WETLAND COMPENSATION COSTS
IN EPA REGION IV—THE SOUTHEAST
Dennis M. King, Ph.D.
and
Curtis C. Eohlen, Ph.D.
University of Maryland System,
Center for Environmental and Estuarine Studies,
Chesapeake Biological Laboratory
P.O. Box 38, Solomons, Maryland 20688
April 1, 1994
University of Maryland, CEES Technical Report UMCEES-CBL-94-049 April 1994.
Prepared under Cooperative Agreement Number CR818-227
with
the U.S. EPA, Office of Policy Analysis
with support from . „
EPA Region IV (Atlanta) and Region IX (San Francisco).
EPA'230-R-96-003
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Southeast Region Compensation Costs
INTRODUCTION .
Regional Climate, Ecology, and Wetlands
The southeastern United • States—the states of Alabama, Florida
Georgia, Kentucky, Mississippi, North Carolina South Carolina and
^oeui&ia, j.^ jf j. j. _j__j_^^i . , ., ViirrVioci- natural abundance
VjGWl ftlCl/ JUX. V-4-U«-»-«•--•— j , J. 1. •
Tennessee—includes some of the states with the
highest natural abundance
Tennessee—incmues SUHLC w*. u.«- ^-.^..^ ..- - 0
of wetlands in the nation. Florida, with the extensive wetlands of the
Everglades ecosystem, as well as hydric hammocks, coastal mangroves salt-
marshes and riverine cypress-tupelo swamps, is estimated to have been 54%
wetland; a* the time of European settlement. Adjacent Georgia and Alabama
were about 18% and 23% wetlands respectively. .
The region receives abundant rainfall distributed throughout the year.
Some seasonally of precipitation is found throughout the region, with win-
terStorms and summer thunderstorms providing somewhat increased ram- -
fa 1 n Sorida, however, precipitation is heavily concentrated in the summer
months Temperatures vary according to elevation and proximity to the
wean from cold-temperate in the northwestern mountains to subtropical in
south Florida. Seasonal temperature fluctuations are greatest in the north, de-
c?easinV to the south and east. A general excess of annual precipitation over
ex'apSranspiration ensures that isolated wetlands are common wherever ge-
oloSc or pedogenic processes have produced local topographic lows or where
groundLwater reaches the surface, as at the bashes of slopes and adjacent to
streams . of the ion is dominated by low mountains^lnland,
with extensive sedimentary and marine deposits toward the coasts. The low,
flacoasS Plain sediments provide ideal areas for the development of exten-
sive wetlands, both tidal and non-tidal. A general lack of ^graphic relief
means that there is little hydraulic gradient, and water takes a long time to
mn off the land. Low gradient coastal streams and rivers have extensive-
loodplains that supporttwo of the most widespread and recognizable wet-
and types in theregion-the cypress-tupelo and bottomland hardwood
oreStsyLow coastal relief also facilitates the extension of tidal in luences
many miles inland, increasing wetland development many miles from the
S Tidal wetland development has also been facilitated by widespread
barrier islands along the coast. The sheltered lagoons inland of the islands
provide excellent conditions for tidal wetland development.
Florida contains more than its expected share of endemic and rare
The sub-tropical climate of southern Florida makes it the,
most outpostP of many tropical taxa, while the biogeographic
soaon providedby the state's peninsular shape encouraged evolution of-
endeiSc taxa to accommodate local conditions: The survival of many of these
taxaTnto the twentieth century undoubtedly owes much^to the state s
extensive wetlands, which increased the state's inaccessibility in the days
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Southeast Region Compensation Cost< . . • . 2 '
before air conditioners, mosquito control, and highways. Other states in the
region are not unusually endowed with endemics or rare species, although
the region includes the headwaters of several •important river systems, and
may represent a center of endemism for several freshwater taxa-.
Wetland Losses ;
Historic wetland losses throughout much" of the region have been' near
50%, about typical for the nation, as a whole (Alabama 50%, Florida 46%,
Mississippi 50%, North Carolina'49%,-and Tennessee 59%). In Tennessee,
wetland losses have been somewhat greater.' Eighty-one percent of the ,
wetlands of the state had been lost by the mid-1980s (Dahl 1990), Losses in
Georgia and South Carolina have been somewhat smaller than elsewhere,
with losses in South Carolina of 27% and in Georgia of 23%.
