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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. 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.
    2. 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.
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    Citations

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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. Karwowski, Nicole & Skidmore, Marin, 2023. "Nature’s Kidneys: the Role of the Wetland Reserve Program in Restoring Water Quality," 2023 Annual Meeting, July 23-25, Washington D.C. 335440, Agricultural and Applied Economics Association.
    3. 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.
    4. Ren, Qianping & West, Jeremy, 2023. "Cleaner waters and urbanization," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    5. 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, National Bureau of Economic Research, Inc.
    6. Molina, Renato & Costello, Christopher & Kaffine, Daniel, 2024. "Sharing and expanding the co-benefits of conservation," Ecological Economics, Elsevier, vol. 218(C).
    7. Ferreira, Susana, 2024. "Extreme Weather Events and Climate Change: Economic Impacts and Adaptation Policies," IZA Discussion Papers 16715, Institute of Labor Economics (IZA).
    8. 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).
    9. 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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