For far too long, nature has either been undervalued or ignored entirely in planning and investment – with profound effects on decision making. When nature is ignored, decisions tend to favor short-term solutions rather than more lasting options that work with nature. But these types of decisions come with consequences - cities are finding themselves without the protections to weather the increasingly frequent and more powerful disasters attributed to climate change. Homes are being rebuilt in floodplains rather than out of the danger zone.

The situation is slowly beginning to change, however. Over the last few years, federal agencies like the Federal Emergency Management Agency (FEMA) and the Department of Housing and Urban Development (HUD) have started to recognize that nature does indeed hold value for people, and that it should play a role in our decision making. That’s why recent policy changes have reflected the importance of ecosystem services - the benefits that people receive from nature.

FEMA was the first federal agency to adopt a major policy change that recognizes ecosystem services in benefit-cost analysis (BCA). Ecosystem services used to be entirely excluded from FEMA’s BCA tool for flood mitigation funding – and that meant nature was out of the picture when it came to deciding where to award funds. But when FEMA collaborated with Earth Economics, the case for incorporating nature into decision making became clear. In June 2013, FEMA announced a landmark policy change that allowed ecosystem services to be included in FEMA’s formal BCA for flood acquisition projects. Now, families who have experienced devastating floods can more easily qualify for FEMA grants to relocate their homes out of harm’s way.

FEMA has not stopped there though. In 2016, Earth Economics’ ongoing collaboration with FEMA helped expand the application of ecosystem services even further. In May, FEMA announced a policy change that makes huge strides in incorporating nature’s value into planning and mitigation funding. FEMA now allows mitigation projects for climate change to be informed by ecosystem service values. The update nearly doubles the number of ecosystem service values in the BCA tool and extends the application of ecosystem services to all FEMA project types (not just flood mitigation). Now flood, drought, and fire mitigation projects include ecosystem services in the BCA tool.

This new policy is a boon for communities in need – restoration projects with costs under $5,250 are automatically considered cost-effective, meaning no BCA is required and support funds can reach communities faster. Most importantly, FEMA now funds restoration projects that mitigate the effects of disasters, such as riparian restoration and reforestation. FEMA is now, for the first time ever, a funding source for restoration with substantial funding allocations dedicated to their programs. Restoration organizations can now collaborate with city, state, tribal, or other communities to apply for FEMA Hazard Mitigation Assistance grants.

Perhaps the most encouraging aspect of these developments is that FEMA is not alone in recognizing nature’s value. HUD’s 2015 National Disaster Resilience Competition also recognized ecosystem services, and even required holistic BCA for all finalists, with Earth Economics providing training in this process as a subject matter expert. In October 2015, the Executive Office of the President issued a memorandum requiring all federal agencies to develop policies to promote consideration of ecosystem services in their decision making.

Exciting changes are afoot when it comes to taking nature into account. As federal agencies shift toward policies that recognize how important nature is to the long-term health and resilience of our communities, we can hope that decisions and investments will also start to reflect nature’s value and its critical role in our well-being.

Banner Photo Credit: U.S. Fish and Wildlife Service Northeast Region via Flickr


Interested in learning the ins and outs of the latest FEMA policy change? Zachary Christin, Project Director at Earth Economics, is offering a webinar this Thursday, September 1st – Funding for Floodplain Restoration: Breaking Down Incentives to Develop Floodplains & recent FEMA Policy Updates.  Learn more here.