Protecting forested watersheds is smart economics for water utilities

Abstract

Recent advancements in the understanding of the benefits provided by healthy, well-managed forests provide water systems nationwide with a new approach to tackle America's imposing drinking water infrastructure needs. With sturdy, long-lived roots, multilayered canopies, and varied soil composition, forests help to regulate water yield and peak flow, as well as mitigate sedimentation and nutrient loading. Therefore, maintaining healthy, forested landscapes and implementing best practices in forestry management can be effective strategies for promoting source water quality and regulating flow. Because of aging water utility infrastructure, a growing population, growing affluence, and increasing threats to forested watersheds from climate change and other factors, water quality managers are paying closer attention to the benefits of forests as a least-cost option compared with, say, costly engineered solutions. This is not an either-or proposition. Society will always need well-financed, effective, and well-engineered gray infrastructure.

Full text

The breathtaking $1 trillion estimated price tag to repair and
expand our nation’s drinking water infrastructure is both sober-
ing and compelling (LaFrance, 2013). To address this costly
issue, some water utilities and the communities they serve are
turning to a solution nearly as old as our nation itself—protect-
ing forested watersheds. Increasing evidence suggests that healthy forests
produce water that is less expensive to treat, transport, and store. These same
forests also provide a plethora of other cultural, economic, and environmen-
tal benefits. And with real estate prices in many areas being lower as a result
of the Great Recession, now is the time to protect and sustainably manage
the lands and forests that supply our potable water.
The stakes are high. According to the 2008 report of the National Research
Council, Hydrologic Effects of a Changing Forest Landscape (NRC, 2008), “the
forests cycle water from precipitation through soil and ultimately deliver it as
streamflow that is used to supply nearly two-thirds of the clean water supply in
the United States.” Changes in forested headwaters, including tributary streams
PROTECTING AND
SUSTAINABLY MANAGING
FORESTED WATERSHEDS IS
AN APPROACH THAT, WHEN
USED AS A COMPLEMENT
TO TRADITIONAL
INFRASTRUCTURE, MAY NOT
ONLY REDUCE COSTS BUT
ALSO HELP SECURE NEW
FUNDING STREAMS.
sources and supply
TODD GARTNER, G. TRACY MEHAN III, JAMES MULLIGAN,
J. ALAN ROBERSON, PETER STANGEL, AND YIYUAN QIN
Protecting forested
watersheds is smart
economics for water utilities
54 SEPTEMBER 2014 | JOURNAL AWWA • 106:9 | GARTNER ET AL
2014 © American Water Works Association

GARTNER ET AL | 106:9 • JOURNAL AWWA | SEPTEMBER 2014 55
feeding into rivers, “influence the
quantity and quality of downstream
water sources; in this way, forests and
water are closely intertwined.”
Recent advancements in our
understanding of the benefits pro-
vided by healthy, well-managed for-
ests provide water systems nation-
wide with a new approach to tackle
America’s imposing drinking water
infrastructure needs. By harnessing
forests as “natural infrastructure” to
complement traditional “gray” (built
infrastructure) approaches, utilities
can help keep costs down, reduce
future risks to water supply, enhance
resilience to climate change, and pro-
vide a suite of ancillary benefits for
their customers: the air we breathe;
the places we play and enjoy; wood,
paper, and hundreds of other forest-
derived products; family-supporting
jobs; and the wildlife with which we
share our landscapes.
Recognizing that such an ap -
proach to securing drinking water
and other watershed services is cost-
effective, stakeholders and water
utilities in a number of communities
nationwide are looking to natural
infrastructure as part of a solution
to growing challenges. Table 1 illus-
trates the importance of forests and
other ecosystems to potable water
providers in a variety of ecological,
financial, and regulatory settings.
Although the context is unique for
each of these watersheds, the utilities
share opportunities to capture cost
savings by investing in forest-based
natural in frastructure, often as part of
an integrated app roach, alongside
essential built infrastructure.
THE SCIENCE IS CLEAR
Forests have a number of charac-
teristics that qualify them alongside
retention ponds, filtration technol-
ogy, and presedimentation basins as
critical water infrastructure. With
sturdy, long-lived roots, multilay-
ered canopies, and varied soil com-
position, forests help to regulate
water yield and peak flow, as well
as mitigate sedimentation and nutri-
ent loading.
Strong root systems of forests
anchor soil against erosion (Geyer et
al, 2000; Beeson & Doyle, 1995).
Multilayered forest canopies provide
rain and snow interception (Brooks et
al, 2003; Briggs & Smithson, 1986),
and the forest litter layer promotes
infiltration of water into the soil, pro-
viding a barrier that slows downslope
water movement (Dudley & Solton,
2003). These characteristics minimize
stormflow peaks and associated ero-
sion for all but the most intense storm
events. Furthermore, forests help
minimize sediment and pollutant
delivery to streams and give ample
opportunity for nutrient uptake by
plants and microbes in the soil (de la
Crétaz & Barten, 2007; Vitousek &
Reiners, 1975).
