Pre pare d by Earth Econom icsPaula Sw e d e e n and Jam e s Pittm an

A n Ecological

Econom ic

As s e s sm e nt of

K ing County 's

Flood H azard

M anage m e nt

Plan

For K ing County D e partm e nt of

Natural Re source s and Park s, Rive r,and Floodplain M anage m e nt

ProgramAugust 10, 2007

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Table of Contents Tables ..................................................................................................................................................................... 2 Figures.................................................................................................................................................................... 2 Acknowledgements ............................................................................................................................................... 2 Part 1: Background and Theory.......................................................................................................................... 3

Introduction....................................................................................................................................................... 3 Natural Capital and Ecological Services ....................................................................................................... 3

Valuation of Ecosystem Services Background ............................................................................................... 8 Valuation Techniques...................................................................................................................................... 9

What a Full Valuation for King County’s Flood Protection Programs Would Entail............................. 12 Value Transfer Approach.............................................................................................................................. 12

Avoided Cost of Flood Protection Service .................................................................................................... 15 A Note on Ecological and Natural Resource Economics ............................................................................. 15

Part 2: Qualitative and Quantitative Analysis of Ecosystem Services: A Case Study of Six Projects from the Cedar River Flood Hazard Management Plan .......................................................................................... 16

Introduction..................................................................................................................................................... 16 Description of Economic Analysis Methods ................................................................................................. 17 Characterization of Flood Hazard Reduction Projects ............................................................................... 17

1. Lower Jones Road Setback Project (River Miles 5.5 – 6.2, right bank) ...................................... 18 2. Rainbow Bend Levee Setback and Floodplain Reconnection (River Miles 11.3 – 11.5, right bank); Cedar Grove Mobile Home Park Acquisition Project (River Miles 10.75 – 11.10, right bank)......................................................................................................................................................... 18 3. Rhode Levee Setback and Home Buyouts (River Miles 13.75 – 14.05, left bank) ; Getchman Levee Setback and Floodplain Reconnection (River Miles 13.75 – 14.05, right bank) .................... 19 4. Herzman Levee Setback and Floodplain Reconnection Project (River Miles 6.5 – 76.7, right bank)......................................................................................................................................................... 20 5. Cedar Rapids Floodplain Reconnection Project (River Mile 7.3 – 7.75, both banks) ................ 21 6. Jan Road – Rutledge Johnson Levee Setback Project (River Miles 13.15 – 13.45, both banks)22

Qualitative Analysis of Projected Changes in Ecosystem Services ............................................................ 23 Regulation Function Ecosystem Services ..................................................................................................... 23 Habitat Function Ecosystem Services........................................................................................................... 25 Provisioning Ecosystem Services.................................................................................................................. 25 Information Function Ecosystem Services.................................................................................................... 26

Quantitative Monetary Valuation Results.................................................................................................... 26 Avoided Cost Model ...................................................................................................................................... 33

Discussion......................................................................................................................................................... 38 Interpretation ................................................................................................................................................ 38 Natural Capital Values and Discounting...................................................................................................... 39 Conclusions................................................................................................................................................... 40

General Literature Cited.................................................................................................................................... 41 Studies Used in Benefit-Transfer Analysis ....................................................................................................... 43

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Tables Table 1. Ecosystem Services................................................................................................................................... 5 Table 2. Ecosystem Types Found within King County Floodplains and the Services They Deliver..................... 7 Table 3. Valuation Methodologies.......................................................................................................................... 9 Table 4. Appropriateness of Valuation Methodologies for Ecosystem Service Type.......................................... 10 Table 5. Value-Transfer Data Source Typology................................................................................................... 13 Table 6. Per Acre Values of Ecosystem Services by Cover Type (in 2006 dollars per acre per year)................. 27 Table 7. Ecosystem Service Values Before Project Implementation ................................................................... 28 Table 8. Ecosystem Service Values After Project Implementation...................................................................... 30 Table 9. Net Change in Ecosystem Service Values After Project Implementation.............................................. 32 Table 10. Avoided Costs to Residential Structures .............................................................................................. 34 Table 11. Avoided Costs from Reduced Need for Repairs to Flood Control Structures...................................... 35 Table 12. Total Net Benefit of Ecosystem Services from Six Flood Hazard Reduction Projects........................ 36 Table 13. Total Estimated Value of Ecosystem Service Flows from the Six Project Sites .................................. 37 Table 14. Present Value of Ecosystem Service Benefits for 250 Years (million of 2006 dollars)....................... 38

Figures

Figure 1. Relationship among Ecosystems, Services, and Valuation Approaches............................................... 11

Acknowledgements This projected was funded by a grant from the Washington State Department of Ecology. Earth Economics would also like to acknowledge the expertise and enthusiasm of King County staff members Jennifer Knauer and Nancy Faegenburg. This project would not have been possible without their leadership, and the final product was much improved through their comments. Any remaining errors are the responsibility of the authors.

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Part 1: Background and Theory Introduction In April 2006, King County adopted a new flood management plan covering the entire county. Among the guiding principles of this plan are that (1) flooding is a natural process that shapes ecological systems and (2) that natural flood control practices that restore the ability of rivers and floodplains to absorb water and energy from storms are less costly and more effective in the long-run than working against natural river dynamics. The County's plan includes many projects designed to reduce damages to public infrastructure and private property by use of measures that restore natural floodplain functions. This report examines the value of ecological services that result when floodplain and river ecosystems are restored as a means of flood damage prevention. The first part of the report contains background information on an ecological economics approach to analyzing the benefits of flood protection programs, a general discussion of ecosystem services that occur in King County floodplains, and the techniques used to determine their economic value. This sets up a case study, reported in Part 2 of this document, which analyzes the changes in value that would likely result from implementation of specific flood protection measures on six projects proposed for implementation in the Cedar River Watershed. Natural Capital and Ecological Services From a traditional economic perspective, benefits associated with the natural environment were often described in terms of “natural resources,” including both non-living resources, such as mineral deposits, and living resources, such as timber, fertile soil, fish, etc. The emphasis in this way of looking at things is on objects of value that can be extracted from the environment for direct use by human beings. In general, the inanimate or abiotic resources are non-renewable, i.e., they are potentially exhaustible, although exploration may uncover new sources and technological development may create substitutes. Animate or biotic resources, on the other hand, are potentially renewable if they are not harvested too rapidly and if other factors (e.g., climate, absence of disease, etc.) are favorable to their renewal. There was little emphasis on looking at how extraction of renewable resources affected larger ecosystem dynamics.

A different way of looking at environmental benefits has been gaining favor over the last several decades among scientists and economists. In this natural capital or ecosystem services framework, the natural environment is viewed as a capital asset, i.e., an asset that provides a flow of benefits over an extended period. While inanimate or abiotic resources are not ignored, the emphasis is on the benefits provided by the living environment, usually viewed in terms of whole ecosystems. Ecosystems are defined as all the interacting abiotic and biotic elements of an area of land or water. Ecosystem functions are the processes that transform matter and energy in ecosystems. Ecosystem goods and services are the benefits that humans derive (directly and indirectly) from naturally functioning ecological systems (Costanza et al., 1997; Daily 1997; De Groot et al., 2002; Wilson, Troy and Costanza, 2005). The recently released “Millennium Ecosystem Assessment” represents the work of over 1300 scientists worldwide, who spent over four years focused on the concept of ecosystem services and their contribution to human well-being (www.millenniumassessment.org/en/index. aspx). This report describes in detail how ecosystem functions can and have been altered and degraded by human use and how changes in ecosystem structure and function lead to lower levels of ecosystem service delivery and weakened natural capital stocks. Natural capital is the infrastructure that nature provides to support human well-being and economic activity. In the context of this report, natural capital includes naturally functioning floodplains, riparian vegetation, streams and the aquatic life within them, and the upland forests and agricultural land within the floodplain boundary. Other ecosystems within the watersheds of the rivers of King County that influence the floodplain are also natural capital. It includes the services provided by native plants and animals, the topography, geology, nutrient and water flows, and natural processes provided by nature that yield a valuable, regular return of benefits.

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In a natural system, interactions between the components often make the whole greater than the sum of its individual parts—each of the physical and biological components of watersheds, if they existed separately, would not be capable of generating the same goods and services provided by the processes and functions of an intact watershed system (EPA, 2004). Similarly, a heart or lungs cannot function outside a human body. Good human health requires the organs to work together. Ecosystem services are provided by systems of enormous complexity. Individual services influence and interact with each other, often in nonlinear ways (Limburg et al., 2002). Resilience implies the potential of a system to return to a previous state after disturbance. A system is assumed to be fragile when resilience is low. Fragile systems tend to be replaced with alternative systems after disturbance. These alternative systems often produce reduced amounts of ecosystem services and are consequently of lesser value (Gunderson and Holling, 2002). Ecosystems may be resilient or fragile systems. While signs might be present when an ecosystem is on the verge of collapse, with the exception of a few well-studied systems (see chapters within Gunderson and Holling, 2002), there is little science available to show the minimum threshold of ecosystem infrastructure necessary to halt a breakdown of services. Likewise, ecosystems have been shown to be quite resilient; in some cases ecosystem health improves when restoration projects are initiated. When ecosystems are healthy, they can provide valuable ecological services for free and in perpetuity. For example, healthy forests slow water runoff and, combined with sufficient floodplains, they protect against flooding. When forest cover is lost and floodplain vegetation and geomorphology is changed through in-filling and bank-hardening, for example, flooding downstream is increased. If natural flood prevention functions (provided for free) are destroyed, then flood damage will exact costs on individuals and communities. Private individuals, firms, and governments will either suffer the costs of flood damage or pay for engineered substitutes like levees and more storm water infrastructure to compensate for the loss of ecosystem flood prevention previously provided for free by specific geo-morphological conditions and healthy ecosystems. Without healthy ecosystems, taxpayers, businesses, and governments incur damage or costs to repair or replace these ecosystem services. In addition, flood protection measures such as those undertaken by King County restore healthy ecosystems that provide other economic benefits such as salmon habitat restoration and improved recreational opportunities. Ecosystem services are often taken for granted, and as a result are largely non-market services that have not, until recently, been recognized for their local and global significance (Costanza et al., 1997 and Daily, 1997). Work on the identification, classification and valuation of ecological services is ongoing (De Groot et al., 2002, Wilson et al. 2006). The sophistication and applicability of ecosystem service valuation is also rapidly expanding (Farber et al., 2002, 2006). The following tables define and describe ecosystem services that exist in the floodplain areas of King County (Table 1) and link particular ecosystem services with ecosystem types (Table 2). Not all ecosystems provide all ecosystem services.

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Table 1. Ecosystem Services

Functions Ecosystem Infrastructure and Processes Goods and Services (examples)

Regulation Functions Maintenance of essential ecological processes and life support systems 1 Gas regulation Role of ecosystems in bio-

geochemical cycles

Provides clean, breathable air, disease prevention, and a habitable planet

2 Climate regulation

Influence of land cover and biologically mediated processes on climate

Maintenance of a favorable climate promotes human health, crop productivity, recreation, and other services

3 Disturbance prevention

Influence of ecosystem structure on dampening environmental disturbances

Prevents and mitigates natural hazards and natural events, generally associated with storms and other severe weather

4 Water regulation Role of land cover in regulating runoff and river discharge

Provides natural irrigation, drainage, channel flow regulation, and navigable transportation

5 Water supply Filtering, retention and storage of fresh water (e.g. in aquifers and snow pack)

Provision of water for consumptive use, includes both quality and quantity

6 Soil retention Role of vegetation root matrix and soil biota in soil retention

Maintains arable land and prevents damage from erosion, and promotes agricultural productivity

7 Soil formation Weathering of rock, accumulation of organic matter

Promotes agricultural productivity, and the integrity of natural ecosystems

8 Nutrient regulation

Role of biota in storage and re-cycling of nutrients

Promotes healthy and productive soils and gas, climate, and water regulations

9 Waste treatment Role of vegetation and biota in removal or breakdown of xenic nutrients and compounds

Pollution control/ detoxification and filtering of dust particles through canopy services

10 Pollination Role of biota in movement of floral gametes

Pollination of wild plant species and harvested crops

11 Biological control

Population control through trophic-dynamic relations

Provides pest and disease control and reduces crop damage

Habitat Functions Providing habitat (suitable living space) for wild plant and animal species

12 Refugium function

Suitable living space for wild plants and animals

Maintenance of biological and genetic abundance and diversity (and thus the basis for most other functions)

13 Nursery function Suitable reproduction habitat

Maintenance of commercially harvested species

Production Functions Provision of Natural Resources

14 Food Conversion of solar energy into edible plants and animals

Hunting, gathering of fish, game, fruits, etc. and small scale subsistence farming and aquaculture

15 Raw materials Conversion of solar energy into biomass for human construction and other uses

Building and manufacturing, fuel and energy; and fodder and fertilizer

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16 Genetic resources Genetic material and evolution in wild plants and animals

Improve crop resistance to pathogens and pests

17 Medicinal resources

Variety in (bio)chemical substances in, and other medicinal uses of, natural biota

Drugs, pharmaceuticals, chemical models, tools, test and assay organisms

18 Ornamental resources

Variety of biota in natural ecosystems with (potential) ornamental use

Resources for fashion, handicraft, jewelry, pets, worship, decoration, and souvenirs

Information and Cultural Functions Providing opportunities for cognitive and spiritual development

19 Aesthetic information

Attractive landscape features

Enjoyment of scenery

20 Recreation Variety in landscapes with (potential) recreational uses

Travel to natural ecosystems for eco-tourism, outdoor sports, etc.

