We are estimating the economic value from natural and nature-based infrastructure investments to stabilize coastline. Using hazard risks along the U.S. Pacific Northwest coast, we are assigning a dollar value to ecosystem services lacking a market price. Specifically, we are applying three ecosystem service valuation methodologies (revealed preference hedonic modeling, stated preference choice experiment, dynamic bio-economic modeling) to estimate potential benefits of natural infrastructure.

Why We Care
Ecosystems provide services to people; their use alters the flow of services leading to benefits and costs. At all levels of government, from federal agencies to townships and counties, decision makers responsible for environmental and natural resource planning and management are asked to account for the costs and benefits of proposed actions. Estimates of the economic values of environmental services are a valuable part of environmental management decisions. Once considered unquantifiable, perhaps unimportant, and outside the realm of economic analysis, the valuation of ecosystem services is now central to policy decisions. The natural and nature-based features that make up natural “infrastructure” are attracting increased interest in ecosystem management, and, as such, require an accounting of costs and benefits.

What We Are Doing
We are developing tools that allow managers to use a cost-effective approach for designing natural infrastructure projects that provide a high return of investment across ecological and economic scales. Our project addresses the primary question: How do we allocate coastal natural infrastructure investments that provide ecosystem services efficiently? In other words, how do we prudently budget for nature-based investments in coastal ecosystems?

We are using three methodological tracks as indirect measures of economic value. Track I focuses on estimating willingness-to-pay for protection services related to any type of coastal infrastructure improvement by analyzing coastal housing market data. Track II uses extensive choice experiment surveys to estimate willingness-to-pay for ecosystem service benefits that accrue as public good benefits to a wide variety of coastal and non-coastal residents. Track III develops natural infrastructure investment models to analyze how natural infrastructure placement can maximize the net present value of ecosystem services.

The three methodological tracks are applied to four pathways:

• Coastal Protection: How do coastal housing markets respond to different coastal land forms, different types of risk, and the ability to invest in protection? Does willingness-to-pay differ for protective services based on the type of risk (i.e., chronic or acute), or the infrastructure used (i.e., riprap, dynamic revetment, or dunes)?
• Dune Habitat: What is the role of coastal dunes and vegetation in mitigating coastal risk?
• Estuary: Dike removal – How does the value of an acre of restored salt marsh (long-term benefit) compare to the value of diked agricultural land (short-term cost)?
• Coastal Land Use: How can natural infrastructure be optimally allocated within coastal communities, accounting, for example, the value of tsunami evacuation facilitation? What land use policy decisions in the area of natural infrastructure can make coastal communities more resilient against those risks?

The project, led by Dr. Steven Dundas of the Department of Applied Economics at Oregon State University, includes an internal oversight team that is evaluating the progress of the project. A management transition board representing agency partners provides advice to the project team on science direction and sources of expertise. Board members bring back to their agencies timely information to support decision making.

Project partners include the U.S. Fish and Wildlife Service, the U.S. Army Corps of Engineers, the Oregon Department of Fish and Wildlife, the Oregon Department of Geology and Mineral Industries, the Oregon Parks and Recreation Department, NOAA's Northwest Fisheries Science Center, NOAA's Alaska Fisheries Science Center, and Oregon Sea Grant.

Benefits of Our Work
“Knowledge Action Networks”—place-based groups composed of state and local managers and stakeholders (e.g., Tillamook County Coastal Futures Project)—provide on-the-ground advice to help implement the project's findings. These networks are tailored specifically to each of the four project pathways as appropriate. One member of each network is appointed to the management transition board to provide end-user perspectives at annual meetings.