Forests help produce water of the
highest quality in the country (Jones
et al, 2009; Freeman et al, 2008;
Boyer et al, 2002; USDA, 2002). In
the event of forest conversion and
disturbance, the benefits from forests
diminish, leaving communities at
risk of flood, drought, increased
treatment cost, and greater possibil-
ity of water contamination. There-
fore, maintaining healthy, forested
landscapes and implementing best
practices in forestry management
can be effective strategies for pro-
moting source water quality and
regulating flow.
Keep in mind that the sustain-
able management of forests is par-
amount to this approach. Pre-
served forests—those without
active management—have their
place. But in most cases, sustain-
able timber harvest is necessary
and desirable to maintain forest
health and protection from forest
pests, diseases, catastrophic fires,
and other threats. Sustainable tim-
ber harvest also helps support
thriving rural economies. A well-
managed forest that provides com-
petitive economic returns is far
more likely to remain a forest, as
TABLE 1 Examples of natural infrastructure strategies and complementary built infrastructure
Watershed Major Issues Natural Infrastructure Strategy
Complementary Built
Components
Crooked River watershed—
Portland, Maine
Forest conversion for development
and need to maintain filtration
avoidance waiver
Conversation easements, land acquisi-
tion, and best management practic-
es as a cost-avoidance strategy in a
healthy watershed
Ozonation, chlorination
La Cache Poudre and Big
Thompson River watersheds—
Fort Collins and Greeley, Colo.
Costly sedimentation and flood risks
associated with catastrophic wildfire
in forested watershed
Wildfire risk management as a cost-
avoidance strategy in the face of
extreme and costly disruptive events
Off-river reservoir, presedimenta-
tion basin, ability to blend water
from reservoir and Poudre, floc-
culation, sedimentation, filtration
McKenzie River watershed—
Eugene, Ore.
Loss of forested riparian buffers to res-
idential development, and associat-
ed water quality decline and
incremental increases in treatment
costs
Forested riparian buffers as a cost-
reduction strategy in a nonregulato-
ry setting in a healthy watershed
Chlorination, coagulation and floc-
culation, sedimentation, filtration
Upper Neuse River Basin—
Raleigh & Durham, N.C.
Substantial degradation from devel-
opment in heavily forested land-
scape leading to Clean Water Act
requirements and high treatment
costs; reservoir siltation against
backdrop of flood and drought risk
Protection of forested riparian buffers,
wetlands, and floodplains as a regu-
latory compliance, cost reduction,
and risk mitigation strategy in a
degraded watershed
Ozonation, coagulation, two-stage
filtration (activated carbon and
sand filters), UV, and chlorination;
multiple reservoirs
2014 © American Water Works Association

56 SEPTEMBER 2014 | JOURNAL AWWA • 106:9 | GARTNER ET AL
opposed to some other land use
that may have detrimental effects
on water quality and quantity.
THE ECONOMICS ARE COMPELLING
Just as forests and water are
closely intertwined, forests and
water treatment, transport, and
storage are increasingly linked from
an economic perspective. A growing
body of research suggests that high-
quality source water and well-regu-
lated flow can lead to cost savings
(Freeman et al, 2008). By maintain-
ing high source water quality
through natural infrastructure
investments, treatment plants may
avoid capital costs for some of the
processes in conventional treatment,
such as coagulation, flocculation,
sedimentation, and more advanced
treatment processes like membrane
filtration and activated carbon.
Reduced sedimentation in source
water also prevents sediment
buildup in reservoirs and potential
water intake clogging, leading to
decreased maintenance costs such as
dredging and repairing. Finally,
treatment plants with high-quality
raw water may also save on variable
costs because more chemicals such
as coagulants, disinfectants, and pH
adjusters are needed when water
quality degrades.
Jim Taft (2013), executive direc-
tor of the Association of State
Drinking Water Administrators,
describes a recent study by the US
Environmental Protection Agency of
six communities that concluded that
“on average, every $1 spent on
source-water protection saved an
average of $27 in water treatment
costs” (Winiecki, 2012). Taft notes
that several other studies have also
confirmed “that improved source
water quality relates to lower treat-
ment and chemical costs” (Freeman
et al, 2008; Postel & Worldwatch
Institute, 2005; Forster and Murray,
2001; Dearmont et al, 1998;
Holmes, 1988; Espey et al, 1997;
Forster et al, 1987).
AWWA and the US Endowment
for Forestry and Communities
(USEFC) are collaborating on new
research and applied experiments to
further clarify the relationship
among watershed health, water
quality, and water treatment costs—
part of a growing partnership to
help water utilities become more
involved with forested watershed
protection. Protecting forested
watersheds won’t address the entire
drinking water infrastructure need,
but it is one strategy that can sig-
nificantly help reduce long-term
costs to consumers.
GREEN INFRASTRUCTURE
COMPLEMENTS GRAY
INFRASTRUCTURE
Because of aging water utility
infrastructure, a growing popula-
tion, growing affluence, and increas-
ing threats to forested watersheds
from climate change and other fac-
tors, water quality managers are
paying closer attention to the ben-
efits of forests as a least-cost option
compared with, say, costly engi-
neered solutions. This is not an
either-or proposition. Society will
always need well-financed, effective,
and well-engineered gray infrastruc-
ture. But, as economists are always
telling us, the action is at the mar-
gin, and great benefits—economic
and environmental—are to be found
in the complementarity of green and
gray solutions.
