New LSU Study Underscores Regional Economic Costs of Coastal Land Loss

03.22.2017 | In Press Releases

Study also shows economic benefits of implementing state’s Coastal Master Plan

(Baton Rouge – March 22, 2017) Louisiana could lose as much as $3.6 billion in homes, businesses and other infrastructure over the next 50 years if the state takes no action to curb its coastal land loss crisis, according to a new study released today by the Louisiana State University (LSU) Economics & Policy Research Group. The study, “Regional Impacts of Coastal Land Loss and Louisiana’s Opportunity for Growth,” comes out as the state is reviewing the Draft 2017 Coastal Master Plan. The study was commissioned by Environmental Defense Fund and builds upon a previous 2015 study by LSU and the RAND Corporation.

In addition to damage to buildings and infrastructure, the study also identifies $7.6 billion in lost wages, consumer spending and supply chain disruptions that could “spread throughout the nation due to the state’s importance in shipping, energy production, chemicals and other sectors” if no action is taken to restore the coast.

Continued loss of coastal wetlands could also mean far greater economic damages to the state further inland when major storms strike the coast. In addition to the direct impact of land loss, the report identifies damages in lost businesses, residential and infrastructure assets that could increase by as much as $138 billion from one single major storm, with a possible additional $53 billion in disrupted economic activity.

“While the imminent risk of land loss is well known across coastal Louisiana, this report shows how the economic consequences would reach far beyond those areas directly impacted,” said Stephen Barnes, primary author of the study and director of the Economics & Policy Research Group at LSU.

The study goes further and outlines potential regional economic losses for the five most vulnerable areas of south Louisiana. If the state takes no action to restore the coast, these regions could face the following economic damages as a direct consequence of land loss alone:

New Orleans: $1.7 billion in infrastructure replacement costs; $1.7 billion in business disruptions

Baton Rouge: $60 million in infrastructure replacement costs; $600 million in business disruptions

Houma: $1.4 billion in infrastructure replacement costs; $1.4 billion in business disruptions

Lafayette: $140 million in infrastructure replacement costs; $390 million in business disruptions

Lake Charles: $420 million in infrastructure replacement costs’ $490 million in business disruptions

These regional costs would increase if a major storm were to hit the coast. For example, if nothing is done to stop Louisiana’s land loss crisis, an eastern-tracking storm with a path similar to Hurricane Katrina would cause $130 billion in replacement costs and $26 billion in business disruptions in New Orleans alone.

The report buttresses growing concern among coastal regions about whether businesses will survive without urgent coastal restoration. “Restoring and protecting our coast is vital to the protection of the industries that support our economy,” said Mike Dever, President of the Chenier Plain Coastal Restoration and Protection Authority. “We depend on oil and gas, LNG, petrochemicals, fisheries, and ports, which by necessity are located on the coast. If the coast washes away, the facilities and communities that support that economy will be washed away. You cannot have one without the other.”

But the study also found cause for optimism. Investing in coastal protection and restoration will not only buffer existing coastal communities and infrastructure, but it will also support up to 10,500 total jobs every year and generate as much as $1.5 billion in additional annual economic output. Investments in coastal restoration could provide sustained jobs for construction workers, plumbers, pipefitters, engineers, architects, computer programmers and others, according to the study.

“LSU’s ground-breaking research shows the importance of making sure that every dollar designated for coastal restoration goes to coastal restoration,” said Steve Cochran, Associate Vice President for Coastal Protection at Environmental Defense Fund. “If we take action to restore our coast, we can not only avert catastrophic losses, we can actually improve the state’s economy and grow jobs. Louisiana could become the model for coastal communities across the globe that are struggling with land loss, rising seas and increased storms.”

“There is no question that the state has to continue to be aggressive in its fight against land loss and storm vulnerability, but this report also helps clarify the tremendous economic benefits that come from that investment,” said Johnny Bradberry, Executive Assistant to the Governor for Coastal Activities. “Sustaining over 10,000 jobs per year and creating added value for the state are just more reasons CPRA’s commitment to the coast is so important to Louisiana.” 

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