Wetland losses of the region have occurred as a result of a complex mix
of agricultural development, coastal dredging, urban and suburban develop-
ment, and industrial use. Disruption of coastal wetlands began in colonial
times, especially around urban centers where direct conversion of wetlands- to
urban land and indirect destruction of wetlands.via sedimentation and hy-
• drologic alterations were common. Emergent marshes near urban centers
were .undoubtedly among the first to be used for grazing and other agricul-
tural purposes. Extensive areas of eastern saltmarsh were diked in the
nineteenth century for rice agriculture; however, the end of the civil war and
the decline of the plantation culture and slave economy lead to an
abandonment,of much of the rice land, and reversion of many of these areas
to wildlands similar to the original tidal marshes (Wiegert and Freeman 1990;
Odum et al. 1984). Many wetland forests that harbored populations of valu-
able timber trees like the Atlantic white cedar were cut over early in the re-
gion's history, significantly altering species composition, but conversion of
wetland to non-wetland because of forestry practices was uncommon.
Wetland losses in Tlorida follow a similar .pattern to losses elsewhere
in the region, except that a higher proportion of the state's wetland losses
track Florida's twentieth century emergence as a retirement haven and vaca-
tion destination. During the nineteenth century, much of the state was
inaccessible; too wet even for most agricultural uses, and difficult to drain.
Large scale hydrologic modifications in south Florida began late in the
nineteenth century. Broader, government-sponsored reclamation efforts in
south Florida began in 1905 when Governor Broward pushed 'for expanded
state efforts to convert wetland for agriculture. Federal involvement in flood
control efforts expanded in 1930, and again in 1948, and continued until the
early 1980s, when concern for the environmental consequences of the
extensive hydrologic changes began to affect management of the Everglades
ecosystem (Light and Dineen 1994). In addition to the direct wetland losses
caused by- these large-scale hydrologic modifications, each modification also
triggered" rapid development as previously unsuitable lands"became drier, less
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Southeast Region Compensation Costs .['•.-. ,
1 t i
prone to floods, or easier to drain. With rapid development of the Florida
landscape came equally rapid destruction of the wetlands. Between the mid-
1970s and 1980s (well after many of South Florida's water management
structures were completed), approximately 1.5% of Florida's remaining
wetlands were lost, primarily to agriculture and urban expansion (Prayer and
Hefner 1991).
Regional Economic Conditions
Economic growth in the Southeast has been uneven. Some regions
notably the Atlanta region and much of Florida have enjoyed rapid growth
and robust economies (Forrestal 1993). Elsewhere, and by some measures for
the region as a whole, economic performance has been poor. Poverty is rela-
tively widespread, and disposable incomes low in much..of the region. On the
other hand, the region was quick to respond to the current nationwide .
economic expansion, with job growth faster than ;that found in the nation as a
whole in the later parts of 1992. That performance is expected to continue.
While locally important, defense is not a mainstay of the regional economy,
and thus long-term repercussions of defense cutbacks should be mild.
Strength in timber, furniture, and appliance industries should help the
regional economy grow in response to robust housing markets nationwide
triggered by low mortgage interest rates'. •
This economic growth can be expected to lead to increases in,wetland
impacts. Birth rates in the region are below national averages, but population
growth through the 1980s was above national average in the At antic states
flMC SC GA PL) and at or below the national average for^the gulf and inland
states (KY, TN, AL, MS) (U.S. Department of Commerce 1992). This suggests
that the Atlantic coastal states have been attracting immigrants from other
parts of the country and around the world. New residents need housing, pub-
lic services, additional roads, and shopping facilities. In the process of provid-
' ing the growing population with these needs, wetlands will be affected.
ANALYSIS OF REGION-SPECIFIC DATA I
.
