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Assessing the Benefits of Levees: An Economic Assessment of U.S. Counties with Levees

Posted by Content Coordinator on Thursday, February 11th, 2010


A. Introduction
The recent list of U.S. Counties with levee protection obtained by provides an opportunity to examine the economic benefits associated with levees. Compiled by FEMA from a National Flood Insurance Program database, this list includes 881 U.S. counties that have flood protection levees. As coastal Louisiana faced recovery from devastating flooding, the nation questioned the wisdom of massive public investment in levees and other flood risk reduction infrastructure. This question reflected a long running debate regarding human settlement in floodplains that have been modified by levees and related flood reduction structures. Now we have the data needed to more thoroughly assess the economic benefits of using levees and other structures to protect populations that reside and work in floodplains.

From the onset, the data provided by FEMA shows an interesting and illustrative fact: US counties with levees, which account for only 28% of all counties in the country and only 37% of the total US land area, are home to a whopping 55% of the US population. In 2004, a majority of Americans, over 156 million citizens, resided in these counties. This simple fact suggests the influence of a strong “pull factor,” that is social and/or economic benefits that encourages migration to and settlement within these counties. Naturally, the levees themselves do not form a pull factor. Rather it is the landscape features associated with levees that explain this observed population trend.

Bodies of water — rivers, lakes, and seas – along with their associated flood plains have long been an engine of economic development. These diverse and productive ecosystems provide a number of services crucial to maintaining populations and improving their wellbeing. Such services include maritime trade, municipal and industrial water supply, irrigation for farming, sustainable seafood harvests, and recreation. Studies that have evaluated on a global scale the goods and services provided by ecosystems have found that aquatic based ecosystems provide the most valuable goods and services (Constanza 1997, Brauman 2007.)

In a world of both risks and opportunities, access to the benefits of these ecosystems entails exposure to certain risks. Most notably, damaging and deadly flood disasters can occur when fluctuations in the river’s water level results in the floodplain being inundated. So that humans can settle within and enjoy the benefits provided by floodplains, a number of structural adjustments to landscapes have been utilized. Levees are the most common such adjustment, though locks, floodgates, spillway diversions, retention ponds, and pump stations are also common. By minimizing the frequency and severity of flood events, these structural modifications to the landscape have allowed humans maximum access to the benefits of floodplains while reducing to flood risk.

As such, it is postulated that, by allowing human settlement into a productive and valuable type of ecosystem, levees are associated with economic well-being, and that populations that live near levees are more productive, have higher incomes, and less poverty. Naturally, the levees themselves do not determine these outcomes. Rather, it is the requisite proximity of the levees to bodies of water, or more specifically the proximity of levees to ports, municipal water intake systems, seafood markets, and employers of all trades and sizes, that leads to an expected association between levees and economic productivity.

Some academics have argued that, because levees encourage settlement in floodplains and contribute to flood losses, the drawbacks outweigh the benefits of such settlement locations. Planning expert Raymond Burby argues that this pattern forms a “safe development paradox” (Burby 2006), while social scientist and critic Denis Miletti writes that flood losses are “primarily the consequence of narrow and shortsighted development patterns, cultural premises, and attitudes” (Mileti 1999). While these authors do give cursory mention to the economic benefits of floodplains, a more robust analysis would not focus exclusively on the sensational losses witnessed during flood disasters while ignoring the tangible day-in, day-out benefits of settling within flood prone areas. By and large, this body of literature fails to assess the risk of floods relative to the benefits of floodplains, and does not answer the simple question of whether the risks outweigh the benefits.

Perhaps, the benefits of settling floodplains are real and substantial, and once the risks of floods are assessed in light of the benefits of floodplains in turns out that public and private investment into levees that facilitate settlement into floodplains yields positive net returns. While flood losses are unfortunate and should be minimized, the economic benefits – including increased income and decreased poverty — of direct access to the most productive types of ecosystem may still outweigh the risk of flood losses.

Using the list of US Counties with levees along with data obtained from the 2000 Census, the differential economic benefits associated with levees can be quantified, thus allowing for a more accurate assessment of the risks of settling in floodplains relative to the benefits. At the onset, it needs to be noted that the county level data only identifies counties that have a levee somewhere inside that county, and our analysis looks at the entire county population not just the population that resides in levee protected areas. However, in this regard, the “multiplier effect,” where primary industries generate additional employment in non-primary sectors, should also be noted. In other words, while the entire population of a county with a levee may not reside in areas protected by that levee, much of the population benefits from the direct and secondary jobs supported by the port (which is located near the levee). Likewise, nearly everyone utilizes the municipal water supply drawn from the water body adjacent to the levee.

Download full report (PDF): Assessing the Benefits of Levees

“ is a New Orleans-based non-profit formed by Sandy Rosenthal in December 2005 after Hurricane Katrina. The organization’s mission is to raise awareness that the flooding of metro New Orleans as a result of Hurricane Katrina was a man-made civil engineering disaster and not a natural disaster. also advocates for advancing discussions concerning the status of the nation’s levee systems. With nearly 25,000 registered supporters, is the largest organization operating within the US bringing attention to the nation’s levee systems. maintains active chapters throughout the US, including California, Florida, Illinois, New York and Oregon.

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