The mother of all such efforts is
the New York City source water–
protection initiative to protect its
upstate watersheds. Instead of spend-
ing $8–10 billion on a new filtration
plant, it is spending less than $2 bil-
lion on land protection and a variety
of forest and agricultural best man-
agement practices. Boston also man-
ages tens of thousands of forested
acres around its reservoir with a staff
of 160 completely financed by rate-
payers. The avoided costs for both
communities are huge. These emi-
nently sensible programs were
enabled by a filtration avoidance
waiver authorized under the Safe
Drinking Water Act.
Other watershed-level economic
studies show that the cost of natural
infrastructure options to achieve
water management objectives is
competitive with the gray infrastruc-
ture alternatives (Figure 1). Some of
these studies examine natural infra-
structure investments that reduce or
eliminate the need for an upfront
capital cost. Others look at natural
infrastructure as a mechanism to
eliminate or reduce certain operating
costs for a utility. In some cases,
natural infrastructure is used not to
reduce costs but to provide greater
community benefits for a given
Total Investment—millions of $
FIGURE 1 Comparison of nancial merits of integrated natural and built
infrastructure alternatives for desired ecological outcomes
20
22
30
30+
8
54
< 1
Medford, Ore. Santa Fe, N.M. Auburn, Maine Syracuse, N.Y.
Natural infrastructure
Built infrastructure
2014 © American Water Works Association

GARTNER ET AL | 106:9 • JOURNAL AWWA | SEPTEMBER 2014 57
investment because forests help sus-
tain people’s livelihoods, provide
space for recreation, and boost resil-
ience to natural hazards, to name a
few (Schmidt & Mulligan (2013) in
Gartner et al, 2013). These examples
illustrate the potential economic
benefits to communities of all sizes
and geographies that merit consider-
ation by utility managers throughout
the country.
An increasingly used type of
investment analysis (cost–benefit
analysis or cost-effectiveness analy-
sis, depending on the situation) that
provides a basis for considering
both natural infrastructure (green)
and built infrastructure (gray) alter-
natives is the “green–gray analysis”
(Talberth et al (2013) in Gartner et
al, 2013). Although still in its
infancy, green–gray analysis has
demonstrated the potential to pres-
ent natural infrastructure invest-
ments in a manner commensurate
with conventional infrastructure
investments so that the two can be
compared by public investment
analysts (Figure 2). This suggests
that, once fully developed, a green–
gray analysis methodology can be a
standard part of infrastructure
investment decisions for a wide
variety of settings.
Despite the limitations and chal-
lenges in measuring marginal ben-
efits, economic analyses to date
have demonstrated the clear poten-
tial for cost-effectiveness of a wide
range of natural infrastructure
options relative to built infrastruc-
ture alternatives.
WATERSHED PROTECTION:
IT’S DÉJÀ VU ALL OVER AGAIN
Protecting forested watersheds is
not a new idea. The rediscovery of
the water quality benefits of forests
FIGURE 2 Preliminary green–gray analysis for Portland, Maine
$44
$29
$29
$12 $118
$4 $0.1$106
Reforestation
(24,121 acres)
Riparian buffers
(1,602 acres)
Culvert
upgrades
(110 acres)
Forest
certification
(4,699 acres)
Total greenConservation
easements
(10,936 acres)
Savings Membrane
filtration
$15
$16
$12
$111 $155
$1 $0.1 $44
Reforestation
(24,121 acres)
Riparian buffers
(1,602 acres)
Culvert
upgrades
(110 acres)
Forest
certificaton
(4,699 acres)
Total greenConservation
easements
(10,936 acres)
Savings Membrane
filtration
A Baseline scenario
B Optimistic scenario
Natural Infrastructure Components
Natural Infrastructure Components
2014 © American Water Works Association

58 SEPTEMBER 2014 | JOURNAL AWWA • 106:9 | GARTNER ET AL
is a bit like going back to the future.
As Yogi Berra famously said, “It’s
déjà vu all over again.”
Back in the late 19th century,
Philadelphia acquired 9,000 acres to
protect its potable water, and the
land remains protected as a city
park to this day. In 1889, Seattle
started acquiring land in the for-
ested Cedar River Watershed to fil-
ter water for its utility, eventually
owning and managing 90,000 acres.
This eliminates the need for a new
filtration system—maybe several
systems, given the passage of time
as well as associated operations and
maintenance costs.
Utilities in New England have long
protected and sustainably managed
their forested watersheds. The South
Central Connecticut Regional Water
Authority in New Haven owns
27,000 acres of land to protect its
ten active reservoirs and seven
groundwater supply aquifers. Man-
chester (New Hampshire) Water
Works owns 8,000 acres around
Lake Massabesic, the source of its
drinking water, and generates reve-
nues from timber harvesting, which
allows it to reimburse local commu-
nities for the loss of tax revenue.