L • •
Methods i ,
The analysis of regional wetland creation, restoration, and
enhancement costs was based on a larger nationwide study with
supplemental data collected and analyzed-specifically for EPA Region IX. In
this section we describe the method used to develop national cost estimates
and the differences between these national jestimates and those in bi A
Region IX The nationwide cost estimates are statistically more robust than
regional cost estimates. For most management and policy purposes even
within the region, cost estimates for wetland creation, restoration, and
enhancement projects should be based on the nationwide numbers with
appropriate adjustments to account for regional economic and ecological
conditions. j
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Southeast Region Compensation Costs • 4 :
In the' nation-wide study cost estimates for approximately 1,000
historical wetland creation, restoration, and enhancement projects were
examined, including records of projects carried out in 44 states over the past
25 years. These historical estimates (hereafter the "secondary database") were
obtained from a wide range of secondary sources, including published and
unpublished reports, information presented in the trade press, and in-house
databases made available by federal and state agencies and at private nonprofit
organizations. , - • ,
Because of the high variability in project cost estimates in the
secondary database and the lack of detailed project descriptions available for a
majority of these historical, cost records, only a limited understanding of'
national or regional project costs could be developed on the basis1 of the
secondary data alone. We therefore supplemented these records/with cost
estimates based on detailed engineering and cost profiles developed for a
smaller set of projects. Cost estimates for 90 wetland creation and restoration
projects from 10 states (the "primary database") were developed using detailed
engineering cost-accounting descriptions of known wetland, creation and
restoration projects developed in collaboration with subcontracted wetland
restoration experts from around the country and within the region. Whereas
the site selection and project design characteristics for the 1,000 projects in the
secondary database were unknown,, the siting and project design
characteristics and engineering and cost profiles for the 90 cases in the
primary database were known in detail. For more information on the
engineering profiles and cost-accounting methods used to develop the
primary database, see the related papers by King and Bohlen (1994a and 1994b).
All cost estimates in both the primary and secondary databases were
standardized in 1993 dollars prior before being analyzed. Costs per acre data
were highly skewed so, for statistical reasons, our analyses were based .on
Log10 transformed data. We used a standard statistical technique called an
analysis of covariance (ANCOVA) to develop equations that indicate how
project costs change as project size changes and to prbduce estimates of per
'acre project cost adjusted for project size. Reported results, except where
otherwise noted, are based on hypothesis tests with p<0.05.
There was also an extremely uneven distribution of cases within and
among project categories. Freshwater emergent wetland creation projects
. were abundant in our sample, for example, while projects to restore beds of
submerged aquatic plants were rare. This pattern, which reflects both the
frequency with which specific wetland types are restored or created
nationwide, and the vagaries of data collection, limits the types of 'statistical
cost comparisons that are possible. The results presented here reflect the most
complete analyses, possible with the existing databases.*
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Southeast Region Compensation Costs
Nationwide Background . •
Wetland creation and restoration projects in the primary database were
separated into eight project categories for analysis. These categories include:
(1) Aquatic Beds, consisting of tidal or nontidal communities of perma-
nently or nearly permanently submerged plants;
(2) Complex Projects, incorporating three or mor^. wetland types;
(3) Freshwater Mixed Projects, consisting of nUjdal projects in which
both woody and emergent vegetation are produced;
(4) Freshwater Forested Projects, establishing trees or shrubs in nontidal
wetlands; i
(5) Freshwater Emergent Projects, establishing emergent vegetation in
nontidal wetlands; ,
(6) Tidal Freshwater Wetland Projects, often consisting of mixed emergent
and woody vegetation;
(7) Saltnuirsh Projects and other marine or estuarine projects, establishing
wetlands dominated by emergent vegetation; and
(8) Mangrove Projects, establishing 'mangrove communities.
Cost Per Acre!
(In t993 $; excludes land costs)
$300.0 -r
$250.0 •
I S200.0 -
UJ
Wetland Type
Figure 1. Point estimates and ranges of .project costs from the primary
database for specific project categories.
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Southeast Region Compensation Costs ' . , ... 6
Differences in the costs of restoring different types of wetlands are not
large relative to the differences in costs within any one wetland category. This
reflects the enormous differences in the site and project design characteristics
within project categories and frequent similarities among-the tasks required
to restore wetlands in different categories. Median, mean, minimum, and
maximum per acre creation and restoration costs for the eight categories of
wetland projects just described and for agricultural conversion projects (from
the secondary database) are shown in Figure 1.
Table 1 displays summary "cost statistics by wetland category based on
the results of the nationwide study (primary data, except for agricultural
conversion .data). Similar, detailed breakdowns of project costs from within
the region itself are potentially misleading because of small sample sizes.
National-regional'comparisons are given below. The table also includes cost'
breakdowns by preconstruction, construction and postconstruction tasks, and
by input category (labor, materials, equipment and other). Region-specific
differences discussed elsewhere in this report will effect some of these values-
Table 1. Cost Estimates and Cost Allocation (excludes land cost) From
the National Study.
Project Type ' . . •
Aquatic Bed
Complex
,FW
Mixed
FW
Forest*
FW
Emerg.
Tidal
FW
Salt
Marsh
Man-
grove
Agric.
