Economic Impacts of Habitat Restoration (3/22/14)

  • Posted by Dawn Merritt
    By Olivia Dorothy, IWLA Regional Conservation Coordinator. 
    Habitat restoration projects on the Upper Mississippi provide double their value through local economic benefits.

    The Upper Mississippi River Restoration Program, also known as the Environmental Management Program, was authorized by Congress in 1986. The program was established to restore and enhance river habitat and mitigate the environmental impacts of the lock and dam system on the Mississippi and Illinois Rivers. The program has completed more than 50 habitat rehabilitation and enhancement projects between the Twin Cities and St. Louis. More than $400 million has been appropriated to date, and about 70 percent of that has gone directly to habitat construction.
    With the program approaching its 30th birthday, many Mississippi River managers, scientists, and members of Congress are asking, “What has the program given back?” We know that the program has restored natural habitat on more than 100,000 acres, at an average cost of $3,000 per acre. But what does this mean for the economy? At the Upper Mississippi River Conservation Committee meeting this week, one contractor tried to answer that question, or at least part of it. 
    A representative from J.F. Brennan Company Inc., which is based in La Crosse, Wisconsin, reviewed two recent habitat restoration contracts that were typical in the size and scope of Upper Mississippi River Restoration program projects. Both contracts required 50 percent of the 12-person labor force to come from the local community. At the two project sites, the contractors spent $231,000 and $431,000 (respectively) on local vendors and goods ranging from food and motel rooms to fuel and equipment repairs. The population of the local communities near both of these sites was less than 5,000.
    Clearly this is small sample size, but let’s extrapolate using this information. Assuming each of the more than 50 habitat restoration projects spent an average of $331,000 on local vendors, that’s a $16.5 million contribution to small businesses along the Mississippi River. And that’s more than 300 people (6 per site) hired in rural counties where, so often, unemployment is the highest following the closure of factories and other industries along the river.
    Of course, another important economic contribution of these restoration projects is eco-based tourism. Many of these sites have become popular fishing tournament locations, which by some estimates brings about $11 million to the local economy per event. And scientists estimated in a 1997 “Nature” article that healthy floodplains and rivers deliver about $8,080 per acre annually in economic benefits including flood risk reduction and pollution filtration. Adjusting for inflation and applying that figure over the more than 100,000 acres restored on the Upper Mississippi River through the program, that’s something like $1.2 billion in annual benefits from the ecosystem alone!
    I made some generalizations here, but I don’t think I’m stretching the truth about the economic benefits of the Upper Mississippi River Restoration program. For only $400 million, we are getting well over $1 billion annually in ecosystem service benefits, hundreds of union-wage construction jobs, and probably tens of millions (to date) infused directly into small businesses to support construction and eco-based tourism. These are huge benefits, and I’m glad Congress decided in 2014 to maximize funding for the program, which will grow the economic benefits of river restoration even more.

    Photo by Chris Young

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