A Factor Analysis of the Dimensions of Economic Damages from Tropical Storms and Hurricanes in Louisiana

Coastal communities are highly sensitive to disturbances from tropical storms and hurricanes. This is particularly true in Louisiana and along the U.S. Gulf Coast where economies are largely dependent on tourism and natural resource based industry. Since Hurricane Katrina and, more recently, Hurricane Sandy, there has been an increase in concern for how coastal communities will mitigate and respond to the impacts of coastal storms. These concerns are made more acute by the increasing population concentrated along the coast and the risk of more frequent and more severe coastal storms in the future. A commonly advocated-for method of storm damage mitigation is wetland preservation and restoration. This research explores the extent to which wetlands attenuate damages from coastal storms in Louisiana from 1997-2008. Using factor analysis, the relationships between wetlands, storm events and coastal populations are explored. The factor analysis suggests that wetland presence is associated with a reduction in economic damages from coastal storms. The results also demonstrate a distinct negative association between the degree of relative estuarine wetland coverage and the degree of economic risk present, illustrating the trade-off between development and conservation. Additionally, factor scores are computed to examine the extent to which wetlands reduce damages according to storm intensity. Representative storms are presented as case-studies to illustrate the result that wetlands may not be a suitable measure of protection against stronger storms. The value of the storm protection provided by wetlands is discussed in monetary terms and economic considerations are highlighted. Finally, limitations and consideration regarding the specifications of the model are discussed and future research areas are highlighted

The Vulnerability of Louisiana to Hurricane Damage and the Value of Wetlands for Hurricane Risk Reduction

Coastal Louisiana is annually threatened by coastal storms. Population grown, wetland loss, and potentially increasing storm frequency are likely to increase coastal vulnerability to these events. Increasingly, coastal management entities are managing land resources to reduce the economic impact of natural disasters with the use of natural infrastructure. This is true in Louisiana where the Louisiana Coastal Master Plan allocates billions of dollars to coastal restoration projects, many of which are intended to mitigate economic damages from tropical storms and hurricanes. Despite this significant proposed investment, the risk reduction value provided by these projects is not well known. This analysis uses model simulation data and hurricane impact data to estimate the parish-level impacts of hurricanes in coastal parishes from 1997-2008. Using this information, an expected damage function is estimated that describes economic damages as a function of population, relative wetland area, and storm intensity. The model is used to estimate the annual vulnerability of coastal parishes to hurricane damage. Future scenarios of hurricane regime change, wetland loss, and population growth are imposed to estimate the increase in coastal storm vulnerability that can be expected under these scenarios. The model parameters are used to estimate the value of coastal wetlands as natural infrastructure for hurricane risk reduction, and important trends in coastal wetland loss are highlighted in terms of their importance for the future vulnerability of coastal Louisiana