21 Cultural and artistic information

Variety in natural features with cultural and artistic value

Use of nature as motive in books, film, painting, folklore, national symbols, architecture, advertising, etc.

22 Spiritual and historic information

Variety in natural features with spiritual and historic value

Use of nature for religious or historic purposes (i.e., heritage value of natural ecosystems and features)

23 Science and education

Variety in nature with scientific and educational value

Use of natural systems for school excursions, etc. Use of nature for scientific research

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Table 2. Ecosystem Types Found within King County Floodplains and the Services They Deliver River Gravel Forested Side-

channel Shrub Side-channel

Riparian Wetland

Riparian Forest

Riparian Shrub/grass

Gas regulation X X X X X X Climate regulation

X X X X X X

Disturbance prevention

X X X X X X X

Water regulation X X X X X X X Water supply X X X X X X Soil retention X X X X Soil formation X X X X Nutrient regulation

X X X X X X

Waste treatment X X X X Pollination X X X X Biological control X X X X Refugium function

X X X X X X X

Nursery function X X X X X X X Food X X X X Raw materials X X Genetic resources X X X X X X Medicinal resources

X X X

Ornamental resources

X X X

Aesthetic X X X X X Recreation X X X X X Cultural and artistic

X X

Spiritual and historic

X X X X X X

Science and education

X X X X X X

It is also important to note that some ecosystems provide higher quality services than others. For example, a riparian forest provides erosion control and water regulation services better than shrub or grass systems that may replace a riparian forest after it is harvested, though shrub and grass also provide those services. And, a single species timber plantation may yield a flow of goods (timber) but it cannot provide the same service fluxes (biodiversity, recreation, and flood protection) as an intact natural forest. Finally, urban green spaces can provide important services to urban residents, but the services are usually of lower quality than the ecosystem that the urban area replaced.

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Valuation of Ecosystem Services Background Our economy and communities reside within the landscape as part of the environment. Many, if not most, decisions are made, however, without accounting for the explicit contribution of functioning ecosystems to economic activity and output. When the contributions of natural capital and the ecosystem services it provides to economic activity are not taken into account, decisions can and have been made that turn out to be very costly to society later on (Daly and Farley 2004). The effects of loss of wetlands in the Mississippi River Delta and subsequent loss of storm buffering capacity provide a stark example. Interest in identifying, describing, and quantifying the economic value of ecosystem services has grown tremendously over the past 20 years, expressly for the purpose of improving environmental decision-making (Daily 1997, Costanza et al., 1997, Balmford et al., 2002). This is particularly relevant for coastal areas given that preliminary estimates of the global economic value of coastal (including large estuaries) and marine ecosystems demonstrated that two-thirds of total ecosystem service value of all systems on earth come from coastal and marine systems (Costanza et al., 1997, Costanza, 1999). This is relevant for river systems in King County given they are part of the Puget Sound Basin, and like other coastal estuary systems (UNEP 2005, Vol. 1, Ch.19), are under high amounts of development and extraction pressures . Deriving economic values for ecosystem services is a complex undertaking. Ecosystem services do not lend themselves to pricing and markets because they lack basic characteristics of private goods. Private property is a pre-condition for the existence of markets. Things that can be both private property and tradable in a market have two main characteristics: they are excludable and rival. Excludability means that people other than the owner/s can be prevented from taking or using a good or service. An excludable good or service has both the physical attributes that make exclusion possible, i.e., it can be contained, fenced, or otherwise restricted, and there is a legal institution that backs up the claim of exclusion. For example, if someone were to find a way around a barrier to use a private good or service without paying for it, they could be fined or jailed. The other characteristic is rivalness. Goods or services are rival when their use precludes someone else from using them. If I am driving my car, you cannot drive my car at the same time. If I drink a glass of water, you cannot drink that same glass of water. These goods are rival. Markets arise for excludable and rival goods and services because people who undertake their production can be more sure of getting their investments back and of making a profit. Ecosystem goods like fish or trees can be excludable and rival while ecosystem services, like the production of climate protection, or flood protection are non-excludable and non-rival. Markets for fish and timber can exist because, for example, once a fish is caught, no one can catch that same fish. Markets for breathable air cannot exist because people cannot be excluded from breathing air, and breathing air is not rival: other people’s breathing does not restrict your access. Ecosystem functions and the services they produce are the result of many interacting factors that operate across large landscapes (storm buffering) or in some cases the whole planet (carbon sequestration). What makes life possible on the planet—the operation of climate; oxygen production; nutrient cycles; water and energy flows; the movements of seeds, pollen, and pollinators; the distribution of different types of plants and soils; and the availability of decomposer organisms such as bacteria and vultures to clean up natural waste products, just to mention a few—are highly interdependent. This interdependence and the scale of operation make excluding people from the benefits of some ecosystems and their services, and thus the ability to privatize and market them, both impractical and undesirable. In addition, the fact that a person’s use of an ecosystem service like storm protection or protection from solar radiation does not reduce the ability of another person to benefit from those services makes them non-rival. Non-rival and non-excludable goods and services are what economists call pure public goods and services. The combination of non-rivalness and non-excludability makes establishing private property rights to ecosystem services impractical; it would be very expensive if not impossible to establish the institutions required to

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exclude people from receiving benefits of these services (Daly and Farley, 2004). Thus, ascribing economic value to ecosystem services that are largely public goods is done to help policy-makers and the public decide how to allocate public funds for the common good and not as a step to privatize public goods (Costanza, 2006). Valuation techniques Ecosystem goods and services may be divided into two general categories: marketed and non-marketed. Measuring market values simply requires monitoring market data for observable trades. The production of goods can be measured by the physical quantity produced by an ecosystem over time, such as, the volume of water production per second, the board feet of timber production in a 40-year rotation, or the weight of fish harvested each year. The current production of goods can be easily valued by multiplying the quantity produced by the current market price. This production creates a flow of ecosystem goods that have a market-defined economic value over time. Non-market values of goods and services are much more difficult to measure. When there are no explicit markets for services, more indirect means of assessing values must be used. A spectrum of valuation techniques commonly used to establish values when market values do not exist are identified in Table 3. The appropriateness of each technique for different types of services is described and summarized in Table 4. Table 3. Valuation Methodologies

Avoided Cost (AC): services allow society to avoid costs that would have been incurred in the absence of those services; storm protection provided by barrier islands avoids property damages along the coast. Replacement Cost (RC): services could be replaced with man-made systems; nutrient cycling waste treatment provided by wetlands can be replaced with costly constructed treatment systems. Factor Income (FI): services provide for the enhancement of incomes; water quality improvements increase commercial fisheries catch and incomes of fisherpeople. Travel Cost (TC): service demand may require travel, the cost of which can reflect the implied value of the service; recreation areas attract distant visitors whose value placed on that area must be at least what they were willing to pay to travel to it, including the imputed value of their time. Hedonic Pricing (HP): service demand may be reflected in the prices people will pay for associated goods: for example, housing prices along the coastline tend to exceed the prices of inland homes. Marginal Product Estimation (MP): Service demand is generated in a dynamic modeling environment using a production function (i.e., Cobb-Douglas) to estimate the change in the value of outputs in response to a change in material inputs. Contingent Valuation (CV): service demand may be elicited by posing hypothetical scenarios that involve some valuation of alternatives; i.e., people generally state that they would be willing to pay for increased preservation of beaches and shoreline. Group Valuation (GV): This approach is based on principles of deliberative democracy and the assumption that public decision making should result not from the aggregation of separately measured individual preferences but from open public debate.

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Table 4. Appropriateness of Valuation Methodologies for Ecosystem Service Type1

Ecosystem Service Amenability to Economic Valuation

Most Appropriate Method for Valuation2

Transferability Across Sites

Gas regulation Medium CV, AC, RC High Climate regulation Low CV, AC, RC High Disturbance regulation High AC Medium Biological regulation Medium AC, P High Water regulation High M, AC, RC, H, P, CV Medium Soil retention Medium AC, RC, H Medium Waste regulation High RC, AC, CV Medium to high Nutrient regulation Medium AC, RC, CV Medium Water supply High AC, RC, M, TC Medium Food High M, P High Raw materials High M, P High Genetic resources Low M, AC Low Medicinal resources High AC, RC, P High Ornamental resources High AC, RC, H Medium Recreation High TC, CV, ranking Low Aesthetics High H, TC, CV, ranking Low Science and education Low Ranking High Spiritual and historic Low CV, ranking Low

As the descriptions in Tables 3 and 4 suggest, each valuation methodology has its own strengths and limitations, often limiting its use to a select range of ecosystem goods and services within a given landscape. For example, the value generated by a naturally functioning ecological system in the treatment of wastewater can be estimated using the Replacement Cost (RC) method, which is based on the price of the cheapest alternative way of obtaining that service, i.e. the cost of chemical or mechanical alternatives. A related method, Avoided Cost (AC), can be used to estimate value based on the cost of damages due to lost services. This method will be used to value the ecosystem services provided by use of flood protection measures that restore natural functions within the floodplain. Travel Cost (TC) and Contingent Valuation (CV) surveys are useful for estimating recreation values, while Hedonic Pricing (HP) is used for estimating property values associated with aesthetic qualities of natural ecosystems. Contingent valuation surveys and conjoint analysis can be used to measure existence value of ecosystems and charismatic animals. Marginal Product Estimation (MP) has generally been used in a dynamic modeling context and represents a helpful way to examine how ecosystem service values change over time. Finally, group valuation (GV) is a more recent addition to the valuation literature and addresses the need to measure social values directly in a group context. In many applications, the full suite of ecosystem valuation techniques will be required to account for the economic value of goods and services provided by a natural landscape. Another important point to note from Table 4 is that not all ecosystem services are readily valued and some services have not been adequately studied to derive credible estimates of value. Very important services such as 1 This table is adapted from Farber et al. 2006. Some changes have been to the original in terms of our opinion of the appropriateness of some techniques for some services that differ from the original authors. 2 Abbreviations in this column mean the following: AC = avoided cost; CV = contingent valuation; H = hedonic pricing; M = market pricing; P = production approach; RC = replacement cost; TC = travel cost

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climate regulation, genetic resources, and spiritual and historical significance have low valuation amenability. In addition, nutrient cycling as a basic supporting service usually receives relatively low values even though life on the planet would not be possible without it (UNEP 2005, Vol. 1, Chapter 12). The following figure summarizes the relationships among ecosystem structure, process, ecosystem goods and services, and valuation techniques. Figure 1. Relationship among Ecosystems, Services, and Valuation Approaches

River and Floodplain Functions, Ecosystem Goods and Services, and ValuationSTRUCTURESTRUCTURE PROCESSESPROCESSES

GOODSGOODS SERVICESSERVICES

DIRECT USEDIRECT USE INDIRECT USEINDIRECT USE NON USENON USE

TOTAL ECONOMIC VALUETOTAL ECONOMIC VALUE

Ecological-Economics Interface

Floodplain and River Goods and Services

Biomass, water supply, Minerals, land/water patterns,Substrate and channel morphology , distribution Etc.

Primary production, organic Matter decomposition, nitrogen and phosphorous cycling, vegetation and down wood role in habitat, pool formation, bank stabilization, etc.

Fisheries, clean water, wood, land reclamation, trade medium (navigation), Etc.

