Implementing the Texas Coastal Exchange

The unfettered development of Houston's flood-prone areas undoubtedly magnified the tremendous damage caused by Hurricane Harvey, but zoning or other land use controls are unpopular on the Texas coast and are unlikely to be adopted as a result. With this in mind, the SSPEED Center at Rice University looked to innovation and the market system to find a creative solution to protect important natural, flood-prone areas from further development while generating income for landowners. The authors propose the establishment of a Texas Coastal Exchange (TCX) — a trading clearinghouse where willing buyers and sellers enter into transactions involving the sale of ecological services. For instance, native prairies and wetlands still exist in the western and northwestern portions of Harris County. Such areas have an amazing natural capacity to absorb rainwater and store it in the soil. An eco-market-based approach could pay landowners to raise a “crop” of stored water. The authors identify additional sources of income for landowners that could survive flooding, from traditional (cattle grazing) to untraditional (sequestration of atmospheric carbon dioxide in soil), and lay out a plan for implementing the TCX