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Wetlands, Flooding, and the Clean Water Act

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  • Charles A. Taylor
  • Hannah Druckenmiller

Abstract

In 2020 the Environmental Protection Agency narrowed the definition of "waters of the United States," significantly limiting wetland protection under the Clean Water Act. Current policy debates center on the uncertainty around wetland benefits. We estimate the value of wetlands for flood mitigation across the United States using detailed flood claims and land use data. We find the average hectare of wetland lost between 2001 and 2016 cost society $1,840 annually, and over $8,000 in developed areas. We document significant spatial heterogeneity in wetland benefits, with implications for flood insurance policy and the 50 percent of "isolated" wetlands at risk of losing federal protection.

Suggested Citation

  • Charles A. Taylor & Hannah Druckenmiller, 2022. "Wetlands, Flooding, and the Clean Water Act," American Economic Review, American Economic Association, vol. 112(4), pages 1334-1363, April.
    • Handle: RePEc:aea:aecrev:v:112:y:2022:i:4:p:1334-63
    DOI: 10.1257/aer.20210497
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    References listed on IDEAS

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    1. Justin Gallagher, 2014. "Learning about an Infrequent Event: Evidence from Flood Insurance Take-Up in the United States," American Economic Journal: Applied Economics, American Economic Association, vol. 6(3), pages 206-233, July.
    2. Heimlich, Ralph E. & Wiebe, Keith D. & Claassen, Roger & Gadsby, Dwight M. & House, Robert M., 1998. "Wetlands and Agriculture: Private Interests and Public Benefits," Agricultural Economic Reports 34043, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Kuwayama, Yusuke & Olmstead, Sheila & Zheng, Jiameng, 2022. "A more comprehensive estimate of the value of water quality," Journal of Public Economics, Elsevier, vol. 207(C).
    2. Susana Ferreira, 2024. "Extreme Weather Events and Climate Change: Economic Impacts and Adaptation Policies," Annual Review of Resource Economics, Annual Reviews, vol. 16(1), pages 207-231, October.
    3. repec:ags:aaea22:335440 is not listed on IDEAS
    4. Lin, Yatang & McDermott, Thomas K.J. & Michaels, Guy, 2024. "Cities and the sea level," Journal of Urban Economics, Elsevier, vol. 143(C).
    5. Reynaert, Mathias & Souza-Rodrigues, Eduardo & van Benthem, Arthur A., 2024. "The environmental impacts of protected area policy," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    6. Winston P. Hovekamp & Katherine R. H. Wagner, 2023. "Efficient Adaptation to Flood Risk," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 304-309, May.
    7. Ren, Qianping & West, Jeremy, 2023. "Cleaner waters and urbanization," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    8. Fenichel, Eli P. & Dean, Monica F., 2024. "Blended academic insights for biodiversity and conservation finance," Ecological Economics, Elsevier, vol. 223(C).
    9. Raff, Zach & Earnhart, Dietrich, 2024. "Environmental monitoring and enforcement at animal feeding operations: The effects on surface water quality," 2024 Annual Meeting, July 28-30, New Orleans, LA 343659, Agricultural and Applied Economics Association.
    10. Charles A. Taylor & Geoffrey Heal, 2021. "Fertilizer and Algal Blooms: A Satellite Approach to Assessing Water Quality," NBER Chapters, in: Risks in Agricultural Supply Chains, pages 83-105, National Bureau of Economic Research, Inc.
    11. Molina, Renato & Costello, Christopher & Kaffine, Daniel, 2024. "Sharing and expanding the co-benefits of conservation," Ecological Economics, Elsevier, vol. 218(C).
    12. Mutlu, Asli & Roy, Debraj & Filatova, Tatiana, 2023. "Capitalized value of evolving flood risks discount and nature-based solution premiums on property prices," Ecological Economics, Elsevier, vol. 205(C).
    13. Paul, Laura A. & McGranaghan, Christina & Siders, A.R. & Dineva, Polina K. & Palm-Forster, Leah H. & Messer, Kent D., 2024. "Addressing coordination problems in residential buyouts: Experimental evidence for managed retreat in the face of climate change-related threats," Journal of Economic Behavior & Organization, Elsevier, vol. 226(C).
    14. Winston P. Hovekamp & Katherine R. H. Wagner, 2023. "Efficient Adaptation to Flood Risk," CESifo Working Paper Series 10243, CESifo.

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    More about this item

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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