Devastating wildfires in 1996 and
2002 helped the Denver Water Board
realize just how important their for-
ested watersheds are. Management
of post-fire sedimentation for the
utility in the aftermath of these
blazes exceeded $26 million. Fur-
thermore, insect infestations, lack of
funding for management, and cli-
mate change will continue to make
their watershed, and many others,
highly vulnerable to fire and degra-
dation. Denver took a bold step to
get ahead of the curve and inked an
agreement with the US Department
of Agriculture Forest Service to
reduce fuel loads and accelerate
reforestation in critical parts of the
watershed. The water utility and the
Forest Service are splitting the $33
million price tag. Comparable invest-
ments are now under way in simi-
larly plagued communities such as
Salt Lake City, Utah; San Francisco,
Calif.; and Flagstaff, Ariz.
The World Resources Institute
(WRI), Earth Economics, and
Manomet Center for Conservation
Sciences synthesized the work of 56
experts with experience in source
water protection across the American
landscape in Natural Infrastructure:
Investing in Forested Landscapes for
Source Water Protection in the United
States (2013). The report may be
downloaded, gratis, from WRI’s web-
site (www.wri.org/publication/natu-
ral-infrastructure).
The Natural Infrastructure report
outlines the business case, scientific
underpinnings, and means of identi-
fying and seizing opportunities to
work with utilities, stakeholders,
political leaders, and conservation
organizations to design, finance, and
implement forest management mea-
sures, at scale, to defer or avoid
expensive investments in gray infra-
structure and reduce ongoing treat-
ment costs. Whether through the use
of fee-simple purchases, acquisition
of conservation easements, or the
subsidizing of sustainable forest
practices by private landowners,
water quality goals are achieved in
tandem with habitat protection, a
natural hydrologic flow regime, and
sequestration of carbon. The value-
added proposition extends far
beyond cost-effectiveness to encom-
pass a suite of environmental and
conservation benefits. These exam-
ples and case studies, along with
other resources, are available to help
water utilities address their reluc-
tance when it comes to venturing
into new practices of investing in
natural infrastructure.
Source water protection under
the Safe Drinking Water Act is the
analogue to watershed protection
under the Clean Water Act but is
more tightly focused on potable
water. It is part of a multibarrier
approach to protecting water sup-
plies up to, and including, water
treatment. It is preventive in nature,
which is less expensive than treat-
ment after the fact.
FUNDING WATERSHED
PROTECTION AND MANAGEMENT
As the relationship between water-
shed health, water quality, and water
treatment costs becomes increasingly
compelling, the biggest challenge for
water utilities may be accommodat-
ing watershed protection and man-
agement costs. Budgets are tight, and
traditional infrastructure needs are
enormous. At first blush, adding a
new cost for watershed health may
seem impractical. But when viewed
as a complement to traditional treat-
ment practices, and in light of the
potential for considerable cost-sav-
ings to rate-payers, funding for
watershed health is a smart and
responsible move.
Sustainably managing forested
watersheds and protecting them
from conversion to other uses or
directing others to do so may be for-
eign to water utilities that are more
accustomed to traditional, built
infrastructure to address water treat-
ment. This challenge should not be
underestimated, but it is not insur-
mountable by any means.
Fortunately, as dozens of utilities
across the country engage in water-
shed protection and management,
solutions for cost and expertise are
rapidly developing. Although the
outcome—sustainable management
and protection from development of
forested watersheds—is always the
same, the path to achieving this goal
A well-managed forest that provides competitive
economic returns is far more likely to remain
a forest.
2014 © American Water Works Association

GARTNER ET AL | 106:9 • JOURNAL AWWA | SEPTEMBER 2014 59
is as varied as the communities in
which the utilities are found.
In the Upper Neuse River Basin in
North Carolina’s Piedmont region,
the City of Raleigh established a
nutrient impact fee—a one-time
charge collected on new water and
sewer hookups. This was followed
by a permanent watershed protec-
tion fee on public water bills of one
penny per 100 gallons, which gener-
ates $1.3 million annually. The aver-
age household pays about 40 cents
monthly. These measures have gen-
erated $7.5 million since 2005 to
address water quality issues within
the utility’s watershed. Durham,
N.C., increased its water rates to
fund land protection in 2011 to pro-
tect areas upstream of its two water
supply reservoirs. Growth and
development, with resulting forest
degradation that could lead to Clean
Water Act requirements, higher
treatment costs, reservoir siltation,
and flood and drought risk are key
drivers in this watershed. The
USEFC and the USDA Natural
Resources Conservation Service co-
funded much of the work that led to
Raleigh’s achievement. This partner-
ship was designed to seek and imple-
ment sustained funding programs
that would link water consumers
with water producers—in this case,
the private forest-land owners who
collectively own and manage most
of Raleigh’s watershed.