Conv**
Project Costs (Thousands) '* - • •
Average
Minimum
Maximum
Median
Sample Size
$19.5
18.3
21.7
18.6
3
$56.7
4.3
258.8
24.8
8
$25.3
1.4
" 65.8 •
23.4
10
$77.9
0.9
248.4
42.7
19
$48.7 .
1.7
170.6
35.2
28
$42.0
0.6
92.6
32.9
3
$18.1
1.0
43.6
10.2
9
$18.0:
2.1
42.8
13.6
4
$1.0
0.005'
20.8
0.5 -
494.
Breakdown by Tasks: , . •. ' '
Preconstruction
Construction
Pos tcons true tion
17%
63
20
10%
74
16
5%
78-
' 17
9%
74
18
13% '
58
28
9%
87.
4 .
16%
73
ll
13%
66
21
0%
100
' 0
Breakdown by Input Category: '.
Labor
Materials
Equipment
Other
58%
8 • '
34
0 ,
,50%
23
14
14
74%
10
16
0
5,1-%
30
18
'2-
63%
26'
9
1
. 31%
54
' 14
1 •
52%
27
20
2
51%
21
28
0
45%.
0
55
0
High end of range involves researching and restoring hydrology and planting; low end involves
restoring hydrology only. '
Agricultural Conversion data are derived from the secondary data. Cost breakdowns for
agricultural conversions are based on a project consisting of hydrologic modification without
planting or formal plan development. '
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Southeast Region Compensation Costs
Primary Data . nmikcts from the southeastern
Our primary databas « ""^SS y * r°om Florida (18), with
even
grove restorations.
An analysis of
determine whether wetland cre-
Data from the Southeast dif-
the country
LlXllC-J'^-'-'^JL , • rt\
(excluding agricultural conversions).
Primary Data: Southeast vsi Other Regions
1,000,000
100,000
Other (o)
Size (acre)
Figure 1. Primary data-Southeast.
Secondary Data '
Fiftv-one of the 397 projects m our
cultural conversions) were from °
Georgia, or Florida (17, 14,
from Alabama, (6 proje.cts), North
ject). Of those, most (33) ^
100
1000
database (excluding agri-
were from Mississippi,
/ with the remainder
d Tennessee (1 pro-
o ,ec enhancement
restoration project. We
from this
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Southeast Region Compensation Costs °.
Projects from the southeast typically are slightly larger than projects from
other regions of the country (Kruskal-Wallis test, Z = 2.10201, p= 0.0356).
We carried out an analysis of covariance to determine whether projects •
from the southeast were more or less expensive than projects from elsewhere
in the country (ANCOVA Table in Appendix A). Projects from the Southeast
are typically less expensive than projects elsewhere, in the country by approx-
imately a factor of three (3.26). That is, wetland projects from the Southeast in
our Secondary database are (on average) less than one-third as expensive as
. projects from other parts of the country. This conclusion is remarkably simi-
lar to the conclusions we drew from our Primary data, where regional pro-
jects were slightly less than a third as expensive as nationally. ,
Secondary Data: Southeast vs. Other Regions
10,000,000 j
1,000,000 -
g 100,000 -
¥
3 10,000 -
o5
o
Other (o)
0.001
0.01
100
1000
Size (acre)
Figure 2. Secondary data—Southeast.
DISCUSSION ,
For at least the past twenty years, the southeastern United States has
been the national center for innovation in the field of wetland creation and
restoration. Projects to create,, modify, and restore many different types of wet-
land have been carried out in the region. Thus it is difficult to identify one or
a few "typical" wetland projects. The wide variety of'restoration and creation
projects, include projects to produce or restore cypress-tupelo swamps, bot-
tomland hardwood forests, freshwater tidal wetlands, saltmarshes, and man-
groves. As the technology of wetland management continues to improve the
range of wetland types being created and restored in the region is likely to
continue to increase. Indeed, some of the most ambitious wetland creation
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Southeast Region Compensation Costs '. ; .
and restoration projects ever attempted anywhere in the world are now get-
ting underway in the Kissimmee-Okechobee-Everglades ecosystem.
Most of the states in the southeast have substantial percentages of their
land area in wetland (AL 1.1.5%, FL 29.5%, GA 14.1%, MS 13.3%, NC 16.9%, SC
•>3 4%). The two landlocked states, however, do not (TN 2.9%, and KY 1.2%).
