Economic Linkages Between Coastal Wetlands and Water Quality

ing from the technical measurement difficulties, there are a number of general benefits that accrue to society from its interaction with any large-scale ecosystem such as coastal wetlands (Pearce and Turner 1990). Ecosystems supply both stock and flow resources that can be used as direct and indirect inputs to production and consumption activities, thereby generating productivity and growth in the overall economic system. While the resources can be either renewable or nonrenewable, goods and services provided by Louisiana’s coastal wetlands (and their associated marine ecosystems) are generally considered renewable resources. The provision of quality water via purification processes can be considered one of these renewable resources, and it is tied to a second benefit, the ability of coastal wetlands to assimilate wastes. As long as the waste flow into the ecosystem is below its assimilative capacity, the ecosystem is able to turn the wastes into harmless and/or ecologically useful products. On a regional scale, however, assimilation capacity is dependent of the amount and distribution of the ecosystem in relationship to the waste sources. For Louisiana’s coastal wetlands, potential demands for water purification are in part diffuse, but also highly concentrated in some areas (particular for municipal wastewater treatment). Lastly, a benefit arises because ecosystems provide a source of utility that is independent of its direct consumptive uses. This utility, derived through the biological and cultural diversity of ecosystems, is generated by coastal wetlands through non-consumptive use activities (such as viewing) and knowledge that the functioning ecosystem exists. Water quality is an integral component of this last source of benefits from coastal Louisiana wetlands. Once the benefits of an ecosystem are identified, economic values need to be assigned to these benefits. Having these assigned values allows policy makers to quantitatively assess the economic benefits that society might gain from marginal improvements in the integrity of the ecosystem. Value is associated with the amount that society (both current and future generations) would be willing to pay for the services and attributes provided by the ecosystem if they were not provided free of charge. The greater the benefits derived from the services provided by any particular ecosystem, the more that ecosystem is valued by society. In general, the value of these services tends to be positively related with the integrity of the ecosystem. Of course, any action taken to decrease the loss of Louisiana’s coastal wetlands, and thus increase the welfare of society at large, comes with a cost. These costs must be weighed against the benefits to determine, from the criteria of welfare economics, whether specific restoration or preservation actions are warranted, and to what extent. 8 While significant nonrenewable mineral extraction, and the related economic activity, takes place in coastal Louisiana and the adjacent continental shelf, to a large extent its continued existence is not dependent on maintaining the integrity of the coastal wetlands. The extraction industry’s cost structure may change if coastal wetlands are lost, but not likely to the extent that they would become economically infeasible. Navigation and port activities, however, are more likely to be negatively affected by the loss of coastal wetlands.