Taking Nature Into Account in Disaster Assistance

The 2015 National Disaster Resilience Competition sponsored by the U.S. Department of Housing and Urban Development (HUD) marked a key change in awarding disaster assistance funds. The $1 billion competition actually required applicants to assess the value of nature and other non-traditional benefits in their proposals. As a leader in cutting-edge benefit-cost analysis and a strong advocate for valuing natural capital, Earth Economics played a key role in supporting 40 finalists and over 200 team members with training and feedback on their proposals. In addition, Earth Economics conducted expanded benefit-cost analyses for three of the winning applicants.  

Capturing a broad range of environmental, social, and economic benefits such as carbon storage, human health, and job creation in benefit-cost analysis requires a shift from traditional economic thinking. For example, nature has historically been omitted from economic accounting, and yet natural capital is the foundation of our economy. Federal agencies like FEMA and HUD now recognize the importance of taking nature into account, and recent policy changes have allowed for the inclusion of environmental benefits in benefit-cost analysis. As David Batker, Executive Director of Earth Economics, puts it, “Benefit-cost analysis that includes nature helps us make smarter investments at federal, state, and local levels. We owe it to ourselves and future generations to use this tool to identify the best, most robust and resilient investments.”

The NDRC program sought to prepare communities that have recently suffered federally-declared disasters to better survive, adapt, and recover from future events – in short, to be more resilient.  HUD solicited highly innovative, integrated proposals that would not only help communities reduce direct losses from future shocks (floods, fires, earthquakes, tornados) but, perhaps more importantly, address long-term stresses that reduce community resilience, such as high unemployment, degraded education, and loss of open space.

Earth Economics was asked by HR&A Advisors, Rockefeller Foundation’s program lead, to support all finalists with training on expanded benefit-cost analysis in a series of Rockefeller Foundation-sponsored Resilience Academies throughout NDRC Phase 2. The training was intended to help participants expand their thinking about project benefits and to identify, quantify, and if possible, put monetary value on these benefits.

Earth Economics also conducted full, holistic benefit-cost analyses for several finalists, leading research and preparation of robust benefit-cost and economic impact analyses.  The proposed projects addressed issues ranging from recurring flood mitigation and disastrous wildfires to innovative ways to support rural communities with jobs and job training.  

In late January 2016, HUD announced the 13 communities that would receive nearly $1 billion in support for resilience projects. Among these winners were the three for which Earth Economics provided full benefit-cost analysis – Louisiana will receive just over $92 million, the City of New Orleans roughly $141 million, and California about $70 million. All projects make use of natural systems in resilience-building:

  • Louisiana’s Isle de Jean Charles Native American community will resettle away from their rapidly-diminishing traditional coastal lands, moving to safety while retaining cultural practices and community identity.
  • New Orleans’ Gentilly neighborhood will restore coastal wetlands and build water-absorbing parks and green streets.
  • Tuolumne County in California will restore the health of its forests and watershed, generate energy, and support the rural community with a multi-purpose community resilience center.

The NDRC was a key step in shifting to more investment in natural infrastructure, and ultimately to getting the most from taxpayers’ money.  During the announcement of the NDRC winners, Harriet Tregoning, Principal Deputy Assistant Secretary for HUD’s Office of Community Planning and Development, remarked “We are learning together about how to encourage a broader range of benefits from every federal dollar that gets expended.”

Photo Credit: NOAA via Flickr