This research links watershed and forest management metrics with ecological economics to devise a conceptual model for a watershed services market that offsets costs of large-scale ecological restoration of forested ponderosa pine forest in Northern Arizona. The purpose of this study is to develop the basis for an innovative market for watershed services provided by the Forest Service in Northern Arizona. Projected benefits of forest restoration include 1) increased water quality and quantity, 2) reduced threats to existing watershed services from catastrophic fires, and 3) lowered uncertainty for water yield for climate change. A successful water market with downstream stakeholders paying for watershed management benefits would support the maintenance, monitoring, and restoration of forest health while also providing sustainable water resources.
This project has direct importance for society in terms of understanding society's willingness to pay for ecosystem services that result from forest restoration in the semi-arid Southwestern U.S. Little research exists connecting economic valuation to watershed services in the Southwestern United States, an area where: 1) water conservation and optimization are essential for expanding populations, 2) overgrown forested Ponderosa pine watersheds are degraded and in need of ecological restoration, and 3) increasing droughts and a warming climate further exacerbate threats to watershed services. If successful, the payments for ecosystems services and applications identified in this project will be transferred to millions of acres of forests in the entire Southwestern United States.
This project was designed to devise a conceptual model for a watershed services market that offsets costs of large-scale ecological restoration of ponderosa pine forests in Northern Arizona. The purpose of this study was to develop the basis for an innovative market for watershed services by the Four Forests Restoration Initiative (a Collaborative Forest Landscape Restoration Program project of the U.S. Forest Service) and watershed restoration efforts in Northern Arizona. The collaborative, interdisciplinary project Developed an interpretive groundwater flow model which assessed the impacts of forest restoration treatments and anticipated climate change to large, semi-arid regional aquifers, revealing an imbalance between future water supply and demand (Wyatt et al. 2014), Estimated, using econometric analysis, a 2.8% increase in water yield from restoration activities could increase agricultural income by approximately 3.7% annually over the short term, Estimated willingness to pay for improved watershed services for downstream irrigators to be $183.50 per household per year, with an annual aggregate benefit of approximately $400,000 (Mueller et al. 2013), Estimated willingness to pay for municipal water users in Flagstaff, AZ, to invest in forest restoration for the Lake Mary and Rio de Flag watersheds to be $4.89 per household per month, with aggregate annual benefits of $1.3M (Mueller 2013), and Developed a conceptual governance model for the use of "Payment for Watershed Services" on national forest lands and identified key enabling factors for willingness to "sell" watershed services and obstacles within the institutional framework of the U.S. Forest Service (Swaffar and Nielsen in review).