Storm water absorption, nutrient cycling and waste disposal, wildlife habitat, carbon sequestration, Aesthetic scenery Etc.

Market analysis, Avoided Cost, Hedonic Pricing, Travel Costs, Factor Income, Replacement cost, Contingent Valuation

Hedonic Pricing, Travel Cost, Replacement Costs, Avoided Cost, Contingent Valuation, Group Valuation

Contingent Valuation, Group Valuation

= total value of = total value of riverineriverine/floodplain ecosystem/floodplain ecosystem

Figure 1 depicts how the total value of a given landscape might be estimated by linking different ecosystem structures and processes with the output of specific goods and services, which can then be assigned monetary values using the range of valuation techniques described above. Key linkages are made between the diverse structures and processes associated with the landscape and habitat features that created them and the goods and services that result. Once delineated, values for these goods and services can then be assessed by measuring the contribution they make to supporting human welfare. In economic terms, the natural assets of the landscape can thus yield direct (fishing) and indirect (nutrient regulation) use values as well as non-use (preservation) values of the system. Once accounted for, these economic values can then be aggregated to estimate the total value of the landscape (i.e. Total Economic Value or TEV as shown in Figure 1).

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What a Full Valuation for King County’s Flood Protection Programs Would Entail Value Transfer Approach The most accessible and timely approach to conducting an ecosystem service valuation of King County’s flood protection programs would be to conduct a value transfer or benefit transfer study. Value transfer involves the adaptation of existing valuation information or data to new policy contexts.3 In this analysis, the transfer method involves obtaining an economic estimate for the value of non-market services through the analysis of a single study, or group of studies, that have been previously carried out to value similar services. The transfer itself refers to the application of values and other information from the original ‘study site’ to a new ‘policy site’ (Desvouges et al. 1998; Loomis 1992; Smith 1992). The value transfer method is increasingly being used to inform landscape management decisions by public agencies (Downing and Ozuna, 1996; Eade and Moran, 1996; Kirchoff et al., 1997; Smith, 1992). Thus, it is clear that despite acknowledged limitations, such as the context sensitivity of value estimates, existing studies can and do provide a credible basis for policy decisions involving sites other than the study site for which the values were originally estimated. This is particularly true when current net present valuations are either negligible or (implicitly) zero because they have simply been ignored. The critical underlying assumption of the transfer method is that the economic value of ecosystem goods or services at the study site can be inferred with sufficient accuracy from the analysis of existing valuation studies at other sites. Clearly, as the richness, extent, and detail of information increases within the source literature, the accuracy of the value transfer technique will likewise improve (but see Spash and Vatn 2006 for an alternative perspective). With the increasing sophistication and number of empirical economic valuation studies in the peer-reviewed literature, value transfer has become a practical way to inform decisions when primary data collection is not feasible due to budget and time constraints or when expected payoffs are small (Kreuter et al., 2001; Moran 1999). As such, the transfer method is a very important tool for policy makers since it can be used to reliably estimate the economic values associated with a particular landscape, based on existing research, for considerably less time and expense than a new primary study. The raw data for a value transfer exercise would come from previously conducted empirical studies that measured the economic value of ecosystem services. Studies would be reviewed by a research team and the results analyzed for value transfer to the riverine, riparian, and floodplain environments of the Pacific Northwest. Any studies that have occurred in these habitat types in Washington would be prioritized for inclusion in the value transfer exercise. The original results would be entered into a relational database format, then each dollar value estimate could be identified with unique searchable criteria (i.e., type of study, author, location, etc.), thus allowing the team to associate specific dollar estimates with specific conditions on the ground. For example, all aquatic and river-related value estimates would be chosen to come from economic studies that were originally conducted in temperate forests and aquatic/riverine systems similar to those in Washington and the Pacific Northwest. To achieve this, once analyzed, the valuation data would be integrated with land and water cover data and habitat types for King County. Tables and maps would then be generated from this fusion of economic and geographic information. The research team would develop a set of decision rules for selecting empirical studies from the literature that allowed us to estimate the economic value of ecosystem services in the floodplain and freshwater aquatic

3 Following Desvouges et al. (1998), we adopt the term ‘value transfer’ instead of the more commonly used term ‘benefit transfer’ to reflect the fact that the transfer method is not restricted to economic benefits, but can also be extended to include the analysis of potential economic costs, as well as value functions themselves.

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habitats in King County. The research team would review the best available economic literature and select valuation studies which were:

• Focused on riverine, riparian, and floodplain environments in Washington and the Pacific Northwest

• Focused on riverine, riparian, and floodplain environments similar to those in the Pacific Northwest of North America

• Focused primarily on non-consumptive use

• Consumptive use of provisioning goods would be added separately, given that this data is readily available

The quality of original studies used in a value transfer exercise always determines the overall quality and scope of the final value estimate (Brouwer, 2000). From past work, three general categories of valuation research, each with its own strengths and weaknesses, have been identified (Table 5). Type A studies are peer-reviewed empirical analyses that use conventional environmental economic techniques (i.e., Travel Cost, Hedonic Pricing, and Contingent Valuation) to elicit individual consumer preferences for environmental services. Type B studies are commonly referred to as the “grey literature” and generally represent non peer-reviewed analyses such as technical reports, PhD dissertations, and government documents using conventional environmental economic techniques that also focus on individual consumer preferences. Type C studies represent secondary, summary studies such as statistical meta-analyses of primary valuation literature that include both conventional environmental economic techniques as well as non-conventional techniques (energy analyses, marginal product estimation) to generate synthesis estimates of ecosystem service values. Table 5. Value-Transfer Data Source Typology

Type A

Type B

Type C

• Peer-Reviewed

Journal Article or Book Chapter

• Uses Conventional

Environmental Economic Valuation Methods

• Restricted to

Conventional, Preference-based Values

• Non Peer-Reviewed

(PhD Thesis, Raw Data, Technical Report, etc.)

• Uses Conventional

Environmental Economic Valuation Methods

• Restricted to

Conventional, Preference-based Values

• Secondary (meta)

Analysis of Peer- Reviewed and Non Peer-Reviewed studies

• Uses Both

Conventional and Non-Conventional Valuation methods

• Includes conventional

Preference-based, Non-Conventional Preference-based, and Non-Preference-based Values

The research team would then use two alternative approaches to capture possible variation in results across the different literature types: (1) they would first limit the value transfer analysis to peer-reviewed studies that use

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conventional environmental economic methods (hereafter Type A studies) and (2) they would then add a few additional Type B studies and Type C meta-analyses of ecosystem service values that were readily accessible (hereafter Type A-C). Results would be presented separately for Type A and Type A-C categories to generate a more complete picture of the full range of ecosystem service values associated with the floodplain habitats in King County. The geographic landscape for a full ecosystem service valuation could just be the floodplain and aquatic ecosystems or it could also be expanded to include all land cover types in the upland parts of the watershed that affect flood and river conditions in the county, including upland forest, agricultural land, and urban areas. Satellite imagery mapped into Geographic Information Systems (GIS) provides a powerful tool for understanding and using large amounts of geographic data with the full range of land uses and vegetation types as well as other aspects of the landscape. Specific ecosystems and their services that are affected by King County’s flood programs would be identified. The change in ecosystem type would be translated into changes in acreages of land cover, for example acres of restored channel habitat or riparian area. The increased amount of habitat area would then translate into increased delivery of services from those cover types by virtue of the fact that there would be more acres as a result of a restoration activity. Removal of structures from a buy-back program would also show up in calculations of avoided cost (see below). So for example, removing houses from a former riparian area would allow the reclamation of riparian habitat, but also remove a source of chronic insurance claims. The total ecosystem service value (ESV) of a given land use/land cover type for a given unit of analysis

(i.e., watershed or floodplain) would be determined by adding up the individual ecosystem service values associated with each land use/land cover type. The following formula is used for this calculation (from Costanza et al., 2007):

V(ESVi) =

Where:

A(LUi) = Area of Land cover or ecosystem type (i) V(ESVi) = Annual value of Ecosystem Services (k) for each Land Use (i).

Total ESV flow estimates for each land cover category would then be estimated by taking the product of total average per acre service value and the area of each land cover type in the coastal area of the state. This procedure would be repeated for low and high values reported in the literature in order to give a full picture of the range of estimates that exist, and thus an assessment of the lack of precision that still exists in this field.

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A study using this overall method could produce the following outputs:

1. Tables synthesizing the results of all of the primary studies on the value of each ecosystem type and ecosystem service flow included in the study;

2. Tables compiling the value of ecosystem service flows for all King County ecosystems (or just those within the floodplain);

3. Maps of the current value of ecosystem service flows in floodplains of King County based on these estimates;

4. An analysis of the effects on ecosystem service values of using flood mitigation techniques that rely on natural floodplain processes.

5. The results of converting annual flows of ecosystem service values to estimates of the value of the stock of natural capital affected by King County’s flood management program.

Avoided Cost of Flood Protection Service The case study in the second part of this report involves conducting a value-transfer analysis of all ecosystem services except flood protection for six projects within the Cedar River Watershed. An original empirical estimate of the value of flood protection measures for flood protection itself will be conducted for these projects. There is a straightforward technique used to derive the economic value of flood prevention called avoided cost (see Tables 3 and 4 above). In this approach, data is collected on as many of the following flood-related costs as possible: damages to homes, lost labor, insurance payouts, alternative housing, flood warnings, emergency response expenses, emergency repairs, and repair to public infrastructure. An estimate is then made as to how much less frequent and severe damage from flood events will be after proposed flood prevention measures, such as home buybacks and levee setbacks are taken. The costs avoided per flood event will then be summed over the expected number of flood events that would cause damage over a 100-year period, and then those cost savings will be discounted using an appropriate discount rate or range of rates over 100 years. The values derived using this method will be combined with the value-transfer data to get a full picture of all the ecosystem services gained by restoring floodplain habitats and functions. The avoided costs results will also be discussed separately in order to show the direct flood prevention benefits. A Note on Ecological and Natural Resource Economics The valuation techniques for ecosystem services are all products of work in traditional natural resource and environmental economics. However, the manner in which the results are used sometimes differs between traditional and ecological economics due to different ways in which basic issues are conceptualized. An ecological economics approach differs from a more traditional natural resource economics approach in the following ways: by taking into account the dynamics of ecological systems and the overall scale of the economy with respect to the scale and capabilities of the biosphere; by conceptualizing natural systems as essential to human well-being and economic sustainability; and by recognizing that maintaining natural systems as essential underpinning to human well-being and input to economic activity is at least more cost-effective than engineering human substitutes and, in many important respects, may be the only alternative (i.e., natural capital is irreplaceable). It should also be noted that within the field of ecological economics, there is important dialogue about the proper role of economic valuation of ecosystem services in relation to fundamental philosophical approaches and social policy (Martinez-Alier et al., 1998, Spash and Vatn, 2006). That being said, it should be noted that there is increasing scholarly dialogue between the fields of natural resource economics and ecological economics and the differences are in some ways decreasing (Turner, 2002).

