Reducing Coastal Risk on the East and Gulf Coasts (2014)

Summary

Hurricane- and coastal-storm-related economic losses have increased substantially over the past century, largely due to expanding population and development in the most susceptible coastal areas. Eight U.S. cities (Miami, the New York-Newark region, New Orleans, Tampa-St. Petersburg, Boston, Philadelphia, Virginia Beach, and Baltimore) rank among the world’s top 20 in terms of estimated potential average annual losses from coastal flooding. Hurricanes Sandy (2012) and Katrina (2005) recently raised awareness of this vulnerability. Climate change poses additional threats to coastal communities. Climate projections suggest possible increases in the strength and frequency of the most intense hurricanes, and sea-level rise will increase the likelihood of major flood events.

Concurrent with the growth in economic losses from natural hazard, there has also been a substantial shift in the source of funds used to cover these losses in the United States. Over the past 60 years, the federal government has assumed an increasing proportion of the financial responsibility associated with coastal storms. This trend highlights the challenges ahead, particularly if federal post-disaster relief discourages state and local governments from taking appropriate actions to reduce risk and enhance resilience.

A wide array of strategies exists for managing coastal storm risks. One set of strategies aims to reduce the probability of flooding or wave impact. These include hard structures, such as seawalls, levees, flood walls, and storm surge barriers, and nature-based risk reduction strategies, such as beach nourishment, dune building, and restoration or expansion of natural areas, such as oyster reefs, salt marshes, and mangroves.

Another set of strategies aims to reduce the number of people or structures in areas at risk or to make them less vulnerable to coastal storms. These include design strategies, such as elevating or floodproofing buildings, and “nonstructural strategies,” such as relocation and land-use planning to steer future development or redevelopment away from high hazard areas. Over the past century, most coastal risk management programs have emphasized coastal armoring, while doing little to decrease development in harm’s way.

This study was undertaken as part of a broad five-year effort to provide advice to the U.S. Army Corps of Engineers (USACE) on a range of scientific, engineering, and water resources planning issues. It examines risk reduction strategies to address coastal storms (hurricanes, tropical storms, and extratropical storms) and associated storm surges, focusing on the East and Gulf Coasts where large coastal storms predominantly occur, and the report outlines principles to guide future U.S. investments in such strategies (see Box S-1 for the statement of task). Other coastal hazards, such as erosion from mild or moderate storms, wind damage, or tsunami-induced flooding, are not considered in depth.

This report calls for the development of a national vision for managing risks from coastal storms (hereafter, termed “coastal risk”) that includes a long-term view, regional solutions, and recognition of the full array of economic, social, environmental, and life-safety benefits that come from risk reduction efforts. To support this vision, a national coastal risk assessment is needed to identify those areas with the greatest risks that are high priorities for risk reduction efforts. Benefit-cost analysis, constrained by other important environmental, social, and life-safety factors, provides a reasonable framework for evaluating national investments in coastal risk reduction. However, extensive collaboration and additional policy changes will be necessary to fully embrace this vision and move from a nation that is primarily reactive to coastal disasters to one that invests wisely in coastal risk reduction and builds resilience among coastal communities.

LANDSCAPE FOR COASTAL RISK MANAGEMENT

The committee’s review of the institutional landscape as it relates to federal, state, and local coastal risk reduction efforts (Chapter 2) resulted in the following conclusions.

Responsibilities for coastal risk reduction are spread over a number of federal, state, and local agencies, with no central leadership or unified vision. Multiple federal agencies play some role in coastal risk management, and each agency is driven by different objectives and authorities. No federal coordinating body exists with the singular focus of mitigating coastal risk, although several efforts are under way to increase coordination.

The lack of alignment of risk, reward, resources, and responsibility as it relates to coastal risk management leads to inefficiencies and inappropriate incentives that serve to increase the nation’s exposure to risk. Developers, builders, and state and local governments reap the rewards of coastal development but do not bear equivalent risk, because the federal government has borne an increasing share of the costs of coastal disasters. The resulting

moral hazard leads to continued development and redevelopment in high-hazard areas.

