Determining the costs, revenues, and cost-share payments for the “floodwise” program: Nature-based solutions to mitigate flooding in eastern, rural North Carolina

Abstract

FloodWise is a pilot project that proposes innovative new approaches for flood disaster resilience by applying nature-based solutions (NBS) in Eastern North Carolina to control water runoff for brief periods after major storm events. We collected production and cost data from primary or secondary sources and used discounted cash flow and capital budgeting procedures at a 6% discount rate for NBS practices to estimate the amounts of payments necessary for farmland owners to break even to adopt NBS practices. Conventional crop farming was profitable already on suitable lands and served as the business as usual (BAU) case to compare to selected NBS practices. Warm-season pasture, loblolly pine forests and agroforestry, and no-till farming exceeded the 6% hurdle rate. Other conventional farm practices of hardpan breakup, cool-season pastures and trees, and bottomland hardwoods would require total payments of up to $600/acre to break even at 6%. Modifications of existing conservation practices, such as stream buffers, cover crops, silvopasture, and tile outlet terraces and tiling, fell in the second tier of total costs of up to $1,512/acre. Major NBS projects that required substantial earthmoving and flood control structures were more expensive - $3,734/acre for water farming (i.e., retention) with berms, $13,252/acre for a forest wetland bank, and about $88,000/acre for a major flood control wetland - and would displace most of the existing area for farm and forest management. However, larger floodwater structure projects could store more water for more extended periods; these storage quantities and benefits need to be assessed in future research.

Keywords

• Rural landscapes
• Nature-based solutions
• Costs
• Economics
• Capital budgeting
• Flood mitigation