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Part 2: Qualitative and Quantitative Analysis of Ecosystem Services: A Case Study of Six

Projects from the Cedar River Flood Hazard Management Plan Introduction Ecosystems provide a variety of economically valuable services such as flood protection, refuge for salmon spawning, climate regulation, and aesthetic and recreational use, as well as a host of other benefits that are valuable and essential to the quality of life, economic prosperity, and natural beauty of our region. When these ecosystem services are lost, it is at great expense that we replace only one or two of these services with human-built capital. Part 1 of this report contains detailed descriptions of ecosystem services as a concept from the science of ecological economics, methods of scientific analysis used for the economic valuation of these ecosystem services, as well as other foundational information useful to readers who are new to the concepts and applied methods. These principles are demonstrated for the King County Flood Hazard Management Plan by evaluating flood hazard management projects at six different sites within the Cedar River Watershed for both quantitative valuation and qualitative characterization of ecosystem services that would result. This analysis has been applied as a comparison of the existing state to a set of presumptive estimates of post-project characteristics and dynamics of the associated ecosystems as generated in consultation with King County staff. The King County Flood Hazard Management Plan is focused most directly on a few ecosystem service improvements: water regulation and disturbance prevention, specifically in the provision of flood protection. This focus creates an explicit need for generating data on the damage risks imposed by foregoing flood hazard management projects, as discussed below in the detailed description of research and analytical methods used for this report. Additional commonly cited ecosystem services improved by projects that improve natural floodplain functions in the riparian corridors of the Pacific Northwest region is the refugium and nursery functions (see Table 1 in Part 1 for definitions and more in-depth discussion below), which provide habitat for salmon spawning and rearing. Less obvious but also significant are the broad spectrum of additional direct and indirect ecosystem services that will be improved by implementation of the King County Flood Hazard Management Plan. Using the best possible quantitative valuation and qualitative characterization of changes to these ecosystem services, this report highlights and defines these clearly valuable ecosystem service improvements and benefits. The majority of the benefits from ecosystem services are commonly overlooked because they are things we take for granted, which results in an underestimation of the benefits of flood hazard mitigation and floodplain restoration projects. The results of this report describe per acre and total values of ecosystem services that result from implementation of a set of projects within one watershed, the Cedar River in King County selected as a case-study. The projects include home buyouts, levee setbacks, and bank stabilization features. The valuation numbers are intended to give the reader a good idea of what ecosystem service values can be gained with these strategies for flood hazard reduction in other watersheds in the county. We would not recommend a strict extrapolation given that site-specific characteristics were analyzed in order to derive the value estimates. However, the results do demonstrate that a variety of ecosystem services are enhanced through projects that reconnect rivers with their floodplains and that these services have substantial monetary value. The reader should also remember that our reported values are likely underestimates because the economic value of several ecosystem services have not been calculated anywhere and thus could not be applied to this study and because only limited data was available to estimate the cost of flood response and recovery—costs that are minimized or avoided when flood hazards are reduced. Thus, the results of this report should be seen as a minimum estimate of the value of ecosystem services for the six projects described and as a qualitative indicator of the fact that there is the potential for much value to be gained by implementing flood hazard reduction

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projects that simultaneously restore natural floodplain functions and key ecological processes in river systems in King County, and likely state-wide. Description of Economic Analysis Methods An overview of the general methods used to value ecosystem services are described in Part 1 of this report, above. In the case of this analysis, two methods were used for these projections: a “benefit-transfer” ecosystem service valuation method, using a synthesis of studies from literature generated in many disparate geographic areas and an “avoided cost” method that used empirical data specific to the six projects in the Cedar River. Both provide a scientifically rigorous approach for estimating the effect that proposed policies and projects are likely to have on ecosystem services and the economic value of their benefits over time. This two-pronged analytical approach allows for a more complete and accurate understanding of benefit and value received directly by various stakeholders. More importantly, the methods used fill a critical gap in defining benefits and values not directly evident in a strictly market-based analysis of natural resource management effectiveness. Valuation databases were queried to find relevant data on characteristics of vegetative cover that were similar between those study sites where primary research was conducted and those sites outlined in the King County Flood Hazard Management Plan. This approach to ecosystem service valuation analysis conforms to economic science methods of benefits transfer. The data was then applied to both existing conditions and projected changes in vegetative cover and ecosystem dynamics over time. Avoided cost valuation methods used in this analysis of the 2006 King County Flood Hazard Management Plan (hereafter referred to as the FHMP) provided a means to add locally specific data. Projects proposed in the FHMP are intended to reduce the need for repair of flood damage impacts to residential neighborhoods and infrastructure, reduce the need for emergency response and alternative housing, and reduce the number of disrupted or lost work days. This results in costs that are avoided through the implementation of the flood hazard management plan. Aggregated data drawn from existing ecosystem service valuation databases provides insufficient detail for understanding the site-specific dynamics of these avoided costs. Site-specific data were provided by King County representatives; anecdotal flood histories for local residences and county-maintained facilities; and individual parcel data, including building elevation and area data from (a) King County Assessor’s Office, (b) appraisal analysis of mobile home parks in the area, and (c) water surface elevation and flows for 10-, 50-, and 100-year flood events. Calculation of avoided cost values for residential damages were generated using Federal Emergency Management Agency (FEMA) software, specifically the Riverine Flood Hazard Mitigation model for economic analysis of economic benefits from flood control. Default values provided with the FEMA modeling software were used for estimated building value, replacement cost of building contents, rental cost of temporary building space, and other displacement costs. Characterization of Flood Hazard Reduction Projects This report analyzes six project sites on the Cedar River that are detailed proposed actions in the FHMP. Each of these projects is summarized below with details on site location, current dynamics and risks, proposed flood mitigation strategy, and anticipated changes to ecosystem composition. Quantitative data used as input to the ecological economics model area based on estimates of pre- and post-project conditions for vegetative cover and ecosystem composition and include details on the total area of each project site, area of vegetative coverage for various ecosystem types and the changes in these features that are expected with implementation. Following these project characterizations is a qualitative discussion of projected changes in ecosystem services resulting from the implementation of proposed projects. A map showing the project locations can be found in the Flood Hazard Management Plan (Map 5 – 7) at the following location: http://dnr.metrokc.gov/wlr/flood/fhmp/index.htm.

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1. Lower Jones Road Setback Project (River Miles 5.5 – 6.2, right bank) This project site is located on the right bank of the Cedar River south of Jones Road as well as downstream and across the river northwest of the Cavanaugh Pond Natural Area. A majority of this 9.8 acre site is covered by residential homes and relatively non-vegetated area, approximately a third of the area is covered by riparian forest within disconnected floodplain and a small portion is covered by wetlands habitat. A rock-armored bank is maintained as a flood protection facility to protect the road at Buck’s Curve on the upstream end of the right bank.

Acreage by Vegetative Cover Type - Lower Jones Road Project Vegetative Cover Type Current State Post-mitigation State

Percent Acres Percent Acres non-vegetated 37% 5.4 12% 1.8 Shrub 1% 0.2 0% 0 Wetland 9% 1.3 0% 0 disconnected riparian forest 20% 2.9 0% 0 reconnected floodplain forest 0% 0 48% 7 forested side channel 0% 0 0% 0 gravel bar 0% 0 7% 1 in-stream salmon non-habitat 33% 4.8 0% 0 in-stream salmon spawning habitat 0% 0 33% 4.8 Total 100% 14.6 100% 14.6

The FHMP states that on this site the flood protection facility is prone to scour and erosion that leads to structural damage during high flows. The armoring along this right bank also tends to deflects flood flows directly toward the Cedar River Trail Revetment on the opposite bank, increasing the potential for damages that require costly maintenance to the trail and possibly the Maple Valley Highway (State Route 169). Downstream from this facility are numerous residential homes located right at the top of the bank and that are at risk of being undercut by erosion or flooded by overtopping. The infringement this flood protection facility places in the floodway also impedes flood conveyance from upstream and severely restricts natural floodplain processes and habitat functions within the project area. Risks imposed by the current condition include, but are not limited to, damage to public safety with acute risk potential if there is a sudden levee or bank failure, which would undercut roads or homes; as well as damage to public infrastructure through potential erosion of the Cedar River Trail and State Route 169; potential impacts to the regional economy in a case where State Route 169 is extensively damaged; and also risk of damage to privately owned residential structures. Risks that were not quantified in this study include the potential for acute impacts to public safety if fire and rescue personnel are unable to reach residents as a result of flooding. Proposed actions include setback of this flood protection facility, reduced slope angle on the bank, improved conveyance in the channel, storage in the floodplain, and creation of a buffer to separate the river and the road. Other proposed actions include easement or property acquisition and potentially removal of flood-prone residential properties, and, where structures are removed or setback, restoration of native vegetation in the riparian buffer. These actions will mitigate overall risk by reducing channel confinement, improving conveyance and floodplain function in the project area as well as reducing the erosive force of flood flows directed toward the Cedar River Trail Revetment. A more precise estimate of the extent of changes in ecosystem process and function as a result of this project can only be measured after more detailed design, modeling, and implementation have been completed. 2. Rainbow Bend Levee Setback and Floodplain Reconnection (River Miles 11.3 – 11.5, right bank);

Cedar Grove Mobile Home Park Acquisition Project (River Miles 10.75 – 11.10, right bank) This project site is located on the right bank of the Cedar River across the river and due north of the Cedar Grove Road Natural Area at the intersection of Maple Valley Highway (State Route 169) and Cedar Grove

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Road SE. Approximately half of this 38.9 acre site is covered by riparian forest within disconnected floodplain. More than a third of the area is covered by the Cedar Grove Mobile Home Park, effectively non-vegetated area, and smaller areas of shrub habitat interspersed with the forested southeastern portions of the site habitat. Levees and other flood control facilities are present on both banks: the Rainbow Bend Levee towards the upstream end on the right bank and the Cedar River Trail Revetment extending along the entire length of the left bank.

Acreage by Vegetative Cover Type – Rainbow Bend Project Vegetative Cover Type Current State Post-mitigation State

Percent Acres Percent Acres Non-vegetated 29% 13.6 0% 0 Shrub 12% 5.8 0% 0 Wetland 0% 0% 0 Disconnected riparian forest 41% 19.4 0% 0 Reconnected floodplain forest 0% 0 78% 37 Forested side channel 0% 0 0% 0 Gravel bar 0% 0 4% 1.8 In-stream salmon non-habitat 18% 8.5 0% 0 In-stream salmon spawning habitat 0% 0 18% 8.5 Total 100% 47.3 100% 47.3

The FHMP states that on this site the Rainbow Bend Levee shunts deep, fast flood flows directly into the Cedar River Trail Revetment resulting in severely constricted flows, increases in scour velocities and flood elevations, increased frequency and severity of overtopping and associated flood damage to both flood protection facilities themselves as well as residential homes on the right bank behind and downstream of the levee. The Cedar Grove Mobile Home Park is also located in the floodplain downstream from the Rainbow Bend Levee and is subject to frequent flooding that in larger flood events can be deep and fast. In addition to the damages to homes and property and the risk to life and limb from high velocity flows, residents have suffered failure of septic systems and contamination of drinking water supplies. This levee also impedes flood conveyance and natural processes in floodplain habitats within the project area. In addition to the risks imposed to public safety by the current situation, there is also the risk to public infrastructure through potential erosion of the Cedar River Trail and State Route 169. This would not only create a hazardous situation requiring costly repairs, but could also impact the regional economy if transportation along State Route 169 were disrupted. Risks that were not quantified in this study include the potential for acute impacts to public safety if fire and rescue personnel are unable to reach residents as a result of flooding. Proposed actions include acquisition and removal of flood-prone residential properties and the Cedar Grove Mobile Home Park behind and downstream of the Rainbow Bend Levee and decommissioning of supporting infrastructure (road, utilities, septic systems, wells, etc.), setback or removal of the levee and reconnection of floodplain areas that are currently disconnected by the levee. These actions will mitigate overall risk by eliminating all future flood risks to residents and residences, reducing channel confinement, improving conveyance and floodplain function in the project area as well as reducing the erosive force of flood flows directed towards the Cedar River Trail Revetment. A more precise estimate of the extent of changes in ecosystem process and function as a result of this project can only be measured after more detailed design, modeling, and implementation have been completed. 3. Rhode Levee Setback and Home Buyouts (River Miles 13.75 – 14.05, left bank) ; Getchman Levee

Setback and Floodplain Reconnection (River Miles 13.75 – 14.05, right bank) The Rhode and Getchman levees are located on the left and right banks, respectively, of the Cedar River east of the Maple Valley Highway (State Route 169) and west of Taylor Creek. Approximately half of the 7.3 acre

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proposed project area behind Rhode levee is covered with residential homes and relatively non-vegetated area, a third is covered with riparian forest within disconnected floodplain, and the remaining portion, less than a quarter of the area, is covered with shrub habitat. On the opposite, right bank of the river, behind the Getchman levee, a majority of the 7.1 acre area is covered with riparian forest within disconnected floodplain, a third by relatively non-vegetated land, and a small portion by shrub habitat.