The vast majority of the funding for coastal risk-related issues is provided only after a disaster occurs, through emergency supplemental appropriations. Pre-disaster funding for mitigation, preparedness, and planning is limited, and virtually no attention has been given to prioritization of coastal risk reduction expenditures at a regional or national scale to better prepare for future disasters. Thus, efforts to date have been largely reactive and mostly focused on local risks, rather than proactive with a regional or national perspective. Also, although the federal government encourages improved community resilience, only a small fraction of post-disaster funds are specifically targeted toward mitigation efforts.

Few comprehensive regional evaluations of coastal risk have been performed, and the USACE has no existing institutional authority to address coastal risk at a regional or national scale. Given the enormous and rising cost of coastal disasters within the United States, improved systemwide coastal risk management is a critical need within the federal government. Under the current planning framework, the USACE responds to requests at a local level on a project-by-project basis, and several major urban areas remain at significant risk. Congressional authorization and funding would be needed for the USACE to undertake a comprehensive national analysis of coastal risks.

PERFORMANCE OF RISK REDUCTION STRATEGIES

Chapter 3 reviews what is known regarding the proven performance, costs, and benefits of hard structures and nature-based strategies to reduce the hazards (e.g., flooding, wave attack) associated with coastal storms and nonstructural and building design measures to reduce the consequences of coastal hazards. Determination of the optimal coastal risk reduction will be site-specific and dependent on an analysis of long-term costs, benefits, and environmental impacts and may involve multiple approaches implemented together.

Beach nourishment and dune-building projects for coastal risk reduction can be designed to provide increased ecological value. Beachfill projects provide some level of risk reduction for coastal infrastructure from erosion, flooding, and wave attack and may reduce the likelihood of forming new inlets. Beach nourishment and dune building do not, however, address back-bay flooding, which may be better addressed by structural measures on the bay side. The short-term environmental impacts of nourishment projects on biological communities is significant, and long-term cumulative ecological implications remain unknown because of the difficulty and cost of mounting large scale monitoring projects and the limited time frame of

existing studies. Coastal systems can be managed for multiple uses and benefits, although some compromises may be necessary to optimize benefits across a range of objectives. Improvements for ecological benefits of beach nourishment and dune construction would involve different design specifications that are unlikely to greatly increase construction costs, although they may require alternative approaches to post-construction beach and dune management.

Sediment management should be viewed on a regional basis, rather than on a project-by-project basis. Federal and state agencies have documented plentiful offshore sand deposits for beach nourishment, but not all are of optimal quality or conveniently located to project needs, which could increase costs. Coastal projects can minimize sediment losses by retaining dredge material or emphasizing reuse, as in sand backpassing or bypassing operations. Use of a sediment source that is compatible with a beachfill project site also decreases ecosystem recovery time and enhances habitat value in the nourished area.

Conservation or restoration of ecosystem features such as salt marshes, mangroves, coral reefs, and oyster reefs provides substantial ecological benefits and some level of risk reduction against coastal storms, but the risk reduction benefits remain poorly quantified. Coastal habitats provide numerous ecosystem services, including carbon sequestration, improved water quality, and essential habitat for fish species targeted by commercial and recreational fisheries. Much is known about the capacity of nature-based features to reduce coastal erosion from smaller storms, but additional research is needed to better understand and quantify the effects of natural features (other than beaches and dunes) on storm surge, wave energy, and floodwater inundation. In general, the level of risk reduction provided by oyster reefs and seagrasses appears much lower than that provided by constructed dunes and hard structures, and most of the benefits are associated with reductions in wave energy during low- to moderate-energy events. Research has documented reductions in peak water levels from salt marshes and mangroves, but certain storm conditions and large expanses of habitat are needed for these to be most effective. Thus, many of these nature-based alternatives can only be used for coastal risk reduction at locations that have sufficient space between developed areas and the coastline. Additional quantitative modeling and field observation are needed to better understand and quantify the efficacy of nature-based approaches for coastal risk reduction.

Hard structures are likely to become increasingly important to reduce coastal risk in densely populated urban areas. Many large coastal cities lack the space necessary to take advantage of nature-based risk reduction approaches alone and will instead need additional hard structures to substantially reduce coastal hazards. Adverse environmental impacts commonly

accompany the construction of hard structures, although modified designs are possible to reduce these effects. Coupling nature-based approaches with hard structures to buffer the structures against wave attack provides an effective coastal risk reduction strategy if space allows.

