ECONorthwest Work
Using Incentives to Promote Green Stormwater Practices
Presentation from Apr. 21, 2009
Oregon ACWA Stormwater Summit
Low-Impact Development Economics
Presentation from Oct. 22, 2008
NEMO University-6
NEMOnomics: Making Friends with Economics
Presentation from Oct. 22, 2008
NEMO University-6
The Economics of Low-Impact Development: A Literature Review
Related Resources
Low Impact Development by Many Names:
The following are common terms used to describe the LID approach to stormwater management:
- Sustainable Stormwater Management
- Stormwater Best Management Practices
- Sustainable Urban Drainage
- Water-Sensitive Urban Design
- Bioretention
- Natural Drainage Systems
- Green Infrastructure
- Conservation Development
- Integrated Micro-Scale Stormwater Management
- Source Control Practices
Low-Impact Development
ECONorthwest applies economic analysis to better understand the benefits of low-impact developments.
Most conventional or end-of-pipe stormwater-management systems channel stormwater quickly and efficiently away from development and into combined stormwater-sewer systems, to detention ponds, or to receiving bodies of water. Unintended consequences of these conventional systems include increased frequency and magnitude of flooding events and increased pollution of natural waterways. Low-Impact Development (LID), in contrast, emphasizes stormwater-management methods that mimic drainage and flow patterns that existed prior to development. In general, LID retains more stormwater where it falls, which promotes infiltration and increased filtration. This process helps cleanse stormwater and releases it slowly into receiving bodies of water, reducing the risk of flooding and improving water quality.
Researchers report that LID can effectively manage stormwater, and in many situations, the cost of implementing LID compares favorably with the cost of installing conventional stormwater systems. Such studies, while informative, ignore variations in benefits; conventional systems rarely provide benefits beyond transporting stormwater, so cost-effectiveness studies of alternative and conventional systems serve well. However, since LID typically provides ecosystem services and associated economic benefits beyond managing stormwater, cost-effectiveness studies are ill-suited to comparing conventional systems and LID. Benefit-cost analysis, in contrast, facilitates a complete evaluation of alternatives as both the benefits and costs of the alternatives vary.
The range of ecosystem services and associated economic benefits generated by LID that could be included in a benefit-cost analysis include:
- Controlling sediment and pollutants before they reach water-treatment facilities, which can help reduce filtration costs.
- Absorbing stormwater on-site, which can help increase aquifer recharge, and reduce flooding and associated flood damage.
- Absorbing stormwater that would otherwise flow to a conventional stormwater system, which will free-up capacity in and extend the life of the conventional system. LIDs that absorb stormwater can also help reduce the frequency and severity of CSO events.
- Providing additional green space, which has amenity value and may increase property values.
- Reducing the urban heat-island effect with more trees and vegetation, which can reduce cooling costs in summer.
Identifying and measuring the full range of benefits and costs of LID and conventional systems can be challenging. This challenge, however, is not peculiar to evaluating LID and conventional systems. Economists have wrestled with this problem for many years and cataloged their efforts, successes, and remaining challenges in the literature. Many have concluded that it is better—more accurate, more informative, and more useful to decision makers and stakeholders—to describe and measure costs and benefits to the extent possible, than to exclude from an analysis the benefits or costs that are difficult to measure.
2nd National Low Impact Development Conference
ECONorthwest economist Ed MacMullan spoke on this topic at the 2nd National Low Impact Development Conference, which was held March 12-14, 2007 in Wilmington, North Carolina. For more information, visit the conference website, read the expanded abstract of the talk, and view the presentation "Assessing Low Impact Developments Using a Benefit-Cost Approach."