Acreage by Vegetative Cover Type – Rhode-Getchman Project Vegetative Cover Type Current State Post-mitigation State

Percent Acres Percent Acres Non-vegetated 27% 5.1 0% 0 Shrub 12% 2.2 0% 0 Wetland 0% 0.0 0% 0 Disconnected riparian forest 39% 7.2 0% 0 Reconnected floodplain forest 0% 0.0 50% 9.3 Forested side channel 0% 0.0 24% 4.4 Gravel bar 0% 0.0 4% 0.7 In-stream salmon non-habitat 23% 4.2 0% 0 In-stream salmon spawning habitat 0% 0 23% 4.2 Total 100% 18.6 100% 18.6

The FHMP states that on this site the river is severely constricted as a result of these levees, increasing scour velocities and flood elevations, increasing the frequency of overtopping, exacerbating flood damage and risks to both flood protection facilities as well as residential properties on both banks. The Getchman Levee in particular disconnects the river from Taylor Creek and a historic oxbow channel of the Cedar River. These levees also impede flood conveyance and natural processes in floodplain habitats within the project area. The dominant risks in these project sites are to public safety and residential structures and property. Risks that were not quantified in this study include the potential for acute impacts to public safety if fire and rescue personnel are unable to reach residents as a result of flooding. Proposed actions include setback of the Getchman Levee in a manner that reduces damage to the Rhode Levee and maintains protection for Maxwell Road, property acquisition and potentially removal of flood-prone residential properties, setback of Rhode levee, and restoration of native vegetation in the riparian buffer. These actions will mitigate overall risk by reducing channel confinement and improving conveyance and floodplain function in the project area. A more precise estimate of the extent of changes in ecosystem process and function as a result of this project can only be measured after more detailed design, modeling, and implementation have been completed. 4. Herzman Levee Setback and Floodplain Reconnection Project (River Miles 6.5 – 76.7, right bank) This project site is located on the right bank of the Cedar River opposite the Cavanaugh Pond Natural Area. The vast majority of the 8.5 acre site is covered by riparian forest within disconnected floodplain, with a small portion of the upstream area being covered by shrub habitat. Levees are present on both banks: the Herzman Levee upstream on the right bank and the Cedar River Trail Levee downstream on the left bank.

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Acreage by Vegetative Cover Type – Herzman Project Vegetative Cover Type Current State Post-mitigation State

Percent Acres Percent Acres Non-vegetated 0% 0 0% 0 Shrub 6% 0.9 0% 0 Wetland 0% 0 0% 0 Disconnected riparian forest 58% 7.7 0% 0 Reconnected floodplain forest 0% 0 58% 7.65 Forested side channel 0% 0 0% 0 Gravel bar 0% 0 6% 0.85 In-stream salmon non-habitat 36% 4.8 0% 0 In-stream salmon spawning habitat 0% 0 36% 4.8 Total 100% 13.3 100% 13.3

The FHMP states that on this site the Herzman Levee provides protection against channel migration on an outside bend of the river in front of Jones Road and a single private driveway. It is an over-steepened structure vulnerable to scour and erosion, and unnecessarily constricts the floodway. This constriction increases flood depth and velocity directed at the Cedar River Trail Levee just downstream on the opposite bank. This increases the risk of flood damage to the trail and also State Route 169. This levee also impedes flood conveyance and natural processes in floodplain habitats within the project area. Risks imposed by the current situation include, but are not limited to, damage to public infrastructure through potential erosion of the Cedar River Trail and State Route 169 and potential impacts to the regional economy in the event that State Route 169 is extensively damaged. Proposed actions include removal of approximately 350 linear feet and setback of approximately 190 linear feet of the Herzman Levee, along with plantings of native vegetation. These actions will mitigate flood risk by reducing channel confinement, improving conveyance and floodplain function in the project area as well as reducing the erosive force of flood flows directed toward the Cedar River Trail Levee. The decrease in the velocity of flood flows will also improve habitat conditions by allowing for creation of gravel bars and pool formation instream and side-channels and other backwater areas in the reconnected floodplain. A more precise estimate of the extent of changes in ecosystem process and function as a result of this project can only be measured after more detailed design, modeling, and implementation have been completed. 5. Cedar Rapids Floodplain Reconnection Project (River Mile 7.3 – 7.75, both banks) This project site surrounds an S-curve in the Cedar River that is located north of the Ricardi Reach Natural Area on Maple Valley Highway (State Route 169). One portion of the project site is comprised of 12.2 acres on the southern, left bank. Nearly two thirds of this segment is a connected floodplain covered primarily by riparian forest and containing several existing side-channel features. A smaller downstream segment of the left bank project area is floodplain that is disconnected from the mainstem river by the levee; half this area is covered with upland forest and the remainder with a mix of shrub habitat and non-vegetated land. Across the river, the right bank portion of the project site is comprised of 9.4 acres that is covered mostly with riparian forest, but which is also disconnected floodplain. Amidst this right bank riparian forest, approximately a third of the area is covered with shrub habitat and non-vegetated land as well as an undeveloped road habitat. Levees are present on both banks: the Riverbend Levee on the left bank and the Ricardi Levee on the right bank.

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Acreage by Vegetative Cover Type – Cedar Rapids Project Vegetative Cover Type Current State Post-mitigation State

Percent Acres Percent Acres Non-vegetated 10% 2.7 0% 0 Shrub 9% 2.3 0% 0 Wetland 0% 0.0 0% 0 Disconnected riparian forest 63% 16.7 0% 0 Reconnected floodplain forest 0% 0.0 66% 17.6 Forested side channel 0% 0.0 13% 3.5 Gravel bar 0% 0.0 2% 0.6 In-stream salmon non-habitat 18% 4.8 0% 0 In-stream salmon spawning habitat 0^ 0 18% 4.8 Total 100% 26.5 100% 26.5

The FHMP states that on this site these existing levees constrict the floodway, increase water velocity and depth, and raise the risk of scouring and erosion of the flood protection facilities on both banks as well as generally impeding flood conveyance and natural processes in floodplain habitats. Risks imposed by the current situation include, but are not limited to, issues of damage to public infrastructure and also to privately owned structures downstream of the project site. Proposed actions include acquisition of contiguous land on both banks, setback of existing riprap levees, and restoration of floodplain ecosystems. These actions will mitigate overall risk by reducing reducing flood velocities. The decrease in the velocity of flood flows will also improve habitat conditions by allowing for creation of gravel bars and pool formation instream and side-channels and other backwater areas in the reconnected floodplain. A more precise estimate of the extent of changes in ecosystem process and function as a result of this project can only be measured after more detailed design, modeling, and implementation have been completed. 6. Jan Road – Rutledge Johnson Levee Setback Project (River Miles 13.15 – 13.45, both banks) This project site surrounds a sharp bend in the Cedar River about a mile north of the intersection of Maple Valley Highway (State Route 169) and State Route 18. One portion of project site is comprised of 6.7 acres on the right bank of the river, nearly half of which is covered by riparian forest within the connected floodplain, while the remainder of the area is covered mostly by riparian forest within disconnected floodplain and a small area of shrub habitat. The other portion of this project site consists of 5.9 acres on the left bank of the river, nearly two-thirds of which is covered by riparian forest connected to the floodplain and one-third of which is covered by riparian forest within disconnected floodplain habitat. Levees are present on both banks: the Rutledge-Johnson Levee toward the upstream end on the left bank of the river, and the Jan Road Levee extending along much of the central portion of the right bank.

Acreage by Vegetative Cover Type – Jan Road Project Vegetative Cover Type Current State Post-mitigation State

Percent Acres Percent Acres Non-vegetated 0% 0.0 0% 0 Shrub 5% 1.0 0% 0 Wetland 0% 0.0 0% 0 Disconnected riparian forest 25% 4.8 0% 0 Reconnected floodplain forest 35% 6.8 65% 12.6 Forested side channel 0% 0.0 0% 0 Gravel bar 0% 0.0 0% 0 In-stream salmon non-habitat 35% 6.7 0% 0 In-stream salmon spawning habitat 0% 0 35% 6.7 Total 100% 19.3 100% 19.3

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The FHMP states that the existing levees on this site constrict the floodway, decreasing flood conveyance, increasing water velocity and depth, and raising the risk of scouring and erosion of both banks and levees as well as impeding natural processes in floodplain habitats. Furthermore, the plan highlights relatively severe risks imposed by the river flow being forced directly into the downstream Cedar River Trail Levee and the adjacent State Route 169. Levee repairs at this site are constrained by road proximity and have resulted in an over-steepened flood protection facility with significant vulnerability to future damage. It is noted that the existing levees, proposed for setback and removal in this project, provide protection from smaller to moderate flood events but were never designed to provide protection from larger events such as the 100-year flood. Flooding behind the Jan Road levee, in particular, can be exacerbated by flows from Taylor Creek that joins the Cedar River from the right bank just upstream of this levee. Risks imposed by the current situation include, but are not limited to, damage to public infrastructure through potential erosion of the Cedar River Trail and State Route 169 as well as potential impacts to the regional economy in the event that State Route 169 is extensively damaged. Proposed actions include redesign and retrofit with possible removal or setback of downstream segments of both levees. These actions will dissipate erosive energy and spread flow out over a larger area of floodplain. This will mitigate overall risk by reducing both severity and frequency of damage to the levee, trail, and road from flood events as well as reducing flood risks to neighboring homes. A more precise estimate of the extent of changes in ecosystem process and function as a result of this project can only be measured after more detailed design, modeling, and implementation have been completed. Qualitative Analysis of Projected Changes in Ecosystem Services Each of these individual projects will lead to an ecosystem more resilient to natural flood disturbance, while also having a significant effect on many other interrelated ecosystem processes, functions, and services. Removal or setback of levees will reconnect forested floodplain surrounding the river. This reconnection of forested floodplain will improve floodplain conveyance and infiltration of increased water flow during flood events. Floodplain reconnection will also reduce floodwater velocity as well as subsequent scour and erosion that currently result from confining these higher flows to the main channel. Along with the reduction of flood hazards, these projects will have many other benefits. The subsequent effect of these projects on individual ecosystem services are described in detail below for each of four major types of ecosystem function: Regulation Function, Habitat Function, Provisioning, and Information Function, as outlined in common typology (De Groot et al., 2002). Most if not all of these ecosystem services will be significantly improved as a result of the proposed flood hazard mitigation projects, and given limitations of available quantitative valuation data it is useful to qualitatively characterize the impacts of proposed projects. Regulation Function Ecosystem Services This category of ecosystem service includes processes and functions supporting the maintenance of essential ecological processes and life support systems. Services in this category include gas and climate regulation, disturbance prevention, water regulation and supply, soil formation and retention, nutrient regulation, waste treatment, pollination, and biological control. The most significant result of proposed flood hazard mitigation projects on the Cedar River, in terms of ecosystem services, will be disturbance prevention and water regulation. Given that flood control is the primary goal of these mitigation projects, the reconnection of floodplains and increased conveyance are designed to specifically maximize the natural benefits of ecosystems for these particular services. These services are much more effectively provided by riparian forest and side-channel habitat in areas of connected floodplain, which function in a way that spreads out flows and increases the capacity for overbank storage and conveyance of floodwater and reduces flow velocities. The dynamics of forested floodplains also serve to moderate flows during extreme precipitation flood events, not only through improved conveyance and storage, but also through improved conditions for soil infiltration of rainfall and surface flow. Such effects will also then increase the