Strategies that reduce the consequences of coastal storms, such as hazard zoning, building elevation, land purchase, and setbacks, have high documented benefit-cost ratios, but they are given less attention by the federal government and are viewed as difficult to implement by states. Studies have reported benefit-cost ratios between 5:1 and 8:1 for nonstructural and design strategies that reduce the consequences of flooding, but between 2004 and 2012, federal funds for such strategies were only about 5 percent of disaster relief funds. Those nonstructural and design strategies that are commonly implemented, such as public information campaigns and elevation of in situ development, tend to avoid property rights issues, do not threaten economic interests, and do not generate political opposition.

PRINCIPLES FOR GUIDING INVESTMENTS IN COASTAL RISK REDUCTION

Investments in coastal risk reduction generate significant benefits to society by reducing risk to people and property, but they also involve significant costs. Chapter 4 reviews two approaches for determining what investments in coastal risk reduction are justified: (1) a risk-standard approach and (2) a benefit-cost approach. The risk-standard approach recommends investments in coastal risk reduction measures to achieve an acceptable level of risk reduction, and develops cost-effective strategies to meet this level. The benefit-cost approach recommends investment in coastal risk reduction when the benefits of the investment exceed the costs. Thus, the level of risk reduction provided by projects under a benefit-cost approach could vary widely based on the costs and benefits provided. While each approach has considerable appeal, each also has at least one significant weakness. For the risk-standard approach it is difficult to factor in non-risk-related benefits or costs, such as environmental benefits. In the case of the benefit-cost approach, it is difficult to evaluate all environmental and social impacts in monetary terms. Given the limitations with each approach, there are advantages of not rigidly adhering to either approach in its purest form but instead incorporating some elements from each.

Benefit-cost analysis constrained by acceptable risk and social and environmental dimensions provides a reasonable framework for evaluating coastal risk management investments. Investments in coastal risk reduction should be informed by net benefits, which include traditional risk reduction benefits (e.g., reduced structural damages, reduced economic disruption) and other benefits (e.g., life-safety, social, and environmental benefits),

minus the costs of investment in risk reduction and environmental costs. However, because it is difficult to quantify and monetize some benefits and costs, it is important to expand the analysis to include considerations of difficult-to-measure benefits or costs through constraints on what is considered acceptable in social, environmental, and risk reduction dimensions. Such unacceptable levels of risk may include a level of individual risk of fatality, the risk of a large number of deaths from a single event, or adverse impacts on social and environmental conditions that may be difficult to quantify in monetary terms. It is difficult, however, to establish societally acceptable risk standards and requires extensive stakeholder engagement. Setting such a standard requires value judgments, on which not all individuals or groups will necessarily agree.

The recently updated federal guidance for water resources planning—the 2013 Principles and Requirements for Federal Investments in Water Resources¹—provide an effective framework to account for life safety, social impacts, and environmental costs and benefits in coastal risk reduction decisions. The Principles and Requirements, developed by the White House Council on Environmental Quality in response to a 2007 congressional mandate, represent the first steps toward federal water resources policy reform. The document, which applies to water resources investment decision making across the federal government—not just within the USACE—recognizes that water resources investment decisions should also consider social and environmental impacts and not give primacy to benefits or costs that are easily measurable in monetary terms. This represents a significant improvement upon current USACE planning, which uses separate accounts for social and environmental impacts, with largely qualitative measures, effectively relegating such considerations to second-class status behind net economic benefits. Progress has been made on measuring improvements in economic terms and on measuring the value of some ecosystem services and social benefits. For other environmental and social factors that are not easily measured in dollar terms, the Principles and Requirements recognize that these costs and benefits should also be given adequate weight in decision-making. The Council on Environmental Quality should expedite efforts to complete the detailed accompanying guidelines for implementing the 2013 Principles and Requirements, which are required before this framework can to be put into action to improve water resources planning and coastal risk management decision making at the federal agency level.

Until the updated guidelines to the Principles and Requirements are finalized, there are steps the USACE could take to improve consideration of multiple benefits and costs in the current decision process. Specifically, further attempts in the USACE planning process could be made to more

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¹See CEQ (2013).

quantitatively consider information about social and environmental effects. For example, work that has been done on how to value ecosystem services could be used to value some environmental quality benefits. Once quantified, these costs and benefits should be rigorously considered and clearly communicated to stakeholders. Such an approach could result in different decision outcomes if the additional social and environmental benefits make certain strategies more acceptable to local sponsors and stakeholders than others. However, trying to quantify or monetize social effects and some environmental effects remains challenging. When only some benefits or costs are monetized, there is a tendency to overlook or downplay nonmonetized benefits or costs, and additional attention and/or institutional mechanisms are needed to ensure that these benefits are given adequate weight.

