Urban & Coastal Resilience
Wetlands Environmental Impact Bond
Location: Lafourche Parish, LA
Quantified Ventures worked with the Environmental Defense Fund (EDF) and the State of Louisiana Coastal Protection and Restoration Authority (CPRA) to develop an outcomes-based financing approach to fill capital gaps for critical coastal wetland restoration projects in the state’s 2017 Coastal Master Plan. The projects are designed to help mitigate the impact of coastal erosion, sea level rise, storm surges, and nuisance flooding for the communities, infrastructure, and industry along the coast of Louisiana.
The coast of Louisiana is losing wetlands at a rate of over 1.3 acres, the size of an American football field, every 100 minutes, leaving communities and industry along the coast exposed and vulnerable to greater flooding, land loss, and storm surges. To reverse this wetland loss and build resilience in other ways along the coast, the State CPRA developed an ambitious and innovative, $50 billion, 50-year Coastal Master Plan in 2017. However, only about $9 to $12 billion of available public funding has been identified to make the plan a reality. Outcomes-based financing offers a way to help fill in this gap and make the spending of existing funds more efficient.
Quantified Ventures developed an Environmental Impact Bond (EIB) structure that could be used to finance a pilot wetland restoration project—an 835-acre parcel adjacent to Port Fourchon that is part of the State CPRA’s larger Coastal Master Plan. The proposed EIB benefits include accelerated funding to more quickly execute interventions that address the alarming erosion process, a two tiered performance payment structure to allow for fund efficiency, and an effective financial tool to engage private industry actors on the coast who benefit, thus offsetting capital from existing public funds.
The value of services provided by wetlands and other ecosystems in the Mississippi River Delta of Louisiana is estimated at around $15 to $58 billion each year, based on hurricane and flood protection, water supply, water quality, recreation and fisheries. Therefore, on average, restoring these ecosystems and protecting the coast is expected to create over $17 of total economic output for every $1 spent.