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Return on Investment in Watershed Conservation in Hawai'i

Estimated ROI on the Big Island exceeds 100% on average

This research began as an effort to provide actionable information to the Fresh Water Advisory Council of the the Hawai'i Fresh Water Initiative. The objectives of this study were (1) to review studies that estimate the relationship between watershed conservation activities and groundwater recharge in Hawai‘i and (2) to estimate the volume of freshwater yield saved per dollar invested in conservation at several sites on Hawai‘i Island. Using budget information obtained from the Nature Conservancy and the Hawai‘i State Division of Forestry and Wildlife as well as publicly available landcover and evapotranspiration (ET) data, we estimated the gallons of freshwater yield saved per dollar invested in watershed conservation. Under baseline conditions—a 3 percent discount rate and a 10 percent rate of spread for existing invasive plant species—roughly 400 gallons are saved on average across management sites per dollar invested. In other words, about $2.50 in present value terms is required to protect every one thousand gallons of freshwater over a 50 year time horizon. Annual benefits increase continuously as the avoided loss of freshwater yield rises over time, while conservation costs tend to be front-loaded, as a result of high fence installation and ungulate removal costs. Thus, it is important to consider the long run when comparing the benefits and costs of conservation activities.

Supported by: Hawai'i Community Foundation


Shortly after completing the initial benefit-cost study for HCF, we began a collaboration with The Nature Conservancy 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‘alia, and Kona Hema management units. Freshwater yield benefits ranged from 69 million gallons in Maka‘alia, 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‘alia) 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‘alia) 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‘alia 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.

Supported by: The Nature Conservancy


Since completion of the Big Island projects, 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. We are also working to improve the methodology for calculating changes in water yield using spatial ecosystem service modeling techniques.

Supported by: The Nature Conservancy


Project Environment Researchers in the Field


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