Central Arkansas Water (Little
Rock) collects approximately $1 mil-
lion per year by means of a dedicated
fixed fee collected from its customers
TABLE 2 Summary of natural infrastructure financial mechanisms
Finance Mechanism
Typical Revenue Allocation
Typical User of Finance
Mechanism
Potential Scale
of Investment
Land
Acquisition Easements
Land Management
Activities
Direct investment by
governments and utilities
Rates X X X Utility Medium
Municipal bonds (revenue-
backed) X X Utility High
Municipal bonds (general obli-
gation) X X X Government High
Rates surcharges X X X Utility Medium
Earmarked proceeds X X X Government Low to high
Development impact fees X X X Government Low
Reverse auction X X X Government Low
State revolving funds X X X Utility Medium
Farm bill programs XGovernment Medium
Water Infrastructure
Finance and Innovation
Authority
TBD TBD TBD Utility High
Private investment capital X X Utility, government Low
Indirect investment by
governments and utilities
Property tax incentives XGovernment Medium
Voluntary donations by individual
and the private sector
Voluntary surcharge X X X Private sector, NGO, utility Low
Online crowdsource platforms X X X NGO Low
Auction X X X NGO Low to medium
Corporate sponsorship X X X Utility Low
Market-based mechanisms
Nutrient trading No additional revenue Government, NGO Medium
Mitigation banking No additional revenue Government Low to medium
Tradable development rights No additional revenue Government Medium
Forest banking No additional revenue Private sector Low
Carbon market X X X Utility, government, NGO Low to medium
Certification and labeling
programs XPrivate sector, government Low
NGO—nongovernmental organization, TBD—to be determined
2014 © American Water Works Association

60 SEPTEMBER 2014 | JOURNAL AWWA • 106:9 | GARTNER ET AL
as does Salt Lake City, which gener-
ates $1.5 million annually. The aver-
age household pays about $0.45 and
$1.50 per month, respectively. San
Antonio finances its source water–
protection program from a 1/8-cent
sales tax, passed by its voters.
Flagstaff pursued a $10 million
bond issue, approved at the ballot
box, to finance its forest and water-
shed management program in the
face of forest fires in Arizona. Den-
ver’s massive commitment, discussed
earlier, is funded directly from its
base budget as is San Francisco’s
funding in light of the forest fire
problem in its watershed.
There is an emerging vanguard of
water utilities and others who are mak-
ing sustained financial commitments to
source water protection in forested
landscapes for a variety of reasons, be
it forest fires, suburban sprawl, or
demographic shifts (Table 2).
The choice of a sustainable, long-
term funding source is important for
reasons that are not hard to compre-
hend. The nation’s population contin-
ues to expand, and American’s life-
styles are, generally, affluent. Thus,
more development, deforestation,
spread of impervious surfaces (roads,
sidewalks, parking lots, and roofs),
and the resultant degradation of
water quality. Land values are not
getting any cheaper. It will take sig-
nificant investments over time to keep
treatment and capital costs in man-
ageable territory in the out years.
The decision about how to fund
source water protection at scale is,
quintessentially, a local political deci-
sion on the part of utilities and the
communities they serve. In some
places the customers may support
Philanthropies/
Private Capital
Financing institutions that
can provide upfront capital in
the form of grants, loans, and
investments to establish
natural infrastructure
projects
Mainstreamers
Organizations responsible
for building national and
international support for
national infrastructure
approaches by building
capacity among decision-
makers, exchanging
knowledge and experiences,
connecting pilot projects,
and creating consistency
within the field
Suppliers
Landowners who supply
watershed services by
conserving or restoring
ecosystem functions on
their land
Tools
Software and equipment
developed to facilitate the
generation, verification, and
transaction of watershed
services while providing
transparency and public
outreach
Investors/Beneficiaries
Investors in natural
infrastructure for enhanced
watershed services where
the business case has been
made—typically utilities,
governments, and
businesses
Academics/Modelers
Community responsible for
advancing the field of
ecosystem science through
metric and model
development and by
seeking scientific answers
Implementers/
Transaction Brokers
Entities that provide upfront
financing, expertise to the
production of watershed
services, and/or aggregation
of supply and risk
Agencies
Agencies may signal
demand by enforcing
regulatory policy on utilities,
businesses, and other
groups. Agencies may also
facilitate opportunities
through grant-making and
cost shares.
Local Conveners
and Advocates
Groups responsible for
building the necessary
capacity among local
stakeholders required to
establish an incentives
system. Conveners are
typically organizations with a
local or regional focus;
however, national/international
institutions can fill this role
as well.
Money
Watershed
Relationships
Regulators
Knowledge
FIGURE 3 The “actor network” in successful natural infrastructure efforts
Source: Gartner et al, 2013
2014 © American Water Works Association

GARTNER ET AL | 106:9 • JOURNAL AWWA | SEPTEMBER 2014 61
water rates robust enough to allow
for necessary expenditures from the
base capital budget. In other places,
a watershed or user fee may make
economic sense in providing funds
upfront so that utilities are not faced
with paying to remove pollutants
after storms wash loose sediment
into streams or contaminants that
exceed legal limits.
MANAGING FORESTED
WATERSHEDS: WHO YOU
GONNA CALL?
For most engineers, forested water-
shed protection and management
may be outside their comfort zones.
Unfamiliarity with watershed protec-
tion strategies, much less the process
for prioritizing lands with the biggest
potential to affect water quality, can
be a significant hurdle. As this prac-
tice becomes increasingly common,
however, expertise is readily found.
