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The Economic Value of Wetlands

Dy Dr. Andrew Stainback, Economist, The Everglades Foundation

Wetlands are a dominant feature of Florida’s landscape. Once viewed as wastelands that must be drained, wetlands have drastically diminished throughout the U.S.; with Florida losing more than any other state in the lower 48. Over the years, however, our understanding of the benefits of wetlands has improved dramatically. We now know that wetlands produce numerous benefits essential for people and the economy. Wetlands maintain water supply and quality, provide flood control, help regulate the climate, provide places for recreation, and provide habitat for numerous species. Around 75% of all fish and shellfish commercially harvested in the U.S. spend at least part of their life-cycle in wetlands. The number is up to 90% for the recreational catch. And even though wetlands cover only around 5% of the of the land surface in the lower 48 states, they contain over 31% of plant species. (1)

A seminal study was conducted in 1997 to synthesize hundreds of previous scientific studies in order to put an economic value on all the benefits we derive from ecosystems throughout the world. The results indicated that we receive a staggering $33 trillion per year (in 1994 dollars) in benefits from the world’s ecosystems.2 These benefits include everything from natural goods (e.g. food, water, and timber) to services like climate regulation and pollution reduction. Wetlands accounted for at least $4.9 trillion of the overall number and were near the very top of the list in terms of value on a per acre basis (second only to estuaries/seagrass beds).

Why are wetlands so valuable? One reason is that they play a crucial role in protecting us against the ravages of nature such as flooding resulting from tropical cyclones. They can also play an important role in helping us address climate change.

Wetlands and Flood Protection

It has been well-documented that wetlands help protect against flooding. For instance, a recent study published in the Proceedings of the National Academy of Sciences estimated the property damage associated with 88 tropical storms and hurricanes hitting the U.S. between 1996 and 2016 in counties along the Atlantic and Gulf Coast. For counties experiencing property damage, a 1% loss in coastal wetlands increased the cost of that damage by 0.6%. Moreover, the study specifically estimated the reduction in property damage that would have occurred in Florida resulting from Hurricane Irma if Florida had not lost the 500 square kilometers of wetlands that it did between 1996 and 2010. Under this scenario property damage from Hurricane Irma would have caused $430 million less in damage. (3) The flood protection benefits of wetlands will only increase with future rising seas resulting from climate change.

Wetlands and Climate Change

In addition to helping protect against flooding and sea level rise, wetlands can help mitigate or slow down the rate of climate change. Recent studies suggest that that one acre of restored wetlands can sequester more than 1.5 metric tons of carbon per year.4 Combining this information with economic assessments of the expected damage from climate change, a recent study found that coastal wetlands in the Delaware River estuary were worth $21,000 per acre in climate change mitigation benefits alone.5 Another study looking at farmland and using prices from existing carbon trading markets found that 7%-12% of marshes (i.e., grassy wetlands) and 20%-35% of swamps (forested wetlands) could generate enough revenue from the sale of carbon credits alone to offset the cost of restoring the wetland. (4)

These studies are particularly relevant to the Everglades Agricultural Area (EAA). Converting wetlands to agriculture results in high rates of greenhouse gas emissions due to the fact that the organic soil that develops under waterlogged conditions releases substantial quantities of CO2 when the soils are drained. For instance, as a result of drainage and soil subsidence, annual CO2 emissions from the EAA are estimated to be about 5.86 metric tons per acre per year, making this area responsible for almost half of the annual emissions from U.S. organic soils. (6)

Wetlands and Jobs

Finally, restoring wetlands can help generate jobs and grow the economy. A group of researchers recently studied the economic impacts of ecological restoration expenditures in coastal ecosystems (including wetlands) through American Recovery and Reinvestment Act (ARRA). The results indicate that every $1 million spent on restoration generates an average of 17 jobs. (7) The authors note that these employment effects compare favorably to other industries especially traditional extraction industries such as coal, oil, and gas. Closer to home, the U.S. Army Corps of Engineers estimates that every $1 million spent on Everglades restoration generates around 19 jobs.(8)

Bottom Line

Conserving nature and growing the economy are often framed as tradeoffs. However, as our ecological footprint grows and our natural areas shrink, it is becoming increasingly clear that conserving our natural capital is necessary for growing the economy and maintaining our quality of life.


1. United States Environmental Protection Agency. Economic Benefits of Wetlands. (2016).

2. Costanza, R. et al. The value of the world’s ecosystem services and natural capital. Nature 387, 253-260 (1997).

3. Sun, F. & Carson, R. T. Coastal wetlands reduce property damage during tropical cyclones. Proc Natl Acad Sci U S A 117, 5719-5725 (2020).

4. Hansen, L. T. The Viability of Creating Wetlands for the Sale of Carbon Offsets. Journal of Agricultural and Resource Economics 34, 350-365 (2009).

5. Carr, E. W., Shirazi, Y., Parsons, G. R., Hoagland, P. & Sommerfield, C. K. Modeling the Economic Value of Blue Carbon in Delaware Estuary Wetlands: Historic Estimates and Future Projections. J Environ Manage 206, 40-50 (2018).

6. Morgan, J. A. et al. Carbon sequestration in agricultural lands of the United States. Journal of Soil and Water Conservation 65, 6A-13A (2010).

7. Edwards, P. E. T., Sutton-Grier, A. E. & Coyle, G. E. Investing in nature: Restoring coastal habitat blue infrastructure and green job creation. Mar Policy 38, 65-71 (2013).

8. McCormick, B., Clement, R., Fischer, D., Lindsay, M. & Watson, R. Measuring the Economic Benefits of America’s Everglades Restoration (Mather Economics, 2010).

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