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Nutrient retention return on investment in private forest conservation: the case of the Classified Forest and Wildlands Program in Indiana

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  • Wang, Yangyang
  • Atallah, Shady
  • Shao, Guofan

Abstract

This paper presents a spatially explicit analysis of the nutrient retention ecosystem service responses to changes in forest management in the White River Basin (WRB), Indiana. We use a modified version of the Integrated Valuation of Environmental Services and Tradeoffs (InVEST) model and ArcGIS to simulate and value the magnitude of nutrient retention service, assess the prediction power of the InVEST water yield and nutrient retention model, estimate changes in the quantity and value of nutrient retention service with hypothetical increases in enrollment in a forest conservation program, the Classified Forest and Wildlands (CFW) Program, and rank candidate scenarios using a conservation return on investment (ROI) measure. The results suggest that the benefits from a single ecosystem service of nutrient retention can exceed the cost of the tax deductions for both forest conservation scenarios considered but not for the current CFW enrollment. In particular, expanding the CFW program in contaminated sub-watershed yields a higher ROI than expanding the CFW program along river forks. Consequently, substantial savings can be achieved by applying the ROI analysis to guide conservation policies, compared to prioritization merely on the quantity measures of nutrient retention service or compared to program expansion that is not spatially targeted.

Suggested Citation

  • Wang, Yangyang & Atallah, Shady & Shao, Guofan, 2016. "Nutrient retention return on investment in private forest conservation: the case of the Classified Forest and Wildlands Program in Indiana," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236154, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:236154
    DOI: 10.22004/ag.econ.236154
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    1. Nelson, Nanette M. & Loomis, John B. & Jakus, Paul M. & Kealy, Mary J. & von Stackelburg, Nicholas & Ostermiller, Jeff, 2015. "Linking ecological data and economics to estimate the total economic value of improving water quality by reducing nutrients," Ecological Economics, Elsevier, vol. 118(C), pages 1-9.
    2. W. Viscusi & Joel Huber & Jason Bell, 2008. "The Economic Value of Water Quality," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(2), pages 169-187, October.
    3. Grossmann, Malte, 2012. "Economic value of the nutrient retention function of restored floodplain wetlands in the Elbe River basin," Ecological Economics, Elsevier, vol. 83(C), pages 108-117.
    4. Nagubadi, Venkatarao & McNamara, Kevin T. & Hoover, William L. & Mills, Walter L., 1996. "Program Participation Behavior of Nonindustrial Forest Landowners: A Probit Analysis," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 28(2), pages 323-336, December.
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    Keywords

    Environmental Economics and Policy; Financial Economics; Land Economics/Use; Resource /Energy Economics and Policy;
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