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Archive for the ‘restoration’ Category

Author’s note: I just wrapped up a course on Coursera titled “Innovative Finance: Hacking finance to change the world.” Aunnie Patton Power and Tsakane Ngoepe from the University of Cape Town taught the course. They taught me a great deal. I very much enjoyed the content that they developed as well as solicited. Over the 5-week course, I completed weekly assignments. The text below is my submission for the final assignment in Week 5. In addition to this course, I’ve also found Blue Forest Conservation’s work very inspiring. While there are some differences in the forest resilience bond and the flood resilience bond, they are minor. (I’ve heard that imitation is the sincerest form of flattery.) In short, I’m very grateful for the work of others in helping me shape some ideas about finding alternative financing mechanisms to fund floodplain restoration work.

 

ISSUE AREA AND THE OUTCOMES IDENTIFIED

Inland flooding is a massive problem around the world. In the US, the Federal Emergency Management Agency (FEMA) has developed the National Flood Insurance Program (NFIP). Several large storms have put this agency severely in debt to an amount that exceeds $30 billion. This bankrupt program would benefit greatly from private capital working to reduce flood risk. In addition, many rivers have been cut off from their floodplains due to development, river incision due to poor upstream land management and levees. In these cases, several ecosystem services are degraded. Runoff tends to be flashier which leads to worsened flood conditions downstream and summer low flows tend to be lower. Other degraded ecosystem services can also include lower water quality, higher water temperatures, and degraded fish habitat.

A flood resilience bond seeks a win-win-win outcome. The first win is for the investor that gains a market rate return on their investment. The second winner are the multi-stakeholders who finance the bond with monthly cashflow payments. These entities are insurance agencies, water suppliers and hydropower operators who have been able to price out the benefit of the floodplain restoration project through various modeling exercises. Finally, the ecosystem benefits because a restored and intact river floodplain has been created.

CHALLENGES IDENTIFIED THAT THIS DESIGN ADDRESSES

Determining the value of the floodplain restoration will be extremely challenging. Stakeholders will be presented with a brand-new idea. The value of the restoration will need to exceed the cost of the monthly cash flow payments. The forest resilience bond that Blue Forest Conservation has developed is an innovative financing tool that really is a ground-breaking idea. The flood resilience bond is designed in many ways to mimic this bond.

This idea will only work if a significantly large enough area of floodplain can be restored. In other words, if the project only connects an extra acre or two of floodplain, then very little measurable benefits for the Phase 2 cash flow providing stakeholders will accrue. The GIS screening tool really is a cherry-picking exercise where sizable chunks of land can be set aside to flood when a flood does occur.

Landowners that are in the floodplain likely won’t be thrilled about hearing that their land will be flooded more often. They might need to be compensated.

Any investor that might invest in the bond will be doing due diligence. The bond must have rock solid numbers, risk assessment and contracted cash flow that make the deal even worth the time of the investor taking the time to look at the deal.

Ultimately, this design starts to address the disastrous debt that FEMA has accrued in its NFIP by lowering flood risk at no cost to FEMA and it provides private capital to fund river restoration.

RESOURCES I’VE IDENTIFIED THAT THIS DESIGN USESS

As an individual with an idea, I need foundation money to back this initial idea. A partner such as the Rockefeller Foundation would be ideal as they have backed Blue Forest Conservation and they have excellent contacts with banks and modelling firms. Given their understanding of the challenges and structure of the forest resilience bond, they would have valuable insight.

Phase 1 funding would also go to catastrophe modeling firms such as AIR Worldwide or RMS. They could look at flood scenarios before and after the floodplain restoration project and determine the savings in claims payment for insurance companies that have policy holders downstream of the project.

Phase 1 funding would also go to either a firm such as ESRI, or it could go to a university geography department. The purpose would be to develop a screening tool to identify potential floodplain restoration sites that are large enough for benefits to be accrued.

Phase 1 funding would also go to a bank capable of structuring the bond. The bank would provide the legal and financial expertise to vet the idea and identify potential funders.

Phase 1 could also involve a land trust or environmental NGO that might be interested in obtaining or managing the restored floodplain land.

Phase 2 would be to develop a flood resilience bond. Outside investors would put real money into the bond with expectation of a return on their investment. The stakeholders that are benefiting from the restoration project would be providing contracted cash flow into the special purpose vehicle. These stakeholders would include insurance companies selling flood insurance policies, hydropower operators benefiting from higher summer baseflows and water suppliers also benefiting from higher summer baseflows.

THE OPPORTUNITIES AROUND BUSINESS MODEL INNOVATION, MULTI-STAKEHOLDER PARTNERSHIPS AND FINANCING STRUCTURES THAT I’VE IDENTIFIED

The project would be outcome based. Measurable improvements in flood claim reduction and increased baseflow must be demonstrated.

The flood resilience bond involves multi-stakeholders in Phase 1 and Phase 2.

Floodplain restoration has typically been publicly funded. Private financing of restoration is a new and exciting idea. Private capital could change FEMA policy through the value creation in floodplain restoration.

NEXT STEPS TO PILOT MY DESIGN

I’m an individual with an idea and a love of rivers. I could approach the Rockefeller Foundation or the Hewlett Foundation and pitch them the idea. I could have conversations with ESRI or geography departments to develop a screening tool. Foundation backing with money in hand will allow me to approach modeling firms to spend time on their analysis.