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reliability and predictability of water supply through recharge of subsurface aquifers. These ecosystem services are well suited for valuation, as research has established that storm water management and flood protection provided by wetlands and riparian ecosystems are of vast economic value (Farber et al., 1987; Kenyon et al., 2001; Thibodeau et al., 1981). A Washington State wetlands study within WRIA 9 assessed the value of flood protection provided by wetlands in Renton, finding that Renton wetlands yielded flood protection benefits worth $41,300 per acre to $48,200 per acre (Leschine et al., 1997). To supplement available data, the avoided cost portion of this study was derived from extensive site-specific data, enhancing the accuracy for quantitative valuation of reduced flood damage. Another aspect of improved disturbance prevention ecosystem services is the reduction of scour and erosion. These benefits will result from floodplain reconnections that reduce water velocity during flood events, dampening the flood’s destructive effects. Increases in periodic flow through areas of forested floodplain reconnected as a result of levee setback or removal will increase sediment filtering by riparian soils. Reduced water velocity in combination with the increased water filtering in riparian forest and wetlands soils will reduce the sediment load and turbidity of water in the main river channel. There is also potential for reductions of downstream transfer of agricultural nutrients from upstream locations. Research shows that riparian forest buffers are estimated to reduce runoff nitrate levels by 84 percent and reduce sediment by more than 80 percent (Northeast Midwest Institute, 2004). This will subsequently improve ecosystem services of soil formation and retention as well as nutrient regulation. The total rate of nutrient rich sediment transfer downstream will be reduced and riparian forest and wetlands in the reconnected floodplain will have greater access to these nutrients. Levee setback or removal, along with other subsequent or companion restoration or mitigation activities, are likely to improve the overall health and diversity of riparian forest ecosystems in the region. More frequent inundation of the forested floodplain by high river flows will improve ecosystem services of climate and gas regulation by improving the health of willow, cottonwood and conifer tree species. These ecosystem services are often the most frequently overlooked since we are less aware of the indirect benefit provided, yet at a global scale these services are critical elements of a habitable planet. Trees comprising ecologically healthy forests are among the primary means for regulation of atmospheric gases such as carbon dioxide and nitrogen as well as removal of atmospheric pollutants. This is also another area for which quantitative valuation data is readily available. Research has shown that one acre of forest can remove 40 tons of carbon from the air and produce 108 tons of oxygen annually (Northeast Midwest Institute, 2004). Market values of carbon sequestration range from $10 to $100 per ton (McCarl et al., 2000; Haener et al., 2000) and $650 to $3,500 per hectare (Bishop et al., 2002). The level of improvement in these ecosystem services will, of course, fluctuate based on the ecosystem composition, structure and health (Bishop et al., 2002). For example, a Douglas fir forest plantation, planted ten years ago will not produce the same services as a natural old growth forest with a variety of tree sizes and species. In 2000, carbon sequestration in King County was estimated at about 56 million metric tons and was predicted to average about 68 tons per forested acre in 2005 (Turnblom et al., 2002). We used our own calculations based on average sequestration rate data from western Washington to derive the gas/climate regulation value. This is one of the few calculations we were able to make using regionally-specific data (see Table 6). The potential economic value of carbon sequestration can be calculated in different ways. Some off-set programs pay by total carbon stock maintained over time, while others pay by annual sequestration rates. For the purposes of this report, we are using annual sequestration rates because it is easier to calculate without having to show differences between baseline conditions and conditions resulting from project implementation. Future work could use more specific data and could compare between different types of market-based programs. In addition, we apply low-end current market rate estimates for our “low” value ($10 per metric ton CO2) and we use marginal social cost of avoided climate damages for a high-end estimate ($100 per metric ton of CO2) (Tol, 2005). We assumed that disconnected forest would have lower annual sequestration rates than reconnected riparian forest and that forested side-channel habitat would have intermediate rates given

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that these forests could be periodically flooded, which can slow growth rates. However, nutrients and moisture would still make these forests somewhat more fertile than forest disconnected from the river. Pollination and biological control, the remaining ecosystem services categorized as regulation functions, are also likely to be improved by the flood hazard mitigation projects but to a lesser or less predictable extent. Increased health and diversity in riparian wetland and forest ecosystems is likely to subsequently affect insects, birds, and a variety of terrestrial and aquatic species. Given the complexity of ecosystem dynamics and extent to which these effects will not be limited to the specific project sites it is difficult to predict discreet values. Valuation data for these ecosystem services were not included in this study due to the unpredictability of post-project change in these functions, yet these data are still useful to get a sense of relative importance. Honeybees have been valued as natural pollinators for American cropland at $9 – 20 per hectare, and pollination services provided to US agriculture by all other pollinators are estimated at over $4 billion annually (Southwick et al., 1992). Natural systems also provide biological control services that naturally limit growth of pest populations. Estimates indicate that it would cost more than $7 per acre to replace the pest control services provided by birds in forests with chemical pesticides (Krieger 2001). Habitat Function Ecosystem Services This category of ecosystem service includes processes and functions supporting the provision of habitat suitable for wild plant and animal species. Services in this category include refugium function and nursery function. In the Pacific Northwest, the services provided by these ecosystem functions are perhaps the most notable and commonly cited ecosystem services improved by restoration projects in the riparian corridor because of their positive impact on salmon spawning. Habitat for salmon spawning will be greatly improved in all project locations as a result of reduced erosion, sediment load, and turbidity in the main river channel, as well as natural gravel bar formation. Increases in total area of connected floodplain as well as decreases in channel flow velocity will increase the extent and improve the quality of salmonid spawning habitat through the creation of natural pools protected from high flood flows. Furthermore, in the Cedar Rapids, Rainbow Bend, and Rhode-Getchman project sites, the projected formation of forested side-channels is likely to provide a significant increase in the total area of aquatic habitat for salmon spawning. These effects will significantly improve ecosystem services in the form of nursery and refugium functions supporting the spawning of trout, whitefish, and salmon species. Provisioning Ecosystem Services This category of ecosystem service includes processes and functions supporting the provision of natural resources. Services in this category include production of food and raw materials as well as genetic, medicinal or ornamental resources. Due to the fact that these ecosystem functions and services result in direct benefit in the form of products with explicit market value, the resources produced are also frequently referred to as ecosystem “goods.” Total productivity of marketable goods, such as timber and salmon, will certainly be increased by improved ecosystem health and function in these project mitigation sites. In the case of salmon production there is a high degree of certainty that these effects will spill over into other sites downstream as a result of reduced scour velocities and increased cover from native riparian vegetation. The result will be improved salmon spawning, population health and production of marketable goods. These effects are clearly quite interconnected with the improvement of nursery and refugium functions of in-stream aquatic ecosystems as discussed previously. The flood hazard mitigation project sites are not areas regularly used for significant harvesting of marketable ecosystem goods such as timber or fish. Therefore, despite the ease of generating commercial market data for these goods and what would likely be a relatively high valuation of production function ecosystem services, this study does not include these valuation data. Other provisioning services in the form of genetic, and medicinal and ornamental resources and goods produced by improved ecosystem health were likewise not included and there would likely be a lesser occurrence and total value in these cases.

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Information Function Ecosystem Services This category of ecosystem service includes processes and functions supporting the provision of opportunities for human cognitive development. Services in this category include generation of aesthetic information, recreational opportunities, cultural or artistic information, spiritual and historic information, as well as information contributing to science and education. It is difficult to project the effect that these projects will have on these ecosystem services as it is not yet clear what access and permitted uses will occur on the project sites post-project. It is important to note that ecosystem service valuation method for such benefits does not necessarily depend on actual use for there to be a value: information functions represent a category of indirect use and option-use services for which merely having the option of using this ecosystem service has inherent benefit and the economic value exists even if the option to use is not exercised. Recreation and aesthetic services are perhaps the most likely information functions that will be notably improved by the flood hazard mitigation projects. Due to offsite migration of salmon, recreational fishermen throughout the region are likely to benefit from improved salmon spawning and rearing as previously discussed. Tourists and local community members are likely to benefit from improved scenery, either from a road view or direct access to project sites. Homeowners in the local area are also likely to benefit from the effect that aesthetic services have on residential property values in areas adjacent to or near project sites. A study in the Portland, Oregon area found that residential property values increased $436 for every 1,000 feet closer that a property was to a wetland (Mahan et al., 2000). Research studies have also assessed how other environmental amenities enhance property values (Crompton, 2001; Anderson et al., 1988; Dorfman et al., 1996). In addition to this qualitative discussion, preliminary quantitative analysis of the economic value of these proposed projects includes an estimate of maintenance and repair costs to the road, levee, and trail that will be avoided as well as a non-market valuation of improvement to ecosystem services and natural capital assets (see Tables 7 – 13 for quantitative valuation portions of this economic analysis). Given the limitations of non-market valuation methods, conservative assumptions made in the course of analysis, potential for significant downstream effects evident only through hydraulic modeling as well as the qualitative effects discussed above, this quantitative valuation is presumed to be a significant underestimate of the total economic value that would be generated by proposed actions. Quantitative Monetary Valuation Results Implementation of all six projects results in a minimum net gain of between $65,326 and $3.11 million per year. The average net gain is $639,524 per year. By net gain we are referring to the difference in the value between ecosystem services provided prior to project implementation and those provided after project implementation. Per acre values averaged over all six projects ranged from between $468 and $22,333 per year with average values being $4,581 per acre per year. All values are adjusted to 2006 dollars using the Bureau of Economic Analysis Consumer Price Index inflation adjustor. The total flow of value of net gained ecosystem services over 100 years is between $6.5 and $311 million at a 0% discount rate (full intergenerational equity, see discussion below), with an average of $64 million. Using a 3.5 percent discount rate, which is the standard used by the U.S. Army Corps of Engineers for public works projects, discounted value of flows of services is between $1.8 million and $86.2 million with an average of $17.7 million. The following tables summarize the results from our quantitative analysis. Table 6 shows the value per acre used for each ecosystem service for which we had data from recent peer-reviewed studies and for the avoided cost calculation. Table 7 shows results for applying these per acre values to each project before the flood hazard reduction project takes place. Table 8 shows results after each project, and Table 9 shows the net change in ecosystem service value. Tables 10 and 11 summarize the results of the avoided cost calculation for each project since this portion of the ecosystem service valuation was done using the most localized data available. Table 12 shows the combined net benefits of gains in ecosystem services. Table 13 shows net present value.

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Table 6. Per Acre Values of Ecosystem Services by Cover Type (in 2006 dollars per acre per year)

Riparian Forest disconnected

Riparian Forest reconnected

Forested Side-channel

River /Gravel

Riparian Shrub/ Grass

Disconnected Riparian Wetland

$/ac/yr (2006) Low High Low High Low High Low High Low High Low High Gas regulation $51.30* $513* 99.00* $990.00* $73.33* $733.00* $7.30 $73.30 X Disturbance prevention Y Y Y Y Y Y Water regulation X $7.56 $6,991.97 X X X X Water supply $5.16 $13,015.08 $5.16 $31,404.56 $32.34 843.44 $0.27 $31,404.56 Soil retention X X X X X Soil formation X X X X Nutrient regulation X X X X X Waste treatment X X X Pollination X X X X Biological control X X X Refugium/nursery function $1.23 $500.24 $0.18 $2,532.86 $1.23 $12,537* $58.89* $1,480* $0.62 $250.12 $5.92 $12,537.14 Food X X X Raw materials X X X Genetic resources X X X X Medicinal resources X X X Ornamental resources X X

X

Aesthetic/Recreation $0.18 $637.81 $0.18 $10,624 $1.69 $10,624.14 $1.69 $1,919 $0.09 $318.91 $31.47 $9,347.33 Cultural and artistic $4.67 $4.67 $4.67 $4.67 X Spiritual and historic X X X X Science and education X X

X X

* Indicates that value includes data from study in the Pacific Northwest. X indicates qualitative change in ecosystem service for which we have no economic data Y indicates that we used values from the avoided cost calculation in general for this service. See values in Table 12.

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As can be seen from this table, there are several very important ecosystem services for which we know that conditions will improve as a result of the projects analyzed here but for which there is no valuation data in the literature. Therefore, the total ecosystem service values presented here are most certain to be an underestimate of true gains in value. It should also be noted that the ranges between low values and high values are large. We show this full range to give the reader a clear sense of the variation in the literature. We used the very lowest estimate for a service – cover type combination and the highest of the high values, rather than averaging all low values estimates for a composite low and all high value estimates for composite high value. The average values represent an integration of all estimated values for each service-cover type combination. Table 7. Ecosystem Service Values Before Project Implementation

Site Habitat Before acres Low Before Average Before High Before

Jones Non-vegetated 5.4 $0 $0 $0 Shrub 0.2 $2 $33 $128 Wetland 1.3 $49 $13,149 $70,936 Disconnected forest 2.9 $153 $1,529 $4,788 Reconnected forest 0.0 $0 $0 $0

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.0 $0 $0 $0 In-stream 4.8 $163 $4,738 $13,258 Total 14.6 $367 $19,449 $89,110 Herzman Non-vegetated 0.0 $0 $0 $0 Shrub 0.9 $7 $138 $546 Wetland 0.0 $0 $0 $0 Disconnected forest 7.7 $403 $4,033 $12,631 Reconnected forest 0.0 $0 $0 $0

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.0 $0 $0 $0 In-stream 4.8 $163 $4,738 $13,258 Total 13.3 $573 $8,909 $26,434 Cedar Non-vegetated 2.7 $0 $0 $0 Shrub 2.3 $18 $374 $1,477 Wetland 0.0 $0 $0 $0 Disconnected forest 16.7 $880 $8,803 $27,573 Reconnected forest 0.0 $0 $0 $0

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.0 $0 $0 $0 In-stream 4.8 $163 $4,738 $13,258 Total 26.5 $1,062 $13,916 $42,308 Rainbow Non-vegetated 13.6 $0 $0 $0 Shrub 5.8 $46 $944 $3,725 Wetland 0.0 $0 $0 $0 Disconnected forest 19.4 $1,023 $10,226 $32,030 Reconnected forest 0.0 $0 $0 $0 Forested side 0.0 $0 $0 $0