Thus on an a priori basis, one might expect that, with continued population
arowth and economic development, impacts to wetland will be most signifi-
cant in the coastal states where economic growth is expected to be strongest,
and where remaining wetlands are most widespread. Demand for wetland
mitigation, triggered by those impacts, will thus continue to be highest in the
coastal states, especially those along the Atlantic coast.
If the region follows the pattern seen in most of the eastern United.
States mitigation needs will be greatest for forested wetlands, especially those
supporting flood-tolerant hardwoods. Demand for mitigation of riparian wet-
lands including cypress-tupelo swamps and mangroves will probably also be
substantial, as construction of roads, .utility lines, and other linear projects re-
sult in additional losses to riparian communities. Continued development ot
coastal areas will drive ongoing needs for mitigation of tidal wetlands,
especially saltmarshes.
Reconversion of agricultural lands to wetland has been less common
in the Southeast than in the upper Midwest, where interest in providing
breeding habitat for waterfowl has focused national attention. Nonetheless,
opportunities for agricultural conversions exist, and have been exploited in :
the past Whether such projects become more common in the future will ,
depend on development of appropriate incentives for landowner in-
volvement. Opportunities for enhancement of forested wetlands may also ex-
ist if appropriate enhancement techniques and landowner incentives can be
developed to induce involvement by forest products industries.
Opportunities for inexpensive wetland projects should be greatest in
states with a long history of agriculture and forestry where most current pop-
ulation growth is concentrated in a few major metropolitan areas. Historic
wetland losses in Kentucky of over 80%, with a relatively .high ^portion
(45 5%) of the state's land in active agriculture and relatively little (4./ /oj ot it
developed (U.S. Department of Commerce 1992), suggest that restoration
opportunities should be available there. While the coastal states have had
somewhat lower wetland losses on a percentage basis, the total area ot con-
verted wetlands is substantial, and restoration opportunities are widespread,
especially on the coastal plain. ' j .
General construction costs throughout the southeast are below the
national average because of relatively low regional labor costs (Smil: and
Waier 1991). Even in the most rapidly growing areas of the southeast (Atlanta
and northern Florida), labor costs for construction projects are 15%, or more
below the national average. In some southeastern cities, labor costs are less
than two-thirds of the national average. Wetland creation and restoration
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Southeast Region Compensation Costs - • > _ • -
efforts are tabor-intensive P^s^^^^2otl« Sw na±X
2S4^MS^^^^
1 n%-20% below the national average. fu0 crmth
hydrotogy vegetation, and wildlife found m the region.
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Southeast Region Compensation Costs
11
BIBLIOGRAPHY
i1 ppp
Executive
1993-
Studies, Horn Point MD.
178Q/ t 198o's. U.S.
Service, Wa5Mngton,
Urban Affairs, U.S. Senate, ,
Federal Reserve BuHetin, May
Wetlands: Status and Trends,
Summary of Wetland
P01nt, MO.
d. 0/den. De,ray Beach FL: St.
R. S. Means Co. ^ statistical" Abstract of the United States
U S Department of Commerce. Lyy*.
1992. Lanham, MD: Bernan Press. Saltmarshes of the Southeast
Wiegert, R. G. and B. J J^^^^u ll^artment of the Interior,
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Southeast, Region Compensation Costs
12
APPENDIX A: ANALYSIS OF CO VARIANCE TABLES '• v
The following analysis of covariance tables provide statistical details for
the conclusions presented in the main text. All analyses were performed on
Iog10-transformed data. The tables show partial sums of square and F ratios,
testing the hypothesis that the particular source of variation is associated with
more of the variability in cost among projects than can be accounted for by
chance.
Table A.I. Analysis of Covariance Based on the Primary Data Comparing
Southeastern Wetland Projects and Projects from other Regions
of the Country.
ANCOVA Table
^•M^MMM
Source
Mean
Square
37.0243
9.3560
13.7319
7.5576
1.9098
2.8030
7.5576
3.8196
2.8030
Log(Size)
Project Type
Region
10.9833
16.7383
27 7216
Parameter Estimates
Least Sq
Mean
43 (20 SE)
11 (OSE)
34 (5SE)
0.06929
0.15439
0.09070
Creation
Enhanced
No estimable interaction terms were statistically significant, so the]
Note:
Table A 2 Analysis of Covariance Based on the Secondary Data Comparing
Southeastern Wetland Projects and Projects from other Regions
of the Country.
Model
Error
2
394
396
52.09404
203.59401
255.68806
26.0470
0.5167
50.4068
0.0000
Parameter Estimates
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