 




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REFORM stands for REstoring river FOR effective catchment Management. It’s a pretty cool effort and I’d recommend spending some time noodling around the site. www.reformrivers.eu

The publication ‘Final report on methods, models, tools to assess the hydromorphology of rivers’ can be viewed as a pdf here. It’s a little over 100 pages, but it’s worth the read as it focuses on monitoring standards and assessment procedures to characterize the consequences of river degradation and restoration.  The report contains the following chapters:

  1. Introduction
  2. Overall Methodological Framework
  3. Stage I: Catchment-wide delineation and spatial characterization of the fluvial system
  4. Stage II: Assessment of temporal changes and current conditions
  5. Stage III: Assessment of scenario-based future trends
  6. Stage IV: River management

The report is chock full of good information, useful graphics, and literature. I particularly enjoyed this summary table in chapter 6.

hydromorphological_restoration

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Dr. Andrew Simon pulls together an excellent set of ideas in this presentation:

http://www.eng.buffalo.edu/glp/events/summer2008/week1/full/16-ResponseAndRestorationImplications.pdf

For several years, I’ve struggled with the idea of a reference stream. He lays out some of the problems with the approach.  I like how he introduces the idea of a hydrologic floodplain and a topographic floodplain.  I also like how he highlights the notion that “bankfull” discharge applies to a stable channel.

One of the best questions he asks is: “How does the channel respond?” Answer: “It depends”  The figure below was pulled from Janet Hooke’s 2003 Geomorphology article titled “Coarse sediment connectivity in river channel systems: a conceptual framework methodology”  I think the image does a good job of supporting Dr. Simons’ question about how a channel would respond. Clearly the spatial variability that all rivers have dictate that a thorough inspection of a site and its context within a watershed is warranted.

erosion_deposition_spatial_variability

I also always like a presentation that goes back and explicitly states first principals in geomorphology:

Applied (Driving) Forces vs. Resisting Forces.

I was first exposed to this idea as an undergraduate at Middlebury College in the early 1990’s thanks to my advisor Jack Schmidt and it is still true as it ever was today.

I like the way Mr. Simon thinks and presents his ideas. Keeping these ideas in mind the next time a restoration project comes along would be excellent, especially at the early stages so that that all parties can better understand the river adjustment dynamics at a project site.

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The Kentucky Institute for the Environment and Sustainable Development publishes Sustain – a journal of environmental and sustainability issues.  The Spring/Summer 2011 issue has six articles covering stream restoration. The articles cover groundwater and surface water connections, floodplain restoration, urban stream restoration, artificial ponds and a case study.

The full issue is available here:

http://louisville.edu/kiesd/sustain-magazine/Sustain24.pdf

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The Washington Department of Fish & Wildlife has just released a draft of its document titled “Stream Habitat Restoration Guidelines 2012” here.  It’s an  831 page document that I’ve only skimmed so far.  It does look rather thorough and as with many other documents covering the subject in general, it advocates for a watershed analysis and perspective on impacts throughout the landscape that can have an effect on physical channel habitat.  The document has 5 chapters covering some broad restoration themes, it then goes into 13 specific restoration techniques ranging from floodplain and channel manipulation, to large woody debris management and beaver management.  Finally, the document provides 10 appendices which appear to be introductions to academic courses such as fluvial geomorphology, sediment transport and hydrology.  Overall, it looks like an excellent reference to add to one’s  library on the topic of stream restoration.

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I just received this email and as a Utah State alum, I thought it was worth posting:

—————————————————————————————————

August 6-10, 2012
Intermountain Center for River Rehabilitation & Restoration
Utah State University
Logan, Utah

For more information and registration: http://cnr.usu.edu/icrrr/

This course is for those who wish to understand and apply the principles of sediment transport to alluvial channel assessment and design.  Principles of open channel flow and sediment transport are combined with watershed hydrologic and sediment source analysis to place channel assessment and design in the appropriate context. The course balances advance reading, lecture, field work, and hands-on exercises for estimating sediment supply, calculating sediment transport rates, forecasting channel response to water and sediment supply, and a class project incorporating gravel augmentation into channel design for dynamic fish habitat.  This course is intended for participants who are familiar with basic principles of river geomorphology.

Topics include:

  • Spatial analysis tools for estimating sediment supply at the watershed to reach level
  • Threshold and alluvial channel models, with guidelines for assessment and design incorporating uncertainty
  • Sediment transport calculations: challenges and methods, sediment rating curves, cumulative transport
  • Field measurement of sediment transport and guidance for different sampling approaches
  • 1-d flow and transport models: HEC-RAS applied to flow competence and sediment transport capacity
  • Forward and inverse application of mixed-size surface-based transport models

Principal Instructors

Peter Wilcock (course director), Professor, Geography and Environmental Engineering,
Johns Hopkins University

Tyler Allred, Principal, Allred Restoration

Patrick Belmont, Professor, Watershed Science, Utah State University

Susannah Erwin, Postdoctoral Associate, Watershed Science, Utah State University

Milada Majerova, Postdoctoral Associate, Watershed Science, Utah State University

The course is taught among the majestic peaks of the Wasatch and Bear River mountains near Logan UT. Cache Valley is a delightful place to visit in August.  Salt Lake City is easy to fly into and there are abundant opportunities for outdoor adventure before & after the course.

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This is not exactly hot off the press, but there is a wealth of good information here.  The state of Montana held a training back in December, 2009 and has posted what looks like essentially all the training material that David Williams developed for the course.

http://www.dnrc.mt.gov/wrd/water_op/floodplain/streambank_course/default.asp

Be sure to scroll through the whole list of resources and check out the spreadsheets on the bottom of the page.

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