Ecologists and hydrologists, market-
based conservation experts, policy
experts, third-party verifiers, and
model and tool developers all bring
important expertise and capacity to a
program. The Natural Infrastructure
report illustrates the relationship
among a variety of stakeholders and
experts (Figure 3; Gartner et al,
2013). More and more utilities now
employ watershed protection experts,
and many land trusts and conserva-
tion groups routinely consider water
quality issues as part of their business.
Taking advantage of peer-to-peer
contacts within the water utility
community is the simplest way to
learn how others have been success-
ful. The USEFC, WRI, and others
stand ready to help connect inter-
ested water utilities with partners
who can advise on watershed issues
as well as funding solutions.
Although many water utilities
choose to own and manage their for-
ested watersheds, this is not the only
path. Existing, well-managed forests
may be kept in that state through
payments to landowners that reward
them for practices that benefit water
quality. Incentive payments to pri-
vate landowners to encourage good
management practices has proved
extremely effective for wildlife and
game management, for example, and
could certainly be extended to water
FIGURE 4 Forest importance to surface drinking water and watersheds with high risk—top 10%
Forest importance to surface drinking water
High to low importance
Development
Insect and disease
Wildland fire
Top 10% watersheds with risk from:
Source: USDA, 2011
2014 © American Water Works Association

62 SEPTEMBER 2014 | JOURNAL AWWA • 106:9 | GARTNER ET AL
quality issues. The well-proven con-
servation easement allows landown-
ers to retain their land and generate
revenue while protecting land from
development at a much lower cost
than outright acquisition.
More than 10 million families
own 264 million acres—35%—of
America’s forests (USDA, 2008).
Many of these families need some
financial return from the forests to
keep them intact and well managed,
and to resist short-term financial
gains from inappropriate harvest or
development that could seriously
affect water quality. Payment for
watershed services is one approach
that could help ensure the long-term
health of drinking water supplies
and save water consumers money.
PUBLIC OPINION ON DRINKING
WATER
Not surprisingly, the public is very
supportive of efforts to protect
drinking water supplies even if it
entails having to pay more to do so.
Organizations such as The Nature
Conservancy (TNC) and The Trust
for Public Land (TPL) are leaders in
advancing community-driven efforts
to protect land for recreation, open
space, wildlife, and watershed pro-
tection. One common approach is to
help communities develop conserva-
tion ballot measures that allow vot-
ers to decide if they would like to
devote funding to land and water
protection for any number of bene-
fits. According to the TPL website,
this approach has been very success-
ful. In the 2013 elections, for exam-
ple, voters passed 53 of 68 ballot
measures proposed (68%), approv-
ing more than $797 million for con-
servation purposes (www.landvote.
org). Since 1988, this strategy has
resulted in nearly $60 billion being
approved for conservation purposes
by voters. The approach works when
the economy is good or bad, and in
red states and blue states.
TPL has done extensive polling to
better understand what motivates
This screen shot shows a water bill rate comparison for Portland, Ore., using the Municipal Water and Wastewater Rates
Dashboard from the University of North Carolina Environmental Finance Center.
2014 © American Water Works Association

GARTNER ET AL | 106:9 • JOURNAL AWWA | SEPTEMBER 2014 63
people to support conservation bal-
lot issues. In 2012, TPL conducted
17 state and local public opinion
surveys throughout the United
States. In each survey, they posed a
question asking likely voters whether
they would be more or less likely to
support a conservation finance bal-
lot measure if it included funding for
an array of purposes. When asked
about “water supply/drinking
water,” 62% strongly supported and
90% supported such measures.
When asked about “water quality/
clean water,” 36% strongly sup-
ported and 76% supported such
measures. Public support for water-
related issues dwarfs interest for
issues such as wildlife habitat, mul-
tiuse trails, open space, and land for
parks and recreation. These results
are consistent with TPL’s summary
of poll findings during the past
decade, which consistently rank
drinking water and water quality as
the number-one and number-two
purposes in more than 200 surveys
during that period.
ANCILLARY BENEFITS
Sustainably managed forested
watersheds provide many other eco-
nomic, cultural, and environmental
benefits. A well-managed forest will
provide income from timber har-
vest, putting money in the pocket of
the forest owners, and also those
associated with the industry: for-
estry consultants, loggers, truckers
and other forms of transportation,
and mill owners. Putting money in
the pockets of those who own and
benefit from sustainably managed
forests is one market-driven
approach to helping ensure that for-
ested watersheds remain forested.
According to the American Forest
& Paper Association (www.
afandpa.org), the forest industry
generates about 4.5% of the total
annual US manufacturing gross
domestic product and is among the
top 10 manufacturing-sector
employers in 47 states. In rural
areas in particular, forest-based jobs
are essential to the local economy.
A high demand for products from
sustainably managed forests will
help ensure that forested watersheds
are not converted to other uses that
may have detrimental impacts on
water quality.
Forested watersheds that allow
public access are often popular sites
for recreation, from hunting and
fishing to birding and hiking. Even
where access is not permitted, such
protected lands are valued as open
space. The forests in watersheds are
also excellent carbon sinks and help
regulate climate. They provide a
valuable habitat for fish and wildlife,
and are a backbone of nature-based
tourism in many places.
