Natural capital can be used to reduce disaster losses; for example, wetlands store floodwaters and mangroves buffer storm surge. This paper reviews the experience of several US communities that chose to use natural systems to mitigate a variety of risks. The paper discusses the communities' motivations in choosing to use natural capital as opposed to other risk-reduction measures, the policy approaches for doing so, the political and institutional challenges involved, and strategies for overcoming those challenges.



Definitions of ecosystem services vary. For one definition and classification that is becoming widespread, see Millennium Ecosystem Assessment (2005). For a discussion on a more precise definition for measurement and accounting of such services, see Boyd and Banzhaf (2007).


New questions were asked in response to participant answers, in addition to a fixed list of questions.


This can be further complicated if the land-use activities that alter risk levels are far away in space or time from the community seeking risk reductions (see Kousky & Zeckhauser, 2006).


Personal communication with the Chief of the Planning Branch of the New England District of the US Army Corps of Engineers in 2005 indicated there have been no natural valley storage projects since the Charles River case. There have been, however, other non-structural approaches to flood control. The Corps has also been working since that time in the Northeast with The Nature Conservancy to improve watersheds and more recently is working with them in Reno, Nevada; Sacramento, California; and possibly other places, to integrate flood control with ecosystem restoration.


The Department of the Interior makes similar payments to local governments with non-taxable federal lands within their jurisdiction.


The newly created Watershed Agricultural Council guaranteed a participation rate of 85%, which was exceeded.


The city made the decision to filter the Cronton watershed, which already was being developed, to protect it from non-point source pollution.

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