There is no solid basis of evidence to justify a default 1 percent annual chance (100-year) design level of coastal risk reduction. The 100-year flood criterion used in the National Flood Insurance Program was established for management purposes, not to achieve an optimal balance between risk and benefits. There is also no evidence that reducing risk to a 1 percent annual-chance event is in the best interests of society or that this level is necessarily acceptable to the general public. This level of risk reduction may be appropriate in some settings, unwarranted or excessive in others, and inadequate in highly developed urban areas. Such decisions should, instead, be informed by risk-constrained benefit-cost analyses reflecting site-specific conditions.

VISION TOWARD COASTAL RISK REDUCTION

To address the rising costs of coastal disasters, increasing coastal risks in the context of climate change, and the fragmented risk management framework, Chapter 5 presents the committee’s recommendations for reducing the nation’s coastal risks.

A national vision for coastal risk management is needed in order to achieve comprehensive coastal risk reduction. Effective coastal risk management for the United States requires a national perspective to achieve the most benefits from federal investments and regional solutions, rather than piecemeal, project-by-project approaches. Coastal risk management requires a long-term vision, recognition of the wide array of potential benefits, and coordination of efforts that are currently spread across many agencies that sometimes operate under conflicting mandates. Developing and implementing a national vision for coastal risk management is not the responsibility of any single agency alone, but will require federal leadership and extensive collaboration among federal, state, and local agencies.

The federal government, working closely with states, should establish national objectives and metrics of coastal risk reduction. Specific metrics

for coastal risk management could be used by state and local governments to identify necessary actions and assess progress.

The federal government should work with states to develop a national coastal risk assessment. The geographic patterns of disaster risk represented by human fatalities, economic losses, and social impacts can illustrate where the risks are greatest and in need of targeted risk reduction interventions. This analysis should not be based merely on the recent history of hazards but on a comprehensive assessment of risk, including multiple types of hazards under current and anticipated future conditions. The results of the risk assessment would serve as a powerful communication tool for the public and local and national decision makers. The national interest in coastal risk reduction may vary from one community to another, but this would not preclude a community from investing in risk reduction efforts. The risk assessment would serve as a basis to assess the economic, life-safety, social, and environmental costs and benefits under various risk management scenarios, although additional model development is needed to fully support such an effort.

Stronger incentives are needed to improve pre-disaster risk management planning and mitigation efforts at the local level. Hazard mitigation and adaptation planning has significant potential to reduce coastal risk, but most state and local mitigation plans are currently poor and give limited attention to land-use strategies. In light of behavioral and cognitive factors associated with low-probability, high-consequence events, additional focused efforts and stronger incentives (or disincentives for inaction) are necessary to improve the quality of these plans and the breadth of nonstructural mitigation strategies considered. For example, the federal government could adjust USACE cost sharing for coastal risk reduction projects according to the extent and quality of local hazard mitigation planning and the degree to which mitigation is incorporated into other local planning efforts (e.g., land use, transportation). The potential for strategic incentives to improve development decisions or facilitate retreat should be carefully examined in the context of long-term cost savings. Federal and state governments should also work to build commitment to coastal risk reduction among stakeholders and local officials.

The USACE should seize opportunities within its existing authorities to strengthen coastal risk reduction. Although the USACE is limited in its capacity to independently initiate national coastal risk reduction strategies under its current authorities, it can use its existing planning framework to rigorously account for social and environmental costs and benefits, thereby supporting a more holistic view of coastal risk management. Additionally, the USACE should increase incentives for sound coastal planning and continue to develop and improve modeling tools to support state and local planning efforts. The USACE should also look for opportunities to apply

adaptive management to enhance learning and improve coastal risk reduction strategies. The USACE should reevaluate its typical 50-year planning horizon and consider longer-term planning in the context of projected increases in sea level to assess the adaptability and long-term costs and benefits (including social and environmental effects) associated with risk reduction alternatives.