PROVIDING SOLUTIONS
Taking on forested watershed pro-
tection and management with all the
other short- and long-term chal-
lenges that face on a daily basis may
seem daunting. It does require new
expertise and it does require adjust-
ing budgets or creating new funding
streams. There are, however, many
organizations willing to help you
and support your process for getting
involved.
The USEFC, AWWA, the Weyer-
haeuser Family Foundation, and the
Sustainable Forestry Initiative are
jointly supporting outreach efforts
to water utilities around the country
to help connect the dots with regard
to forested watershed protection.
The organizations mentioned in this
article—TPL, TNC, and WRI,
among many others—are producing
ground-breaking partnerships and
research that makes the case for for-
ested watershed protection more
appealing.
Additionally, as the science under-
pinning the water-related benefits of
natural infrastructure and relevant
data advances rapidly, software,
online platforms, and other tools are
becoming increasingly available,
facilitating investments in natural
infrastructure on a large scale (Gart-
ner et al, 2013). WRI’s world-leading
mapping tool, Aqueduct, identifies
global water risks (Reig et al, 2013);
the Forest to Faucets Partnership of
the USDA Forest Service looks to
recognize opportunities for forest
conservation and restoration actions
related to water quality (USDA,
2011; Figure 4); the Ecosystem Cred-
iting Platform of the Willamette
Partnership (2014) helps track and
monitor program transparency; and
the Municipal Water and Wastewater
Rates Dashboard from the Univer-
sity of North Carolina Environmen-
tal Finance Center (2014) is designed
to communicate the value of source
water–protection investments to the
utility rate base (see the screen shot
on page 62).
America’s drinking water infra-
structure needs are daunting—so
daunting, in fact, that traditional
funding strategies may not be ade-
quate to meet the need. Protecting
and sustainably managing forested
watersheds is an approach that,
when used as a complement to tra-
ditional “gray” infrastructure, may
not only reduce costs but may also
help secure new funding streams.
And because keeping costs as low as
possible while ensuring superior
water quality for your customers is
of paramount importance, water-
shed protection is a strategy worth
considering.
ABOUT THE AUTHORS
Todd Gartner is a
senior associate
and manager of
the World
Resources
Institute’s Natural
Infrastructure for
Water Program. He can be reached
at tgartner@wri.org. G. Tracy
Mehan III serves as national source
water protection coordinator for
the US Endowment for Forestry
and Communities. He served as
assistant administrator for Water at
USEPA from 2001 to 2003. James
Mulligan is executive director of
Green Community Ventures, a
partner of the World Resources
Institute. J. Alan Roberson is
director of federal relations for
2014 © American Water Works Association

64 SEPTEMBER 2014 | JOURNAL AWWA • 106:9 | GARTNER ET AL
AWWA. Peter Stangel is senior vice-
president at the US Endowment for
Forestry and Communities.Yiyuan
Qin is a Master of Environmental
Management candidate at the Yale
School of Forestry and
Environmental Studies. The views
in this article represent the personal
views of the authors and do not
necessarilyrepresent the views of
the authors’ employers.
http://dx.doi.org/10.5942/jawwa.2014.106.0132
REFERENCES
Beeson, C.E. & Doyle, P.F., 1995. Comparison of
Bank Erosion at Vegetated and Non-
Vegetated Channel Bends. Journal of the
American Water Resources Association,
31:6:983. http://dx.doi.
org/10.1111/j.1752-1688.1995.tb03414.x.
Boyer, E. & Goodale, C.L., 2002.
Anthropogenic Nitrogen Sources and
Relationships to Riverine Nitrogen
Export in the Northeastern U.S.A.
Biogeochemistry, 57:58:137. http://dx.doi.
org/10.1023/A:1015709302073.
Briggs, D.J. & Smithson, P., 1986.
Fundamentals of Physical Geography.
Rowman & Littlefield, Totowa, NJ.
Brooks, J.R.; Schulte, P.J.; Bond, B.J.; Cou-
lombe, R.; Domec, J.-C.; Hinckley, T.M.;
McDowell, N.; & Philips, N, 2003. Does
Foliage on the Same Branch Compete for
the Same Water? Experiments on Doug-
las-Fir Trees. Trees—Structure and
Function, 17:2:101. http:/dx.doi.
org/10.1007/s00468-002-0207-1.
Dearmont, D.; McCarl, B.A.; & Tolman, D.A.,
1998. Costs of Water Treatment Due to
Diminished Water Quality: A Case Study
in Texas. Water Resources Research,
34:4:849. http://dx.doi.
org/10.1029/98WR00213.
De la Crétaz, A. & Barten, P.K., 2007. Land Use
Effects on Streamflow and Water Quality
in the Northeastern United States. CRC
Press, Boca Raton, Fla.
Dudley, N. & Stolton, S., 2003. Running Pure:
The Importance of Forest Protected
Areas to Drinking Water. World Bank &
WWF Alliance for Forest Conservation
and Sustainable Use, Washington.
Espey, M.; Espey, J.; & Shaw, W.D., 1997.
Price Elasticity of Residential Demand
for Water: A Meta-analysis. Water
Resources Research, 33:6:1369. http://
dx.doi.org/10.1029/97WR00571.
