Calculating the value of conservation

It’s no secret that every tax funded agency has been under scrutiny the past several years to justify its existence, and soil and water conservation districts are no different.

While the value of conservation to society is long-established, putting an actual dollar value on clean water, clean air, open spaces and productive soils is elusive.

The National Association of Conservation Districts commissioned a study, Conservation Benefits, Putting Value Where it Belongs, in 2010, that takes a look at putting value on conservation.

The study focuses on several ecosystem services, one of them being source water. For instance, good conservation practices result in cleaner drinking water and can avoid expensive treatment system upgrades.

One example

Along those lines, water quality trading programs — of which Holmes SWCD is involved in two — is one way to realize the economic benefits of conservation.

Trading is based on the fact that sources in a watershed can face different costs to control the same pollution. Trading programs allow facilities (factories, wastewater treatment plants, etc.) facing pollution control costs to meet their regulatory obligations by purchasing environmentally equivalent (or superior) pollution reduction from another source.

In Holmes County, Alpine Cheese Company purchased credits from farmers who installed conservation practices to offset Ohio EPA phosphorus reduction requirements.

Alpine Cheese received one credit (pound) for every three credits (pounds) of phosphorus removed by a conservation practice, ensuring that more was taken out than established the permit limits. As a result of water quality trading, Alpine Cheese benefited by saving some facility upgrade costs.

The farmers received payments to install conservation practices which benefited their herd health and streamlined management. And when farmers install conservation practices, chances are they are spending money locally for supplies and contractor services, which creates a multiplier effect.

Outcome

The SWCD received funding to plan and oversee the conservation practices, and Holmes County benefited because the cheese factory added jobs and increased the demand for milk, boosting its economy. Plus water quality was improved, which leads to diverse aquatic and wildlife habitat.

A win-win all around, but tough to put a dollar amount on.

Wetlands and storm water management are two other ecosystem services that provide economic benefits. The benefits of these practices include reduced flooding and frequency, reduced erosion and sedimentation, and water quality improvements.

Various software models have been developed to provide information about avoided damage and even lives saved. Data is being compiled that link environment and environmental protection to human well-being.

Estimate

Conservation planting systems is one ecosystem service that we can at least guesstimate. One of the findings of the Natural Resources Conservation Service’s National Resources Inventory is that soil erosion on cropland decreased an estimated 43 percent between 1982 and 2007. This translates to 720 million tons of soil saved.

Using $6.10/ton as a cost of soil erosion (determined by USDA), that equates to $4.4 billion in costs avoided per year. I’m sure economists might argue with “avoided” costs, but it is one way to gauge the impact of conservation.

One more area to look at is reduced-tillage systems, which provide quantifiable benefits in costs avoided, such as equipment, fuel, time and other inputs.

Study

One study identified the annual net benefit of no-till or strip-till in northwest Iowa at $21 and $40 per acre, respectively, compared to chisel plow. Fewer tillage trips mean less labor, fuel and machinery repair costs.

The benefits of conservation include farmland preservation, forestry (Ohio’s forest products industry contributes $15 billion to the Ohio economy), pollination (in the U.S. pollination by honey bees and other insects produces nearly $20 billion worth of products annually), recreation (think about the economic impacts of hunting, fishing, bird watching, boating, hiking … the list goes on and on) and many more areas.

Report online

If you are interested in reading the entire report, you can find it on the National Association of Conservation Districts’ website. It is an eye-opener as to the far-reaching impacts of conservation on our local, state and national economy under the leadership of soil and water conservation districts and conservation partners.

The study also points to future possibilities for farmers and conservationists if the market attaches economic values to conservation practices.

About the Author

Michelle Wood is the program administrator for the Holmes Soil and Water Conservation District. She is a graduate of Mount Union College with a degree in communications, and has been involved in natural resources and agriculture throughout her career. More Stories by Michelle Wood

2 Comments

  1. Michelle –
    I agree that conservation pays in the short and long term and identifying and calculating its costs are challenging. And it sounds like Holmes SWCD is a leader in this emerging field. My experience tells me that the ecosystem service market is going to be larger than the government conservation delivery system and that SWCD can play a significant role to assist farmers in meeting these new market demands. But I think the delivery model will look quite different than the conservation delivery system of the last 4 decades. In a pilot project for MnDeptAg I used a shared governance model to provide farmers with the means to provide “reasonable assurance” for TMDL issues. The link is to the exec summary report is at http://www.agresourcestrategies.com/LEQA.php if interested.
    Best,
    Tim Gieseke

  2. One of your statements is incorrect. “Using $6.10/ton as a cost of soil erosion (determined by USDA), that equates to $4.4 billion in costs avoided per year. I’m sure economists might argue with “avoided” costs, but it is one way to gauge the impact of conservation.” As an economist I can reassure you that avoided costs are legitimate, even powerful, benefits. Avoided costs have been an important benefit category for many decades in watershed economics of flood control.

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