Multiple environmental services as an opportunity for watershed restoration

The impact of reforestation on water supplies is often considered in terms of impacts on water yields. In specific circumstances, reforestation will improve water quality, to the extent that previously unusable water can be utilised. Such is the case with salinisation, a process that threatens up to 17million hectares of Australian farmland, major fresh water resources, biodiversity and built infrastructure. This paper highlights the value of bundling payments for environmental services (PES) from watershed restoration, including water quality improvement and carbon sequestration coupled with wood production, and compares the net returns with the existing agricultural land-use, using as an example the 408000ha Warren–Tone watershed (WT) in south-western Australia. The externalities of different land use systems are also taken into account. In this watershed 105000ha of the land was cleared for agriculture, with 25000ha subsequently reforested. A hydrological model (LUCICAT) was used to define the relationships between reforestation/deforestation and water yield and quality, thus providing a basis for valuing the hydrological benefits of reforestation. Various land-use change scenarios were examined, with modelling indicating more than 70% reforestation is required to restore stream salinity to a potable threshold of 500mg/L total dissolved salts (TDS). Options that involve traditional agricultural land-uses or perennial pastures will not deliver potable water.