Forster, D.L. & Murray, C., 2001. Farming
Practices & Community Water Treatment
Costs (no. AEDE-FR-0003). Ohio State
University Department of Agricultural,
Environmental, and Development
Economics, Columbus.
Forster, D.L.; Bardos, C.P.; & Southgate, D.D.,
1987. Soil Erosion and Water Treatment
Costs. Journal of Soil and Water
Conservation, 42:5:349.
Freeman, J.; Madsen, R.; & Hart, K., 2008.
Statistical Analysis of Drinking Water
Treatment Plan Costs, Source Water
Quality, and Land Cover Characteristics.
www.forestsforwatersheds.org/storage/
Freeman%202008%20DW%20costs.pdf
(accessed June 2013).
Gartner, T.; Mulligan, J.; Schmidt, R.; & Gunn,
J., 2013. Natural Infrastructure: Investing
in Forested Landscapes for Source
Water Protection in the United States.
World Resources Institute, Washington.
Geyer, W.R.; Morris, J.T.; Prahl, F.G.; & Jay, D.A.,
2000. Interaction Between Physical
Processes and Ecosystem Structure: A
Comparative Approach. In Estuarine
Science: a Synthetic Approach to
Research and Practice (J.E. Hobbie,
editor),177-206. Island Press, Washington.
Holmes, T.P., 1988. The Offsite Impact of Soil
Erosion on the Water Treatment Industry.
Land Economics, 64:4:356. http://dx.doi.
org/10.2307/3146308.
Jones, J.A.; Achterman, G.L.; Augustine, L.A.;
Creed, I.F.; Ffolliot, P.F.; McDonald, L.; &
Wemple, B.C., 2009. Hydrologic Effects
of a Changing Forested Landscape—
Challenges for the Hydrological
Sciences. Hydrological Processes,
23:18:2699. http://dx.doi.org/10.1002/
hyp.7404.
LaFrance, D., 2013. AWWA Statement on
American Society of Civil Engineers
Infrastructure Report Card, Mar. 13,
2013. www.Allonewater.com (accessed
March 2013).
NRC (National Research Council), 2008.
Hydrologic Effects of a Changing Forest
Landscape. National Academies Press,
Washington.
Postel, S. & Worldwatch Institute, 2005. Liquid
Assets: The Critical Need to Safeguard
Freshwater Ecosystems. Worldwatch
Institute, Washington.
Reig, P.; Shiao, T.; & Gassert, F., 2013.
Aqueduct Water Risk Framework.
Working paper. World Resources
Institute, Washington. www.wri.org/
publication/aqueduct-waterrisk-
framework (accessed May 2014).
Schmidt, R. & Mulligan J., 2013. Section 1.3:
Demonstrations of the Business Case.
Natural Infrastructure: Investing in
Forested Landscapes for Source Water
Protection in the United States. World
Resources Institute, Washington.
Taft, J., 2013. Box 3: Natural Infrastructure
and Safe Drinking Water. In Natural
Infrastructure: Investing in Forested
Landscapes for Source Water Protection
in the United States. World Resources
Institute, Washington.
Talberth, J.; Gray, E.; Yonavjak, L.; & Gartner
T., 2013. Section 1.2: Green-Gray
Analysis. Natural Infrastructure:
Investing in Forested Landscapes for
Source Water Protection in the United
States. World Resources Institute,
Washington.
University of North Carolina Environmental
Finance Center, 2014. Municipal Water
and Wastewater Rates Dashboard.
www.efc.sog.unc.edu/reslib/item/
north-carolina-water-and-wastewater-
rates-dashboard (accessed
June 2014).
USDA (US Department of Agriculture), 2011.
From the Forest to the Faucet: Drinking
Water and Forest in the US. Forest
Services. USDA, Washington.
USDA, 2008. Family Forest Owners of the
United States, 2006. Gen Tech. Rep.
NRS-27. Forest Service, Northern
Research Station. USDA, Newtown
Square, Pa.
USDA, 2002. Southern Forest Resource
Assessment. Forest Service, Southern
Research Station. USDA, Asheville, N.C.
Vitousek, P.M. & Reiners, W.A., 1975.
Ecosystem Succession and Nutrient
Retention: A Hypothesis. BioScience.
25:6:376. http://dx.doi.
org/10.2307/1297148.i.
Willamette Partnership, 2014. Ecosystem
Crediting Platform. http://
willamettepartnership.ecosystemcredits.
org (accessed May 2014).
Winiecki, E., 2012. Economics and Source
Water Protection. http://yosemite.epa.
gov/r10/water.nsf/c6e3c862e806dd68882
5688200708c97/04a73c144395fda1882570
2e00650eb2/$FILE/Economics_of_
SWP_E_Winiecki_EPA.ppt#8 (accessed
May 2013).
ADDITIONAL RESOURCES
Integrated Watershed Management:
Principles and Practice, Second Edition.
Heathcote, I.W., 2009. Catalog No.
20742.
Watershed Management for Drinking
Water Protection. C. Davis, editor,
2008. Catalog No. 20675.
For more information go to www.
AWWA.org.
2014 © American Water Works Association