 billion and avoiding $41 billion in damages.

For example, for about every 2.5 miles of wetlands, one foot of a hurricane storm surge is removed. If coastal Louisiana had the 7,000 square miles of wetlands that it had in 1930, much of the nearly $200 billion in damages from Katrina might have been avoided.

“Large diversions work, so the solution is clear,” said Dr. John Day, a life-long Delta resident, study co-author and world-renowned wetland expert. “It is rebuilding the Mississippi River Delta and that provides hurricane buffering, fisheries, recreation, clean water, and a host of other highly valuable natural system goods and services.”

“It is time for our nation to invest in this delta, which is an engine of economic productivity,” concluded Dr. Day, a professor emeritus from Louisiana State University and former chairman of the National Technical Review Committee to oversee and review the Louisiana Coastal Area Project to restore the Mississippi Delta. “If healthy, the Mississippi River Delta wetlands will provide benefits in perpetuity.”