BP oil disaster threatens goods and services worth far more than BP’s value - Study

June 10th, 2010 - 10:30 pm ICT by BNO News  

BATON ROUGE, LOUISIANA (BNO NEWS) - The BP oil disaster, hurricanes and wetlands loss threaten a net value of $330 billion to $1.3 trillion in natural system goods and services, according to the first study of the Mississippi River Delta as a capital asset released on Thursday.

Even the low end estimate of the Delta’s value exceeds BP’s market capitalization before the oil disaster on April 20 of $189 billion. The study was completed shortly before the spill.

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.

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.

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.

“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,” said coauthor David Batker.

The report examines three future scenarios: continued wetland loss, minor wetlands restoration efforts and a major wetlands restoration. The study shows that large-scale wetlands restoration is a good financial investment for the Gulf region and the nation, bringing in an annual net benefit of $62 billion, by producing benefits with an estimated present value of at least $21 billion and avoiding $41 billion in damages.

For example, for about every 2.5 miles of wetlands, one foot of a hurricane storm surge is removed. 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.

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