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Restoring wetlands may help to control floods, but their other values complicate the picture.

November 1, 2001


Douglas Clement Senior Writer

In 1997, on the east side of St. Paul, Minn., heavy construction equipment roared into an abandoned shopping center built years before on top of an old bog—part of the Mississippi River's watershed—and began knocking down concrete and tearing up blacktop. Later, workers built a pond and school kids planted wildflowers. Eventually, cattails took over drug dealer territory, and the blighted strip mall slowly devolved into a pastoral wetland. As if playing a Joni Mitchell song in reverse, the optimistic citizens of St. Paul had taken a parking lot and put up a paradise.

And this, say some, is the future of flood control.

1996—A parking lot ...
Photo-1996 parking lot
1997— becomes a wetlands restoration project ...
photo-1997 wetlands restoration project
2001— and is now Ames Lake.
photo-2001 Ames Lake

From Strip Mall Parking Lot to Restored Wetlands
On the east side of St. Paul, Minn., the Phalen Corridor Initiative, a coalition of local community groups, along with private and public partners have restored seven acres of wetland. The mall parking lot and most of the buildings were removed.

The St. Paul effort is one of many current ventures to restore what once were wetlands—marshes, bogs and similar areas, often defined as land that is inundated by water at least twice a year. Until recently, humans regarded wetlands as wastelands without value, economic or otherwise. But in the 1960s, scientists began to conclude that wetlands destruction had contributed to flooding problems and also threatened water quality and survival of plant and wildlife species. Restoring wetlands, they argued, could serve a number of important functions simultaneously: flood control, water filtration, aquifer recharging and habitat restoration. And as in St. Paul, the advocates said, wetlands restoration could also create value by eliminating eyesores and strengthening a community—public goods not easily measured in dollars.

Over the past decade, as they've been promoted by environmentalists, subsidized by government and endured by developers, wetlands restoration programs have gained ground, despite recent setbacks including weakened federal regulations and threats of funding cutbacks. The degree to which they actually mitigate flooding remains unsettled, but many observers believe that even if wetlands aren't the complete flood control solution, their ancillary benefits may well justify the effort and funds expended.

Draining experience

Wetlands might be considered little Edens these days, but in the 1800s, people called them swamps and viewed them—accurately—as a source of mosquitoes and disease. Water-laden lands were eliminated as quickly as possible. Urban developers created level building sites by trimming hilltops and filling in low-lying bogs. Farmers seeking more tillable acres drained their potholes. Geologists estimate that by the 1980s, wetland area in the United States had decreased to 53 percent of what it had been in the 1780s.

In many Ninth District states depletion rates were higher. Wisconsin's Department of Natural Resources (DNR) estimates a loss of over half the state's original wetlands. Minnesota eliminated about 11 million wetland acres over the last century, leaving about 7.5 million, nearly a 60 percent loss. "In the Red River Valley," said Dexter Perkins, a geologist at the University of North Dakota in Grand Forks, "we probably have 10 percent of our original wetlands that are actually functioning the way they were before the white man got here. It is astonishing."

Restoration efforts

This massive destruction of wetlands eliminated a natural pressure relief valve for seasonal variations in river water levels, according to hydrologists. Without the natural "sponge" effect of wetlands, floodplains could no longer absorb sudden downpours and rivers would overflow their banks. For this and other reasons, scientists began to advocate wetlands restoration. In 1989, President George Bush called for a "no net loss" wetlands policy which mandated that any lands drained for development had to be replaced with new wetland acreage elsewhere.

In addition, several U.S. Department of Agriculture programs encouraged farmers to take lands out of production and restore them as wetlands. The Wetlands Reserve Program has enrolled over 1 million acres nationally, paying farmers for permanent or 30-year easements for wetlands on their property. Ninth District states account for 129,934 of those acres, ranging from 6,988 enrolled acres in North Dakota to 30,544 acres in Wisconsin.

In June 2001, the USDA announced a separate initiative, the Farmable Wetlands Pilot Program, to pay farmers in six Midwestern states to restore up to 500,000 acres of wetlands, including 100,000 acres each in Minnesota, North Dakota and South Dakota, and 25,000 acres in Montana.

Some Ninth District states have taken independent measures to protect and restore wetlands. Minnesota, for example, passed the Wetland Conservation Act in 1991 to give local shape to the federal "no net loss" mandate, and the Legislature has regularly appropriated funds to match federal monies for wetlands restoration. Wisconsin lawmakers passed a wetlands bill, effective August 2001, which calls on the DNR to establish guidelines for compensation when wetlands are developed.

New developments

But the wetlands restoration movement is not without opposition. Urban development continues to impinge on wetlands and farmers still seek good drainage.

