By Julie Mueller, Northern Arizona University
How much would you be willing to pay to restore a forest that you can’t see in order to preserve water resources? Researchers at Northern Arizona University found that those who draw irrigation water from the Verde River Watershed in Arizona would be willing to pay an average of $183.50 each year to fund forest restoration.
Multiplied by the number of irrigators in the area (2,181), that comes to approximately $400,000 in value that could be put to forest restoration. Irrigators who responded to a survey said they were willing to pay double the amount they already spend on water to support restoration.
The cost is significant, but the benefits are well worth the price. National Forest lands are the largest single source of drinking water for the contiguous United States, capturing rainfall and snowfall that recharges groundwater and prevents erosion. In the arid West, National Forest lands are even more significant, providing over 51 percent of the region’s drinking water. However, the quantity and quality of water from these lands depends on healthy forest conditions and proper land management.
Without healthy forest conditions and proper land management, forest health declines. Past land management policies in western forests emphasized complete wildfire suppression that create “unnatural forests,” whose thirsty trees deplete the amount of water available for other uses. Climate change, seasonal drought, and insect infestations further threaten forest health. More efficient management of forests and their watersheds will ensure that the West has a sufficient supply of quality water.
The Four Forest Restoration Initiative
In Arizona, the Forest Service has implemented the Four Forest Restoration Initiative (4FRI) to restore 970,000 hectares of Ponderosa pine forest across the state. This effort involves cutting down smaller trees and prescribed burning to increase the forest’s ability to retain precipitation and reduce the risk of catastrophic wildfire. While this is an expensive project—the average large-scale restoration can cost billions of dollars—it is believed that 4FRI will reduce the risk of wildfire in the future.
While it is clear based on scientific research that 4FRI and similar forest restoration projects will provide numerous benefits for downstream water users, such as improved water quality and increased supply, these benefits are not quantifiable using conventional market data. “Watershed services” and “forest restoration” are not goods and services traditionally bought and sold in markets. It’s easy to estimate the cost of forest restoration, but difficult to determine the dollar value of projects like 4FRI.
The Value of Forest Restoration
Sustainable management of scarce water resources, especially in the West, will require increasingly innovative efforts. Forest restoration is a potential option that will benefit downstream users, but those costs are currently assumed by outside parties. As the Verde River users demonstrate, beneficiaries who are willing to contribute to restoration may provide creative ways for policymakers to offset the costs of projects such as 4FRI.
Forest restoration has value, even if it doesn’t always appear with dollar signs. The willingness of Verde River residents to contribute to forest restoration suggests that these downstream users understand the critical relationship between forest health and their water supply; however, the users in the Verde represent only a small subset of potential beneficiaries. If other beneficiaries, such as municipal water users, are also willing to pay to support forest restoration, these contributions could significantly offset costs and increase the timeliness and scope of restoration.
Julie Mueller is an assistant professor of Economics at the W.A. Franke College of Business at Northern Arizona University.