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channel Gravel bar 0.0 $0 $0 $0 In-stream 8.5 $289 $8,390 $23,477 Total 47.3 $1,358 $19,561 $59,233 Jan Non-vegetated 0.0 $0 $0 $0 Shrub 1.0 $8 $163 $642 Wetland 0.0 $0 $0 $0 Disconnected forest 4.8 $252 $2,525 $7,909 Reconnected forest 6.8 $794 $27,598 $186,337

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.0 $0 $0 $0 In-stream 6.7 $228 $6,614 $18,506 Total 19.3 $1,282 $36,899 $213,393 Rhode-Getchman Non-vegetated 5.1 $0 $0 $0 Shrub 2.2 $17 $352 $1,387 Wetland 0.0 $0 $0 $0 Disconnected forest 7.2 $380 $3,795 $11,888 Reconnected forest 0.0 $0 $0 $0

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.0 $0 $0 $0 In-stream 4.2 $143 $4,146 $11,601 Total 18.6 $540 $8,293 $24,876 Totals Non-vegetated 26.8 $0 $0 $0 Shrub 12.3 $99 $2,004 $7,907 Wetland 1.3 $49 $13,149 $70,936

Disconnected forest 58.6 $3,091 $30,911 $96,818

Reconnected forest 6.8 $794 $27,598 $186,337

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.0 $0 $0 $0 In-stream 33.8 $1,150 $33,364 $93,358 0.0

CUMULATIVE TOTAL 139.6 $5,182 $107,026 $455,355

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Table 8. Ecosystem Service Values After Project Implementation

Site Habitat After acres Low After

Average After High After

Jones Non-vegetated 1.8 $0 $0 $0 Shrub 0.0 $0 $0 $0 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 $0 $0 $0 Reconnected forest 7.0 $817 $28,409 $191,817

Forested side channel 0.0 $0 $0 $0

Gravel bar 1.0 $93 $1,590 $4,242 In-stream 4.8 $446 $7,632 $20,361 Total 14.6 $1,356 $37,631 $216,420 Herzman Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 $0 $0 $0 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 $0 $0 $0 Reconnected forest 7.7 $893 $31,047 $209,629

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.9 $79 $1,351 $3,606 In-stream 4.8 $446 $7,632 $20,361 Total 13.3 $1,418 $40,031 $233,596 Cedar Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 $0 $0 $0 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 $0 $0 $0 Reconnected forest 17.6 $2,055 $71,429 $482,284

Forested side channel 3.5 $515 $34,294 $218,859

Gravel bar 0.6 $35 $362 $888 In-stream 4.8 $446 $7,632 $20,361 Total 26.5 $3,051 $113,717 $722,392 Rainbow Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 $0 $0 $0 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 $0 $0 $0 Reconnected forest 37.0 $4,320 $150,163 $1,013,892

Forested side channel 0.0 $0 $0 $0

Gravel bar 1.8 $164 $2,085 $4,182 In-stream 8.5 $790 $13,515 $36,056 Total 47.3 $5,274 $165,763 $1,054,130 Jan Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 $0 $0 $0 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 $0 $0 $0 Reconnected forest 12.6 $1,471 $51,137 $345,271

Forested side channel 0.0 $0 $0 $0

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Gravel bar 0.0 $0 $0 $0 In-stream 6.7 $623 $10,653 $28,421 Total 19.3 $2,094 $61,790 $373,692 Rhode-Getchman Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 $0 $0 $0 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 $0 $0 $0 Reconnected forest 9.3 $1,086 $37,744 $254,843

Forested side channel 4.4 $647 $43,113 $275,137

Gravel bar 0.7 $64 $811 $1,626 In-stream 4.2 $390 $6,678 $17,816 Total 18.6 $2,187 $88,345 $549,423 Totals Non-vegetated 1.8 $0 $0 $0 Shrub 0.0 $0 $0 $0 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 $0 $0 $0 Reconnected forest 91.2 $10,641 $369,929 $2,497,736

Forested side channel 7.9 $1,162 $77,407 $493,997

Gravel bar 5.0 $435 $6,199 $14,544 In-stream 33.8 $3,141 $53,742 $143,376

CUMULATIVE TOTAL 139.6 $15,379 $507,276 $3,149,652

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Table 9. Net Change in Ecosystem Service Values After Project Implementation.

Site Habitat After acres Low Net

Average Net High Net

Jones Non-vegetated 1.8 $0 $0 $0 Shrub 0.0 -$2 -$33 -$128 Wetland 0.0 -$49 -$13,149 -$70,936 Disconnected forest 0.0 -$153 -$1,529 -$4,788 Reconnected forest 7.0 $817 $28,409 $191,817

Forested side channel 0.0 $0 $0 $0

Gravel bar 1.0 $93 $1,590 $4,242 In-stream 4.8 $283 $2,894 $7,103 Total 14.6 $989 $18,183 $127,310 Herzman Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 -$7 -$138 -$546 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 -$403 -$4,033 -$12,631 Reconnected forest 7.7 $893 $31,047 $209,629

Forested side channel 0.0 $0 $0 $0

Gravel bar 0.9 $79 $1,351 $3,606 In-stream 4.8 $283 $2,894 $7,103 Total 13.3 $845 $31,122 $207,161 Cedar Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 -$18 -$374 -$1,477 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 -$880 -$8,803 -$27,573 Reconnected forest 17.6 $2,055 $71,429 $482,284

Forested side channel 3.5 $515 $34,294 $218,859

Gravel bar 0.6 $35 $362 $888 In-stream 4.8 $283 $2,894 $7,103 Total 26.5 $1,989 $99,801 $680,084 Rainbow Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 -$46 -$944 -$3,725 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 -$1,023 -$10,226 -$32,030 Reconnected forest 37.0 $4,320 $150,163 $1,013,892

Forested side channel 0.0 $0 $0 $0

Gravel bar 1.8 $164 $2,085 $4,182 In-stream 8.5 $501 $5,124 $12,579 Total 47.3 $3,915 $146,202 $994,896 Jan Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 -$8 -$163 -$642 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 -$252 -$2,525 -$7,909 Reconnected forest 12.6 $677 $23,539 $158,934

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Forested side channel 0.0 $0 $0 $0

Gravel bar 0.0 $0 $0 $0 In-stream 6.7 $395 $4,039 $9,915 Total 19.3 $811 $24,891 $160,298 Rhode-Getchman Non-vegetated 0.0 $0 $0 $0 Shrub 0.0 -$17 -$352 -$1,387 Wetland 0.0 $0 $0 $0 Disconnected forest 0.0 -$380 -$3,795 -$11,888 Reconnected forest 9.3 $1,086 $37,744 $254,843

Forested side channel 4.4 $647 $43,113 $275,137

Gravel bar 0.7 $64 $811 $1,626 In-stream 4.2 $247 $2,532 $6,215 Total 18.6 $1,647 $80,052 $524,547 Totals Non-vegetated 1.8 $0 $0 $0 Shrub 0.0 -$99 -$2,004 -$7,907 Wetland 0.0 -$49 -$13,149 -$70,936 Disconnected forest 0.0 -$3,091 -$30,911 -$96,818 Reconnected forest 91.2 $9,848 $342,331 $2,311,399

Forested side channel 7.9 $1,162 $77,407 $493,997

Gravel bar 5.0 $435 $6,199 $14,544 In-stream 33.8 $1,990 $20,377 $50,019

CUMULATIVE TOTAL 139.6 $10,197 $400,250 $2,694,297

As can be seen from Tables 7 – 9, there is a net gain of between $10,197 and $2.7 million per year from ecosystem service values, not including local avoided cost values. Total value of ecosystem services, minus the avoided cost estimate, is between $15,379 and $3.15 million. Reconnected riparian forest yields the largest gain in both acreage and ecosystem service values as a result of the six projects analyzed here. Avoided Cost Model Results from avoided cost modeling using FEMA’s Riverine Flood Hazard Mitigation Model are shown in Table 10. We generated our own model for avoided costs from facilities repairs. This is shown in Table 11. We generated results for avoided damages from home and temporary housing costs and from repair costs to King County flood protection facilities. There would be avoided costs from reduced damage to the Cedar River Trail, damage to highway 169, and lost work time due to people needing to attend to their damaged homes and people not being able to commute on Highway 169. We were not able to analyze data for these particular avoided costs for this report. Implementation of these six projects by themselves would not likely reduce emergency service costs, as many emergency services would be deployed county-wide during flood events, regardless of the fact that people at the home buyout sites would no longer require them. It should be noted however, that if King County were to decide to assess the avoided cost of similar projects county-wide, there would very likely be a measurable reduction in the need for emergency services.

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Table 10. Avoided Costs to Residential Structures

Project Site Annual Benefit

Lower Jones Road

Setback

Low Potential

(grade+3 ft) Ave.

High Potential

(grade+1ft) Parcel #1 $919 Parcel #2 $145 Parcel #3 $186 Parcel #4 $215 Parcel #5 $0 $0

Total $0 $733 $1,465

Rainbow

Bend/Cedar Grove

Annual Benefit

Low Ave High Mobile Home

Park 0 $10,613

Homes Parcel #1 $2,726 Parcel #2 $560 Parcel #3 $375 Parcel #4 $506 Parcel #5 $68,875 Parcel #6 $9,190 Parcel #7 $15,888 Parcel #8 $12,202 Parcel #9 $0

Parcel #10 $0 Parcel #11 $0 Parcel #12 $0 Parcel #13 $0 Parcel #14 $0

Total $0 $60,468 $120,935

Rhode-Getchman Setback

Left Annual Benefit

Low

(grade+3 ft) High (grade

+1ft)

Parcel #1 $0 $32,242 Parcel #2 $0 $33,334 Parcel #3 $0 $6,855 Parcel #4 $0 $2,911 Parcel#5 $20,770 $156,957

Total $20,770 $126,535 $232,299

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Table 11. Avoided Costs from Reduced Need for Repairs to Flood Control Structures

Project Name Linear' Flood Freq.

Ann. Prob.

Est. cost low Est. cost high

Risk Low

Risk Mean Risk High

Jones Road Buck's Curve 60.00 65 0.0154 $30,000 $60,000 $462 $692 $923 Camp Freeman 135.00 23 0.0435 $67,500 $135,000 $2,935 $4,402 $5,870 Camp Freeman 35.00 65 0.0154 $17,500 $35,000 $269 $404 $538 Cedar River Trail Site #1 170.00 23 0.0435 $85,000 $170,000 $3,696 $5,543 $7,391 SUBTOTAL $170,000 $340,000 $7,361 $11,042 $14,722

Herzman Herzman 50.00 65 0.0154 $25,000 $50,000 $385 $577 $769 Cedar River Trail Site #2 100.00 23 0.0435 $50,000 $100,000 $2,174 $3,261 $4,348 Cedar River Trail Site #2B 100.00 23 0.0435 $50,000 $100,000 $2,174 $3,261 $4,348

SUBTOTAL $125,000 $250,000 $4,732 $7,099 $9,465

Rainbow Bend Rainbow Bend 400.00 65 0.0154 $200,000 $400,000 $3,077 $4,615 $6,154 Rainbow Bend 100.00 23 0.0435 $50,000 $100,000 $2,174 $3,261 $4,348 Cedar River Trail Site #6 100.00 23 0.0435 $50,000 $100,000 $2,174 $3,261 $4,348 SUBTOTAL $50,000 $100,000 $7,425 $11,137 $14,849

Jan Road Jan Road 50.00 65 0.0154 $25,000 $50,000 $385 $577 $769 Cedar River Trail Site #7 100.00 23 0.0435 $50,000 $100,000 $2,174 $3,261 $4,348 SUBTOTAL $50,000 $100,000 $2,559 $3,838 $5,117

Rhode

Getchman 25.00 65 0.0154 $12,500 $25,000 $192 $288 $385 Rhode 250.00 65 0.0154 $125,000 $250,000 $1,923 $2,885 $3,846 Rhode 220.00 23 0.0435 $110,000 $220,000 $4,783 $7,174 $9,565 SUBTOTAL $235,000 $470,000 $6,898 $10,347 $13,796

Cedar Rapids Ricardi 100.00 65 0.0154 $50,000 $100,000 $769 $1,154 $1,538 Cavanaugh/Riverbend 600.00 65 0.0154 $300,000 $600,000 $4,615 $6,923 $9,231 SUBTOTAL $875,000 $1,750,000 $5,385 $8,077 $10,769

TOTAL $1,505,000 $3,010,000 $34,360 $51,539 $68,719

It is important to note that our results estimate only two factors in likely avoided costs from implementing these projects. In addition, it is very likely that the cumulative effect of these six projects on the hydraulics of flood water will have a wider area of positive impact, from reduced flood velocities and elevations, than just the footprint of the projects, thus reducing flood impacts on other parts of the river corridor.

