By Barbara Kessler
Green Right Now
A newly released study of the of the Mississippi River Delta as a capital asset places a net value of $330 billion to $1.3 trillion on the region’s natural system of goods and services. That means that even the low end of the Delta’s estimated value would exceed BP’s market capitalization (of $189 billion) before the oil disaster on April 20.
The bottomline: “BP may not be able to cover the costs of what they caused,” said David Batker, executive director of the non-profit Earth Economics in Tacoma, Wash., and one of several authors of the study.
“Without restoring the Mississippi Delta, much of the area is not economically viable and that’s a huge loss to the U.S.,” Batker said, explaining that the costs of the oil spill go far beyond one season’s fish or oyster catch. With the oil degrading marshes and delicate estuaries, the area is now more susceptible to hurricanes, and that’s just one way the damage will ripple and potentially magnify.
BP has been “naive” to think they’ll cover costs by making payments for lost seasonal income, said Batker, one of the world’s foremost ecological economists. The devastation is, unfortunately, much deeper.
He likened the oil spill damage to that from the near collapse on Wall Street in 2008 when the titans of commerce engaged in risky behavior that shook institutions across the economy. Likewise, big oil companies are threatening ecosystems in ways that they can’t begin to make up for, in the case of a disaster. And unfortunately, BP’s history of safety issues, recently documented, shows that they were flirting with bad outcomes for a long time, Batker said.
“This is the cost of cutting corners,” he said.
The study, which was conducted by Earth Economics with support from The Environmental Defense Fund, was completed shortly before the spill. It offers a detailed analysis that shows, if a worst case scenario plays out, BP may have significant trouble surviving the final cost of the environmental disaster, and paying for it.
The report, “Gaining Ground – Wetlands, Hurricanes and the Economy: The Value of Restoring the Mississippi River Delta,” evaluates 11 natural system goods and services. They include: water supply, water flow regulation, hurricane protection, food production, raw materials production, recreational value, carbon sequestration, atmospheric composition regulation, waste treatment, aesthetic value and habitat value.
The study points out the threatening confluence of oil pipelines, flood protection and Mississippi River levees that collectively have degraded the wetlands that protect against hurricanes, climate change, sinking land and larger hurricanes.
By protecting against hurricanes, assuring water supply, buffering climate instability, supporting fisheries and other food and fur stocks, maintaining critical habitat, providing waste treatment, and additional benefits, these natural systems provide $12 billion to $47 billion in benefits every year.
“These huge numbers show that the BP oil spill, hurricanes and continued wetland degradation threaten not only the Gulf regional economy, but the national economy,” said Batker. “Unlike the Exxon Valdez oil disaster in 1989, we now have solid economics to put a value on the damage done to natural systems and the resulting harm to people. The Gulf economy needs nature to survive.”
The report had several other contributing authors, economists and ecologists, including John Day, a life-long gulf resident, world renowned wetlands expert and professor emeritus at Louisiana State University.
The experts’ solution is to restore the Mississippi River Delta wetlands—that have lost more land area since 1930, 2,300 square miles, than the size of the state of Delaware—by using the energy, water and sediment of the Mississippi River to rebuild them.
“It is time for our nation to invest in this delta, which is an engine of economic productivity,” said Dr. Day in a statement.
“If healthy, the Mississippi River Delta wetlands will provide benefits in perpetuity.”
The report examined three future scenarios: continued wetland loss, minor wetlands restoration efforts and a major wetlands restoration.
It found that a fully restored Delta could provide a net benefit of $62 billion to the economy in hurricane buffering, healthy fisheries, recreation, clean water and support for other enterprises.
It’s time, Batker said, to stop the destructive behaviors of the 20th Century and move toward sustainable business practices appropriate for the 21st Century.
One example highlighted in the report: If coastal Louisiana had the 7,000 square miles of wetlands that it had in 1930, much of the nearly $200 billion in damages from Katrina might have been avoided.
“Large diversions work, so the solution is clear,” said Dr. Day. “It is rebuilding the Mississippi River Delta…”
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