Shoreline modification is an issue of growing concern to coastal managers. Coastal managers, economists, and other scientists met to develop an approach to capture the incremental impacts of increasing levels of shoreline modification with respect to their costs and benefits at different levels of shoreline modification. The approach applies the concept of marginal analysis from economics to assess and predict the cumulative costs of shoreline modification in the Chesapeake Bay watershed. The goal is to assess entirely the environmental, social, and economic impacts of additional shoreline modification in a given area. Such an approach would incorporate incremental (human-caused) change in shorelines in a manner that would show as costs in the standard marginal cost curve.
Workshop participants agreed that the approach has merit and outlined the steps to define the marginal cost curve by 1) relating shoreline conditions to the capacity of the area to provide ecological services, and 2) conducting an assessment of the economic cost from ecological damage associated with increasing levels of shoreline modification. This would most likely be implemented using a contingent valuation survey. Alternately, it could be done by employing a stated preference survey to assess the external costs of increasing levels of shoreline modification. A hedonic property price analysis combined with available information on shoreline condition was recommended for approximating the private benefits of shoreline armoring, and some of the external market costs (decreased property values from visual disamenties to neighbors). Improved understanding of cumulative impacts may provide a scientific basis for a shift from single project management/permitting to local planning based on an established threshold beyond which shoreline hardening should not be approved.