United States Department of Agriculture

A report summary from the Economic Research Service

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analysis from the U.S. 

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providing timely information on economic and policy 

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Economic

Research

Service

Economic

Research 

Report 

Number 183

February 2015

United States Department of Agriculture

Targeting Investments To Cost 

Effectively Restore and Protect 

Wetland Ecosystems: Some 

Economic Insights

LeRoy Hansen, Daniel Hellerstein, Marc Ribaudo, 

James Williamson, David Nulph, Charles Loesch, 

and William Crumpton

February 2015

Find the full report 

at www.ers.usda.

gov/publications/erreconomic-researchreport/err183

LeRoy Hansen, Daniel Hellerstein, Marc Ribaudo, James Williamson, 

David Nulph, Charles Loesch, and William Crumpton

Targeting Investments To Cost Effectively 

Restore and Protect Wetland Ecosystems: 

Some Economic Insights

What Is the Issue?

Over the last several decades, concerns over the loss of wetland ecosystems have led to legislation 

restricting wetland conversion and promotion and funding of wetland restoration and conservation. Consequently, USDA has spent more than $4.2 billion on wetland restoration and protection 

during the period. The environmental benefits of wetland conservation—cleaner water, increases 

in wildlife populations, and carbon sequestration—depend on climate, human influences, and 

landscape characteristics. This study assesses how future wetland conservation funding might be 

targeted within States and regions and across the United States to maximize benefits relative to 

costs of restoring and preserving wetlands. Information on the sizes and spatial distributions of 

the benefits and costs of wetland protection can help public and private decisionmakers understand the economic implications of efforts to reduce wetland losses, improve existing wetlands, 

and restore prior-existing wetlands through regulation and economic incentives. 

What Did the Study Find?

A number of different types of wetland benefits were considered as part of this analysis. The 

ranges in wetland benefits and costs across the country demonstrate potential gains from 

targeting public and private wetland restoration efforts by location and by wetland characteristics. Some benefits can be estimated more precisely than others:

• The annual benefits to duck hunting from restoring wetlands in the Prairie Pothole Region 

(primarily, lands in the eastern Dakotas and western edges of Minnesota and Iowa) range 

from near $0 to $143 per wetland acre.

• The annualized value of a new wetland’s effect on atmospheric concentrations of greenhouse 

gases ranges from $0 to $129 per wetland acre in the areas studied. In other areas, wetlands 

can increase, decrease, or have no net effect on atmospheric levels of greenhouse gases.

• Wetlands on agricultural land are not likely to provide notable flood-protection benefits 

unless they are located in close proximity to urban areas.

• Wetlands in the Upper Mississippi and Ohio River watersheds can annually remove from 11 

to 1,800 pounds of nitrogen per wetland acre in waters leaving farm fields from watershed 

streams and rivers. 
• About 1,756 counties in the contiguous States have wetland-associated imperiled species, with some counties 

having as many as 23 imperiled species. About 1,355 counties have no wetland-associated imperiled species, 

but this does not suggest that the value of wetland-species protection benefits in these counties is low. The 

analysis found no information that illustrates how a new wetland might affect species’ survival probabilities. 

Additionally, it found no information on the public’s willingness to pay (or how it might prioritize support) 

for changes in imperiled species’ survival probabilities. 

• Many wetlands recharge groundwater supplies, but the majority do not. Some wetlands exist because they 

are fed by groundwater. Others exist because they have impermeable subsoil.

• Sediment removed by wetlands, while protecting other bodies of water, can reduce other wetland benefits as 

the sediment accumulates. 

• The benefits of wetlands as open-space protection in rural areas are likely to be very small. 

Based on contract data from USDA’s Wetlands Reserve Program, the costs of restoring and preserving a 

wetland range from $170 per acre in the western Dakotas, Montana, Arkansas, and Louisiana to $6,100 per acre 

in the major corn-producing areas and along the Northern Pacific Coast. These estimates reflect the change in 

the value of the land with and without a permanent wetland easement plus wetland restoration costs.

An analysis of the combined benefits and costs of new wetlands revealed the following:

• Restoring wetlands in the western Prairie Pothole Region is likely to generate duck-hunting benefit-cost 

ratios close to or greater than one; that is, restoration funds spent in this area would be a good investment. 

However, most of the people who would benefit from the added duck populations in the region are hunters 

who live elsewhere. 

• The value of new wetlands’ greenhouse gas impacts exceeds wetland costs in the western half of the Prairie 

Pothole Region and in most of the Mississippi Alluvial Valley (from southern Illinois, covering western 

portions of Tennessee and Mississippi and eastern portions of Missouri and Louisiana). 

• The amount of nitrogen that can be removed for each dollar spent on wetland restoration and protection in the 

Upper Mississippi and Ohio River watersheds ranges from 0.2 to 34.0 pounds. The costs of nitrogen removal 

through new wetlands range from $0.03 to over $5.00 per pound of reduced N loadings in nearby waterways. 

How Was the Study Conducted?

To quantify wetland ecosystem effects on amenities, and the value the public places on these amenities, ERS 

researchers reviewed and analyzed economic, ecological, and engineering literature and data. In some cases, 

researchers used existing data and models; new models were also developed. Benefits were estimated at the 

county and subcounty levels across limited portions of the Nation, depending on the spatial resolution (e.g., 

geographic reliability) of supporting data and economic and ecological models. 

Researchers used Wetlands Reserve Program contract data to empirically estimate wetland cost models for 

major wetland regions. These models were then used to generate county-level estimates of the costs of new 

wetlands. Where the estimates allowed, researchers generated county- and subcounty-level benefit-cost ratios 

by dividing the benefit estimates by the cost estimates. These ratios illustrate areas where wetland restoration 

funding might be allocated to best serve public interests. When it was not possible to estimate economic benefits, researchers generated ratios of the wetlands’ cost effectiveness—the quantity of services produced relative 

to costs. Lastly, where data were limited, representative measures were generated that illustrate the scope and 

the magnitude of possible benefits.

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