The Endowment’s primary investment in Non-Traditional Markets is developing clean water as a potential revenue source for forest owners via the Healthy Watersheds through Healthy Forests Program. Forests produce clean water for 180 million Americans—that’s nearly two out of every three people in the country. Maintaining forested watersheds in a healthy condition ultimately reduces drinking water treatment and storage costs. Clean water is a potential revenue source for forest owners that can be used to protect, restore, and sustainably manage their forested watersheds. Without such revenue, some landowners cannot generate enough income to pay the costs of forestland ownership.
Using Forest Carbon Offsets for State Revolving Fund Loan Repayment. This report assesses the potential for using forest carbon offsets (also known as forest carbon credits) to repay loans from Clean Water State Revolving Funds (Clean Water SRFs) and Drinking Water State Revolving Funds (Drinking Water SRFs). The report is part of a larger research effort examining how to expand opportunities to use SRF funding to pay for largescale land conservation.
The Healthy Watersheds through Healthy Forests Approach: Beneficiaries Pay
Protecting and managing forested watersheds to ensure abundant and clean water is cost-effective, yet the challenge comes in generating the very significant funding required to accomplish this on a nationwide basis. The most scalable and practical approach is to empower communities to protect their own watersheds by connecting water consumers with the forest landowners who produce their water, thus putting a “face” on this important issue. The Endowment supports approaches that allow communities to generate the funding needed to protect their watersheds, including payments for watershed services, watershed protection fees on water bills, changes in utility base budgets that include watershed protection, local ballot measures that secure funding for watershed protection, and other mechanisms. Improved protection of forested watersheds, a form of natural or “green infrastructure,” is an important complement to traditional built or “gray infrastructure,” and is critical for protection of source water.
The Endowment constantly seeks to learn “what works” and to share lessons with partners to improve chances for future successes. In 2013 the Endowment again joined forces with NRCS and received a Conservation Innovation Grant (CIG) for a project to: “Assess CIG Source Water Protection in Forested Watersheds: Synthesizing Lessons Learned to Improve the Effectiveness of Future Projects,” which is now being conducted by the World Resources Institute.
Bright Spots: Replicating Success The Endowment’s goal is to increase the frequency of source water protection programs such that a “tipping point” is reached and natural infrastructure becomes a desirable, cost-effective complement to traditional approaches to ensuring the quality and quantity of drinking water. To that end, we are supporting several projects to establish sustainable funding sources for forested watershed protection and management:
In April 2011 the Endowment convened more than 60 funders and experts on water issues who identified the following priority next steps in advancing the Healthy Watersheds through Healthy Forests program:
Work with the water utility industry to promote the benefits of source water protection;
Investigate the potential to use Clean Water State Revolving funds for source water protection;
Clarify the potential for source water protection to reduce water treatment and storage costs;
Prioritize watersheds where source water protection efforts are likely to be successful; and
Enhance peer-to-peer communication among groups working on source water projects.
The Endowment followed-through by funding the following projects:
Source Water Protection Coordinator to Better Engage the Water Utility Industry
A top recommendation from the Endowment’s 2011 Chicago Water Convening was to engage the water utility industry in a more systematic way. To that end, the Endowment engaged Tracy Mehan, a principal with The Cadmus Group, Inc., as our Source Water Protection Coordinator. Mehan is a former director of Missouri Department of Natural Resources and Assistant Administrator for Water with the U.S. Environmental Protection Agency. This position is co-funded by the American Water Works Association, the Weyerhaeuser Family Foundation, the USDA Forest Service, and the Sustainable Forestry Initiative. Mehan’s role is to help identify water utilities that are willing to engage in source water protection efforts.
Developing an Economic Basis for Maintaining Watershed Health
The Endowment and the American Water Works Association (www.awwa.org) are jointly funding The Cadmus Group, Inc., to build a valid economic basis for developing and maintaining watershed health at local or regional utilities that use surface water as their primary source. Surveys and models will be used to clarify the economic relationship between watershed health, water quality, and water treatment costs. The final report should be completed in late 2014.