Cost-Benefit Analysis: Wetland Index

NRU
Feb. 1, 2017
Leah Wong

Recognizing the need to create incentives for private landowners to restore wetlands within the Credit River watershed, Credit Valley Conservation has developed a tool to quantify the environmental and social benefits of wetland restoration.

The tool, known as the wetland restoration environmental benefit index, allows conservation practitioners to calculate the biological, hydrological and social benefits of wetland restoration projects in order to assess where investments would be most beneficial.

“The benefit of using [the index] is that we’re no longer just looking at the benefits of restoring wetlands from a single lens. We’re not just looking at its flood mitigation qualities, we’re taking everything into account,” Credit Valley Conservation agricultural outreach senior coordinator Mark Eastman told NRU. “[Using the index] we can invest our dollars in restoring the wetlands that give the greatest total return to society.”

Though the index was developed by Credit Valley Conservation, with funding from the Friends of the Greenbelt Foundation, it can be tailored to the priorities of other conservation groups.

The biological, hydrological and social components are split into 28 different attributes including wetland type, diversity of the surrounding habitat, groundwater discharge, carbon storage and educational and research value. The index can be customized to reflect conservation priorities by weighting these attributes according to their importance.

The index was developed in response to some of the conservation authority’s other initiatives, including a survey around the willingness of landowners to pay for the recovery of wetlands.

“[While] education levels around wetland loss are actually quite low, a large number of our survey respondents showed a keen willingness to reverse those trends and contribute to their recovery,” said Eastman.

Within the Credit River watershed, Eastman said the opportunities to restore wetlands are largely on private lands within rural areas. The conservation authority researched what it would take to get landowners to participate in restoration initiatives - such as financial assistance or technical advice. The model most attractive to landowners was an incentive program based on the principles of a reverse auction.

“The reverse auction is an interesting incentive program because it puts the ability to choose what they’re paid in the hands of the landowner,” said Eastman.

Landowners, with the help of conservation practitioners, create a proposal for a restoration project on their land and include the funding level they’d require to undertake it. The funding could be for a portion of the full cost of a project or it could be higher to recognize the loss of land to another purpose.

“The [landowners] would know that their application isn’t the only one [the conservation authority] is looking at... There’s competition for a pot of funding,” said Eastman. “We’re trying to create that competition [to help] keep our bid prices in check. In the absence of a market, we’ll find a market price for restoring wetlands.”

This is where the wetland restoration benefit index becomes important. It can be used to compare the benefits of each project that is proposed and assess how funding should be allocated.

Credit Valley Conservation has yet to implement the program and still needs to raise the money to fund it. In the meantime it will use the index to measure the benefits of wetland restoration under its existing incentive programs.

Eastman said use of the index is not limited to incentive programs. Conservation groups could also use it to track the long-term benefits of an existing wetland that had previously been restored.