Economy of environmental clean-ups

January 2019: A retrospective study analyses the Boston Harbour clean-up and shows that environmental clean-ups are economically viable. It gives insights into the profitability of a completed environmental restoration project and concludes that clean-ups can lead to significant increases of private investment and economic growth in coastal areas or along urban waterfronts.

Information

A retrospective study analyses the Boston Harbour clean-up and shows that environmental clean-ups are economically viable. The Boston Harbour Clean-up lasted from 1980s-early 2000s and had an estimated cost of US$5 billion. However, an economic evaluation analysis states that the clean harbour offsets the investment and now provides ecosystem services valued at US$30-US$100 billion. The retrospective analysis gives insights into the profitability of a completed environmental restoration project and allows conclusions about the economic contribution of healthy ecosystems to society.

Implications and opportunities

The economic viability of environmental clean-up and restoration projects offers opportunities when evaluating investments into coastal areas and prioritising policy options. It signifies that clean-ups can lead to significant increases of private investment and economic growth in coastal areas or along urban waterfronts. It allows the interpretation that the contributions of unpolluted areas post-clean up should be considered when comparing urban development, industrial investments and  ecosystem restauration projects.

Limitations

This study into the economics of a completed large-scale environmental restauration projects is unprecedented. Therefore, it remains to be seen if other projects can deliver equally high economic return rates. The returns are achieved are indirect, hence would not be attractive under conventional analysis where investors seek real rates of return.

Sources

Jin, D., Watson, C., Kite-Powell, H., & Kirshen, P. (2018). Evaluating Boston Harbor Cleanup: An Ecosystem Valuation Approach. Frontiers in Marine Science, 5, 478. doi:10.3389/fmars.2018.00478 

The Boston Globe. (2018). Boston Harbour is Clean but Could Face New Threats to Marine Life: Plastics and Drugs. Retrieved from https://www.bostonglobe.com/opinion/editorials/2018/12/07/boston-harbor-clean-but-could-face-new-threats-marine-life-plastics-and-drugs/pRw2DPI8KXDVgpz3iIq4JP/story.html