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Economic Valuation of The Nature Conservancy’s Watershed Conservation on Hawaii Island: Ka‘ū and Kona Hema

TNC’s watershed conservation activities protect over 6 billion gallons of freshwater yield through the year 2065 with a return on investment of 134%

The objective of this research was to estimate the value of ecosystem services protected by watershed conservation activities at The Nature Conservancy’s management units on Hawai‘i Island. Projections of monetized benefits, together with trajectories of conservation costs, were used to calculate various measures of net return for the Kaiholena, Maka‘ālia, and Kona Hema management units. Freshwater yield benefits ranged from 69 million gallons in Maka‘ālia, up to 6,168 million gallons in Kona Hema from the time of fence establishment until year 2065. Taking into account costs, every dollar spent on conservation protects no less than 26 gallons (Maka‘ālia) and as much as 383 gallons (Kona Hema). Assuming a discount rate of 3%, the lower bound for the present value of monetized freshwater benefits ranges from $0.1 million (Maka‘ālia) to $10.5 million (Kona Hema). The payback period for investment is at least 9 years (Kaiholena), but no longer than 46 years (Kona Hema). When taking into account additional ecosystem services, net present value increases substantially: $4.5 million in Maka‘ālia and $20.7 million in Kona Hema. The return on investment ranges from 38-542% across the three sites and tops 130% when the sites are considered jointly.

Since completion of the Big Island project, UHERO has been working with TNC staff to develop a scope of work for a similar project in the East Maui Watershed. Unlike the TNC sites on Hawai‘i Island, wherein perennial streams are nonexistent, surface water is an integral component of the water system on Maui. Thus, the Maui project will include sedimentation modeling, with particular emphasis on the implications for water treatment costs. We also hope to improve the methodology for calculating changes in water yield through collaboration with an export on spatial ecosystem service modeling.


Supported by: The Nature Conservancy

  

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