The combined economic benefit of gained ecosystem services, plus avoided costs from home damages and displacement and facilities damages are shown in Table 12.

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Table 12. Total Net Benefit of Ecosystem Services from Six Flood Hazard Reduction Projects

Total Net Annual Value ($/year) Low Mean High

Lower Jones Road Project

Benefit Transfer Ecosystem Service Valuation $989 $18,183 $127,310

Avoided Cost $7,361 $11,774 $16,187

Total $8,351 $29,957 $143,498Herzman Levee Project

Benefit Transfer Ecosystem Service Valuation $845 $31,122 $207,161

Avoided Cost $4,732 $7,099 $9,465

Total $5,577 $38,220 $216,626Cedar Rapids Project

Benefit Transfer Ecosystem Service Valuation $1,989 $99,801 $680,084

Avoided Cost $5,385 $8,077 $10,769

Total $7,373 $107,878 $690,853Rainbow Bend Project

Benefit Transfer Ecosystem Service Valuation $3,915 $146,202 $994,896

Avoided Cost $7,425 $71,605 $135,784

Total $11,340 $217,806 $1,130,681Jan Road Project

Benefit Transfer Ecosystem Service Valuation $811 $24,891 $160,298

Avoided Cost $2,559 $3,838 $5,117

Total $3,370 $28,728 $165,415Rhode-Getchman Levee Project

Benefit Transfer Ecosystem Service Valuation $1,647 $80,052 $524,547

Avoided Cost $27,668 $136,881 $246,095

Total $29,315 $216,934 $770,642

All Project Totals

Benefit Transfer Ecosystem Service Valuation $10,197 $400,250 $2,694,297

Avoided Cost $55,130 $239,274 $423,418CUMULATIVE TOTAL $65,326 $639,524 $3,117,715

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Table 13. Total Estimated Value of Ecosystem Service Flows from the Six Project Sites

Total Annual Value ($/year) Low Mean High

Lower Jones Road Project

Benefit Transfer Ecosystem Service Valuation $1,356 $37,631 $216,420

Avoided Cost $7,361 $11,774 $16,187

Total $8,717 $49,405 $232,608Herzman Levee Project

Benefit Transfer Ecosystem Service Valuation $1,418 $40,031 $233,596

Avoided Cost $4,732 $7,099 $9,465

Total $6,151 $47,129 $243,061Cedar Rapids Project

Benefit Transfer Ecosystem Service Valuation $3,051 $113,717 $722,392

Avoided Cost $5,385 $8,077 $10,769

Total $8,435 $121,794 $733,161Rainbow Bend Project

Benefit Transfer Ecosystem Service Valuation $5,274 $165,763 $1,054,130

Avoided Cost $7,425 $71,605 $135,784

Total $12,698 $237,367 $1,189,914Jan Road Project

Benefit Transfer Ecosystem Service Valuation $2,094 $61,790 $373,692

Avoided Cost $2,559 $3,838 $5,117

Total $4,652 $65,627 $378,809Rhode-Getchman Levee Project

Benefit Transfer Ecosystem Service Valuation $2,187 $88,345 $549,423

Avoided Cost $27,668 $136,881 $246,095

Total $29,855 $225,227 $795,518

All Project Totals

Benefit Transfer Ecosystem Service Valuation $15,379 $507,276 $3,149,652

Avoided Cost $55,130 $239,274 $423,418CUMULATIVE TOTAL $70,508 $746,550 $3,573,070

Table 13 shows the total estimated value of ecosystem services that will be present on the sites as a result of implementing the projects. We show this because it is important to realize that these numbers represent an estimate of total natural capital asset value that will be present on the site. The final table

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(Table 14) shows the Present Value of these flows of ecosystem services over a 250-year period. This calculation gives an estimate of the value of the natural capital stock that results from implementation of the proposed projects (net value). Table 14. Present Value of Ecosystem Service Benefits for 250 Years (million of 2006 dollars)

Discount Rate

0% 3.5% 6.25 %

Value Estimate

Low Ave High Low Ave High Low Ave High

Net Benefits

$16.3 $159.9 $ 779 $1.9 $18.3 $89.1 $1.0 $9.8 $47.9

Discussion Interpretation of Results Our analysis shows that there are significant ecosystem service values to be gained by implementing flood hazard reduction projects in the Cedar River Watershed. We were able to demonstrate that, where hydraulically reconnected to the river channel, floodplain/riparian forests and forested side channels would be restored and ecosystem service values increased. In addition, there are several ecosystem services that would be gained but for which economic data is lacking, so the results from our quantitative analysis are underestimates. We were also able to show that value is to be gained from removing homes and flood control structures that are in danger of repeated damages from flood events. Such actions have a “double-dividend” of removing sources of repetitive costs and increasing the capacity of the river as a whole to absorb flood water.

Throughout the application of the methods employed in this study, a relatively conservative approach to valuation was applied. Quantitative valuation of ecosystem services was completed only for those ecosystem services and vegetative cover combinations for which transfer data was available. FEMA default values for building value, replacement cost of building contents, rental cost of temporary building space, and other displacement costs are well below locally-specific data given the relative strength of the regional economy and housing market as compared to the national economy. Site-specific data on flood elevation and water flow for 500-year flood events were not readily available. The combined effect of these assumptions made in the course of this analysis affirms a high likelihood that the valuation analysis stands as a significant underestimate of the total economic value of the six flood hazard mitigation projects. Due to data and time limitations, we were not able to show quantitatively what the avoided costs in several important categories would be. This is an area of important future research for King County and Washington State. While we would caution the strict extrapolation of our results to other projects in the King County Flood Hazard Reduction Plan, we do think that the per acre values for ecosystem services (minus the specific avoided cost function) could be applied to other projects in which floodplain ecosystems are restored and where an analysis of the acres of different ecosystem types to be gained was conducted.

This analysis also demonstrates a need for more empirical research on the economic valuation of ecosystem services associated with floodplain and salmon habitat restoration in the Puget Sound area and the Pacific Northwest. We found relatively few local and regional original studies in the course of our review of the literature for the benefit transfer analysis used in this study.

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Natural Capital Values and Discounting The continuous annual flow of benefits is worth a great deal. Economists calculate the total value of a flow of annual benefits over a period of time to people today as the net present value. This is a measure in today’s dollar value of this year’s benefits plus the today’s estimated dollar value of the future “discounted” benefits. This calculation of net present value is used in industry and government. Future benefits are “discounted” to reflect the view that most people value a dollar that will be received a year from now as worth less than one received today (because today’s dollar can either be spent now—providing immediate satisfaction—or saved, accruing interest). The discounted flow of annual benefits into the future (see Table 13 above) is an important number and is often used in cost-benefit analysis to determine whether a project is worth the investment. The choice of discount rates determines the magnitude of the stream of benefits and is therefore crucial in perceptions of overall benefits. Assessment and management of ecosystem service flows earned over generations is a difficult challenge. Healthy natural systems are self-maintaining and do not depreciate, in comparison to built capital, which depreciates and eventually is worthless.

Discount rates used in public land management project appraisal can be based on a variety of rate sources including the prime rate of interest, the market rate of interest, or inferred social discount rate.

The tendency of discounting to create present value maximization biases encourages decision makers to select projects that pull short-term benefits into the present and push costs into the discounted future. This is unsustainable. Part of the reason for this is that damages that are incurred by an ecosystem now in order to create immediate financial return usually take decades to centuries to be reversed. Thus, when people make decisions only with present value in mind, they force future generations to pay the cost. Over the long-term, this increases the risk of amplifying intergenerational inequities. This can lead to the liquidation of renewable resources for short term gain while reaping a much greater long-term expense or loss of value. To our ancestors, we were a future generation. Now we are here. Management has often gone beyond discounting. Had Seattle residents in 1900 discounted the value of the Cedar River Watershed to future generations, they may not have invested in acquiring it. This would likely have allowed land development to replace a highly valuable natural water purification system. Today, another generation reaps the benefit of that foresighted investment with less expensive pure water. Today the value provided by these intact ecosystems far outweighs the short-term value that would have been received generations ago. The vast majority of value provided by renewable, healthy ecosystems is held in the indefinite future. In the present day, we reap a thin annual slice of benefits from this continuous stream of the 23 categories of ecosystem goods and services. The vast majority of the benefits ecosystems provide are in the future. This is unlike non-renewable resources, such as fossil fuels or new cars, which expire, depreciate, or eventually either land in a dump or require further energy inputs for recycling or disposal. The primary benefits of non-renewable and human-built capital are held closer to the present. This is an important distinction between natural and human-built capital. In addition, value is not fixed in time. Furthermore, the values of many ecological services rapidly increase in cases where they become increasingly scarce (Boumans et al., 2002). Thus, while we present results with a range of discount rates, when considering natural capital, we think it is more appropriate to consider a zero discount rate or a low or decreasing rate. The value of these projects then to future generations at a zero discount rate is substantial: between $2.7 and $327 million, with an average value of $70 million over 100 years. Again, given that our estimates did not include several ecosystem services or all factors of avoided cost, we think these are substantial underestimates of total value. Therefore, it appears that flood hazard mitigation projects that reduce or

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eliminate future damages and long term maintenance costs, and restore floodplain habitats are more than justified from the perspective of investment of public funds, especially with respect to benefits to future generations. Conclusions Assessing the value of ecosystem services allows agency decision makers and the public to have a greater understanding of the full range of benefits gained from undertaking projects which maintain or restore, directly or indirectly, natural capital assets. Without this full understanding, it is easier to make decisions that result in a lack of investment in ecosystem functions that benefit people but of which the public may be unaware. This situation occurs more often than not and usually results in the need for unexpected expenditures to restore natural capital or to try to create a human-engineered substitute. It is often a future generation that must incur the costs of damages created by prior generations. Additionally, society at large often pays the costs of natural capital that was lost for the benefit of a smaller number of private individuals. This report summarizes the results of a pilot study that can be used as a guide for future studies. We demonstrate that by undertaking flood hazard reduction projects: (1) many costs are avoided from flood damage that would otherwise occur; (2) by reconnecting the river flows to their natural floodplain, such flood protection is accomplished naturally without recurring infrastructure costs to the county and the public; and (3) other valuable ecosystem services are gained which will also be delivered in perpetuity by functioning natural capital. While this report focused on six projects within one watershed, it can be expected that the implementation of similar projects throughout the rest of the watershed and other watersheds in the county will deliver significant public benefits to residents of King County that will remove the need for infrastructure replacement and repairs and repeated house repairs and disruptions to the lives of its residents and will provide gains in salmon habitat and habitat for other riparian associated species, recreation and aesthetic value, water quality and flow regulation, and increased carbon sequestration potential. These gains have significant monetary and non-monetary value. Thus, investments on the part of King County in flood hazard reduction provide multiple, long-term benefits that would not necessarily be revealed without using an ecological economics and ecosystem services approach to project assessment. In order to apply this approach in a more formal cost-effectiveness framework, several things would need to occur. First, comprehensive hydraulic modeling of the cumulative effects of flood hazard reduction projects on the flood regime of the entire river within any watershed that is being evaluated would help improve estimates of avoided costs and improved riparian and aquatic habitat-associated ecosystem services. This is because the total effect of all projects would likely reduce damages to parts of the river outside of the specific project footprint that we analyzed. There would also probably be improvements in salmon and other aquatic habitats throughout the river system, and again, outside the footprint of the projects we analyzed that should be captured in a comprehensive study of the value of gains of ecosystem services as compared to costs of the flood hazard reduction projects. Second, a centralized database of all components that go into avoided cost calculations (risk modeling for home damages, flood facilities damages, road and trail damages, emergency services costs, and lost work time, to mention the most important) would aid in ease of analysis for this or other counties wanting to understand the full benefit of reduced damages from floods. Finally, the State of Washington could improve its understanding of the value of ecosystem services in floodplains by funding more local and regional primary empirical studies of these services and their economic value. The more primary empirical ecosystem services research done to fill in known data gaps, the more accurate a picture of the relative costs and benefits will be.

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