Ten Things You Need to Know About the Restoration Economy

This is adapted from a piece that first ran in Ecosystem Marketplace.

As Florida recovers from Hurricane Irma, forward-thinking mayors there are looking to cities like Hoboken, NJ, for guidance. After Hurricane Sandy, that city started restoring marshes and turning vacant land into a resiliency park that will mop up at least one million gallons of floodwater. In so doing, it became part of a $25 billion restoration economy that directly employs 126,000 people and supports 95,000 other jobs mostly in small businesses. Thats more jobs than logging, more than coal mining, and more than iron and steel, as you can see here:

The restoration economy evolved slowly over the past 40 years as states from New York to Colorado to California realized it was often more efficient to restore natural systems that protect coasts and manage water than it was to build substitutes from concrete and steel. The city of New York, for example, has long saved money on water filtration costs by paying farmers in the Catskills to restore natural grasses that absorb farm runoff, while the city of Denver is funneling water utility fees into forests that store and filter water, and California uses meadows and streams to filter and store the water that feeds into its famous aqueducts.

Closer to hurricane territory, the state of Texas is home to one of the country's largest for-profit restoration projects , while studies have shown that Louisiana can earn billions by restoring its coastal mangroves or lose multiples of that by letting them die.

Some of the most innovative thinking on restoration economics comes from hurricane territory, but political leaders there have been slow to adopt the recommendations.

Here are 10 things you need to know to understand the restoration economy:

1. Its not Solar and Wind

The restoration economy is not to be confused with the renewable energy boom that employs 374,000 people in solar parks and 101,738 on wind farms. Like those, however, the restoration economy is part of a burgeoning green economy thats transforming forests, farms, and fields around the world.

2. Its Government-Driven

State and federal governments helped the wind and solar sectors get off the ground, but both of those sectors are humming along on their own now because they provide a cost-effective way to produce electricity, which everyone needs.

The demand for restoration, however, isnt that automatic, because most companies and even some landowners wont clean up their messes without an incentive to do so.

Economists call these messes externalities because they are internal responsibilities that are dumped on the external world. Governments are created in part to deal with externalities traditionally through command-and-control regulation, but also through systems that let polluters either fix their messes or create something as good or better than what they destroy.

Under the Endangered Species Act, for example, a local government that wants to build a road through sensitive habitat can petition the Fish and Wildlife Service for permission to do so. If permission is granted, it still has to make good by restoring degraded habitat in the same region.

3. Its Often Market-Based

Pioneered in the 1960s, environmental markets offer flexibility in meeting commitments. That local government mentioned above, for example, can either restore the land itself, or it can turn to a conservation bank .

These are usually created by green entrepreneurs who identify marginal land and restore it to a stable state that performs ecosystem services like flood control or water purification. Conservation banks make money by selling credits to entities personal, public, or private that need to offset their environmental impacts on species, wetlands or streams.

At least $2.8 billion per year flows through ecosystem markets in the United States, according to Ecosystem Marketplace research.

4. Infrastructure Also Drives Restoration

The federal government especially the military holds itself to high environmental standards , as do many states. Government activities alone support thousands of restoration jobs.

Government agencies are big buyers of credits, often because they need to offset damage caused by infrastructure projects.

The link between infrastructure and restoration, however, goes even deeper than that. In Philadelphia, for example, restoration workers are using water fees to restore degraded forests and fields as part of a plan to better manage storm runoff . In California, meadows and streams that control floods are legally treated as green infrastructure , to be funded from the infrastructure money pot. Green infrastructure , it turns out, is prettier than concrete and lasts longer to boot.

5. Markets Can Reduce Regulations

Nature is complex, and rigid regulations often fail to address that complexity. Environmental economist Todd BenDor, for example, points to well-intentioned regulations that require the placement of silt fences in new subdivisions along waterways.

Theyre supposed to prevent erosion, but they often fail or are put in the wrong places, he says. Markets can simply enact a limit on erosion, allowing the landowner the freedom to be creative and efficient in any way they see fit in order to meet that limit.

Done right, environmental markets can replace overly prescriptive regulations, but they still require government oversight and regulation.

Markets are entirely reliant on strong monitoring, verification, and enforcement of limits, says BenDor. Provisions must be made to ensure that, but in reality its often a problem.

6. Restoration Stimulates Rural Economies

In 2015, BenDor published a study called Estimating the Size and Impact of the Ecological Restoration Economy , which found restoration businesses in all 50 states. California had the most, but four Red states filled out the top five: Virginia, Florida, Texas, and North Carolina. Last place went to North Dakota.

By their very nature, restoration projects are located in rural areas, and a study by Cathy Kellon and Taylor Hesselgrave of EcoTrust found that Oregon alone had more than 7,000 watershed restoration projects, which generated nearly 6,500 jobs from 2001 through 2010. Many of those jobs went to unemployed loggers.

The jobs created by restoration activities are located mostly in rural areas, in communities hard hit by the economic downturn, report authors wrote. Restoration also stimulates demand for the products and services of local businesses such as plant nurseries, heavy equipment companies, and rock and gravel companies.

7. Its been Mapped

Last year, the US Department of Agricultures Office of Environmental Markets, together with Ecosystem Marketplace publisher Forest Trends and the Environmental Protection Agency, published an online Atlas of Ecosystem Markets, which you can access here .

8. The Jobs are Robot-Proof

Environmental regulations didnt kill coal; natural gas and renewables did. Regulations didnt stifle the western oil boom, either; that was low energy prices. Even if Trump & Co do prop the coal sector, jobs wont go to people; theyll go to machines, which took most of the jobs America lost in the last decade.

BenDors research shows restoration jobs are evenly divided between white-collar planners, designers, and engineers and the green-collar guys doing the actual earth moving and site construction.

Almost all involve time in the great outdoors, and they cant be exported or done by robots.

9. The Jobs are Cost-Effective

Because restoration work is labor-intensive, the money goes to people instead of machines, and every $1 million invested generates 33 jobs on average . Every $1 million invested in oil, on the other hand, generates 5.2 jobs per $1 million invested. In coal, the figure is 6.9 jobs .

10. It Doesnt Stifle Business

Some industry groups claim the Endangered Species Act blocks development, but researchers reviewed 88,000 consultations between 2008 and 2015 and found that no projects had been stopped or even changed in a major way to protect habitat.