Coastal Wetlands Found to Reduce Hurricane Property Damage by 10%-30%

October 27, 2016

Coastal wetlands provide important natural protection during hurricanes. How much? Natural habitats reduced property damage by about $625 million in the Northeast during Hurricane Sandy in 2012, a new study supported by Lloyd’s of London and conducted by scientists has found.

As communities across the Southeast U.S. and the Caribbean count the cost of flood damage during Hurricane Matthew, the study, Coastal Wetlands and Flood Damage Reduction has quantified how much protection natural coastal habitats provide during hurricanes.

Using the latest modelling techniques scientists from the conservation, engineering and insurance sectors studied the impact of Hurricane Sandy in the Northeast U.S. in 2012, when New York and New Jersey were badly hit by storm surges. The study found more than $625 million in property damages were prevented during this natural catastrophe by coastal wetlands along the Northeast coast. Without them the damage bill would have been much higher for Sandy and other predicted hurricanes, according to the study.

Where wetlands remain, the average damage reduction from Sandy was greater than 10 percent. Experts within the study team expect that the analyses of the effects of Hurricane Matthew earlier this month will demonstrate similar protections.

In Maryland, wetlands reduced property damages by nearly 30 percent, and in New Jersey, wetlands prevented $425 million in property damages. In Ocean County, N.J., the conservation of salt marshes is predicted to reduce average annual coastal property losses by more than 20 percent.

Wetlands are critical not just for catastrophic hurricanes, but also for all the likely storms in the region, according to the scientists.

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

“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, University of California Santa Cruz (UCSC) Research Fellow, 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.”

Modelling has traditionally focused on man-made coastal defense structures, or on other grey architecture solutions, like elevating properties above sea level, according to Paul Wilson, vice president of Model Development at modelling firm RMS and an expert in hurricane and storm surge.  However, he said, this study is “pioneering because it applies cutting-edge modelling 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.”

Quantifying the economic value of natural defenses means they can be more effectively included in risk models and coastal management, Wilson said.  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 model users including reinsurers and insurers. The study finds that 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.

There were also additional 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 wetland to properties accumulate upstream away from the coast.

The authors said 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.

“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,” said Michael Beck, The Nature Conservancy’s Lead Marine Scientist, UCSC Adjunct Professor, and LTRF Project Lead. “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” such as 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,” Crozet said. “The 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.”

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