In Pope County, Minn., for example, farmers are planning a 5.7-mile drainage ditch at a cost of nearly half a million dollars, but the Minnesota Center for Environmental Advocacy has sued the county, claiming the ditch will adversely affect wetlands and contribute to flooding. "[Wetlands] help hold water on the land," said Janette Brimmer, an attorney with the center. "I have a feeling that Montevideo and Granite Falls—both of which are downstream of this drainage project—would prefer not to have it drain off the land quite so quickly."

In August, a similar lawsuit prevented manufacturers from expanding into wetlands in Trempealeau and Dunn counties in Wisconsin.

For a landowner—and an economist—wetlands restoration raises difficult questions of value. Is an acre worth more in soybeans or swamp grass? Society in general may give high value to a wetland—for its flood retention capacity, water cleansing ability or waterfowl habitat—but the farmer or other landowner probably won't agree to that use unless compensated. Negotiating that compensation has often been a politically painful process as environmentalists, farmers, developers and government officials argue over the worth of a given acre of wetland.

"Wetlands aren't free," noted Steven Taff, an economist at the University of Minnesota, who has advised the state Legislature on wetland valuation. "It's not free to society to create them or to keep them. To create a wetland, or to preserve it, [you have to] buy out—or take through zoning—the rights to do everything else that might yield more money." For lands in remote areas, such rights may be cheap, but acres elsewhere could return a crop, or a housing development. "So you've got to pay for that right," said Taff.

And President George W. Bush seems less willing to do so. His budget proposals—largely supported by Congress—cut funding to the Wetlands Reserve Program by $189 million. Other recent actions contribute to the impression that wetlands restoration faces an uphill battle. In August, the Army Corps of Engineers formally proposed to weaken several wetlands regulations. The National Academy of Sciences reported in June that government agencies and private developers have failed to implement the "no net loss" wetlands policy. And in January the Supreme Court ruled that wetlands not directly connected to other water bodies aren't protected by Clean Water Act regulations restricting their development.

But do they stop floods?

The key reason to save wetlands, say many advocates, is to preserve their role in flood control. "The best way to protect families from flooding is to protect wetlands and floodplains from development," said Brett Hulsey of the Sierra Club. "Wetlands act like sponges to store floodwater, filter drinking water and provide homes for fish and wildlife." Donald Hey, a hydrologist with the Wetlands Initiative, estimates that restoration of half of the original wetlands in the Upper Mississippi River basin would have soaked up much of the 1993 Midwest flood.

But others aren't so sanguine. "If you're looking at a basinwide type of a flood reduction measure, typically [wetlands restoration] does not make that much difference," said David Loss, an engineer in the Army Corps of Engineers St. Paul office. Wetland water storage can reduce flooding immediately downstream, but effects on the broader watershed are modest, he said. "So there is a place for [wetlands restoration], but to say that it's going to be a cure-all, well, it's dangerous to go down that path."

The bottom line: Hydrology is complex. In any given flood, wetlands will absorb some water and diminish flood peaks, but they're more likely to attenuate a serious flood than prevent it. Wetlands restoration might also limit flood damage by keeping humans and their property off the floodplain in the first place. Reasons enough to restore them, perhaps.

Other bottom lines

Full economic justification for wetlands restoration, though, will likely depend not on their flood control capacity alone, but on the other roles wetlands serve. "One of the values of wetlands is their ability to reduce flooding," observed economist Taff. "But probably the bigger numbers associated with wetland values are things like habitat, and possibly amenity values. What we found in urban areas, [is that] people just like living near wetlands. They'll pay extra. There's an economic value there." Indeed, Wild Meadows, a new housing development in Medina, Minn., will charge homeowners a $1,000 annual fee to fund an ecologist to maintain 200 acres of wetlands, woods and native prairie that will serve as backdrop for the luxury homes, priced at $500,000 and up.

Wetlands' role as habitat for game fish and fowl provides prime value for recreational interests, and the so-called rods and bullets lobby has played a significant role in wetland conservation advocacy at state and federal levels. The environmentalists' lawsuit against Pope County's drainage ditch, in fact, is co-sponsored by the Minnesota Waterfowl Association, a key proponent of the state's Wetland Conservation Act.

Wetlands also play a significant role in purifying water and replenishing aquifers, values that are hard-to-measure public goods. "These ecosystem values are real," noted Ohio State University economists William Mitsch and James Gosselink in a recent article, "but their quantification is difficult and the benefits are generally regional and less specific to individual land owners."

Ultimately, therefore, while wetlands will likely remain in the arsenal of flood policy, their higher economic value—and the fuller justification for their restoration—may in fact derive not from their flood control benefits, but from their roles as water purifiers, wildlife habitats or urban amenities for people who, like those in St. Paul, would rather look at frogs than shopping carts.


Douglas Clement
Senior Writer

Douglas Clement was a managing editor at the Minneapolis Fed, where he wrote about research conducted by economists and other scholars associated with the Minneapolis Fed and interviewed prominent economists.