In North America, water quality trading hit a $10.7 million high in 2013 (the last year for which data is available), as markets gained scale and new actors entered the scene, including private entrepreneurs developing credits for the market. Cost-share agreements to manage wildfire risk on the United States’ forested public lands also flourished, though the country still faces an enormous backlog of restoration needs on public lands, covering as much as 48 million hectares.
At a Glance: Watershed Investment in North America
|Programs in development
|Total land area managed for watershed services (hectares)
- Aggregate investment values for IWS in the United States fell slightly to $383M in 2013 from an all-time high of $393M in 2012 as federal funding declined. But new areas of growth – including cost-share agreements between federal agencies and western water service providers, activity in water quality markets, plus new funding for instream buybacks programs – that added $14M in value between 2012 and 2013 partly made up the difference.
- Water quality trading markets saw aggregate values hit their highest mark yet: $1M in 2013. But behind this number are some tectonic shifts: older markets saw trading volumes fall, leaving newer programs to buoy growth. The private sector also delivered an unprecedented level of activity on the supply side of markets, with revenues from credit development reaching nearly $2.5M in 2013.
- Buyers in the United States committed at least $400M to programs for the 2014-2020 period. But while this number likely underestimates actual commitments – only 20 out of 63 buyers reporting commitments provided specific figures – anticipated funding levels pale in comparison to restoration needs in North America’s headwaters areas.
- The center of growth shifted west: two-thirds of new programs between 2010 and 2013 have emerged in the western part of North America, thanks to new interest in avoiding water supply disruptions through forestland management and receptiveness from federal public land managers. The trend is set to continue, with five out of seven developing programs also based in western U.S. states.
Forest Trends’ Ecosystem Marketplace’s Watershed Connect Program Inventory: http://www.watershedconnect.org/programs
Forest Trends’ Ecosystem Marketplace’s State of Watershed Investment 2014 report, Chapter 9: http://www.forest-trends.org/documents/files/SOWI2014.pdf