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Methods for Value of Watershed Restoration 2.2.12B

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Methods for Value of Watershed Restoration 2.2.12B A Brief Economic Analysis of Watershed Restoration Investments: A Case Study of Southwestern Oregon This methodology report was prepared for the Whole Watershed Restoration Initiative and accompanies Ecotrust’s brochure: “The Restoration Economy: Investing in natural capital for the benefit of communities and salmon in Southwestern Oregon” Prepared by Ecotrust Taylor Hesselgrave, Economic Analyst Cathy Kellon, Water & Watersheds Program Director Kristen Sheeran, Ph.D. Updated May 15, 2012 721 NW 9th Ave, Suite 200 Portland, OR 97209 www.ecotrust.org Table of Contents ABOUT THE WWRI AND THIS STUDY ...................................................................................... 3 1. INTRODUCTION ................................................................................................................... 4 2. RESTORATION & THE LOCAL ECONOMY: Southwestern Oregon ................................ 2 2.1. Methods ............................................................................................................................. 2 2.2. Results ............................................................................................................................... 6 2.3. Single Project Analysis: The Rehabilitation of Little Butte Creek ....................................... 8 3. ADDITIONAL BENEFITS FROM RESTORATION ............................................................... 9 3.1. Non-Market Benefits Of Restoration ................................................................................ 10 3.2. The Value of Watershed Supported Recreation .............................................................. 11 3.3. The Value of Rogue River Salmon .................................................................................. 13 4. CONCLUSION .................................................................................................................... 14 REFERENCES ........................................................................................................................... 15 A Brief Economic Analysis of Watershed Restoration Investments: A Case Study of Southwestern Oregon About the WWRI and this study The Whole Watershed Restoration Initiative (WWRI) is a public-private competitive grant program for salmon habitat restoration in river basins of high ecological importance in Oregon, Washington, and Idaho. Coordinated by Ecotrust, WWRI partners include the NOAA Restoration Center, Oregon Watershed Enhancement Board (OWEB), U.S. Forest Service, Bureau of Land Management, the U.S. Fish and Wildlife Service, and the Natural Resources Conservation Service. The initiative awards restoration funding in select watersheds in order to accelerate measurable and sustainable salmon habitat recovery. In addition to direct ecological impacts, the WWRI’s funding partners are also interested in better understanding the economic and social effects of their restoration investments. Fortunately, the Ecosystem Workforce Program (EWP) at the University of Oregon recently conducted a series of studies, funded by OWEB, that quantify the employment and economic impacts of public investments in restoration. The EWP’s resultant working paper, “The Employment and Economic Impacts of Forest and Watershed Restoration in Oregon,” and “Economic Impacts of Restoration Calculator for Oregon v.1.0,” are at the leading edge of socioeconomic analysis of habitat restoration (Nielsen-Pincus and Moseley, 2010). For the first time, practitioners and economists have the tools to estimate restoration’s economic impact. In September 2011, a WWRI tour of restoration projects near Medford, Oregon, provided an opportunity to make use of the new tools from the Ecosystem Workforce Program. Participants in the tour included a range of stakeholders, such as public officials, watershed managers, and local community members. In preparation for the tour, Ecotrust undertook a brief assessment of restoration’s economic impacts in a five-county area of Southwestern Oregon. Relying upon publicly available data and EWP methodologies, Ecotrust generated estimates for employment and economic outputs from restoration investments made in the area between 2000 and 2009. In addition, a brief literature review was done on the non-market values of restoration and resulting improvements to stream and fish health in order to provide a more complete picture of restoration’s value to our communities. The results of this work are presented here. This assessment is brief but the findings are clear: restoration activities create local jobs, typically in rural communities hit hard by the economic downturn. Restoration investments also continue to accrue and pay out over time. Long-term improvements in habitat create enduring benefits, from enhanced recreational and fishing opportunities to the quality of life Oregonians treasure. Cathy P. Kellon Water & Watersheds Program Director at Ecotrust January 2012 1 A Brief Economic Analysis of Watershed Restoration Investments: A Case Study of Southwestern Oregon 1. INTRODUCTION Healthy watersheds provide abundant natural resources and opportunities for Oregonians including clean drinking water, clean air, robust salmon populations, and a variety of recreational opportunities. Healthy watersheds also mean healthy economies; investing in watershed restoration can create jobs and stimulate economic activity for local communities, today and into the future. This paper examines the employment and economic impacts of watershed restoration investments made in Oregon, using economic multipliers recently produced by the Ecosystem Workforce Program of the University of Oregon (Nielsen-Pincus and Moseley, 2010). We examine the economic impacts of direct investments in watershed restoration in the five- county area of Coos, Curry, Douglas, Jackson, and Josephine counties in Southwestern Oregon. As a case study, we analyze the economic impacts attributable to a single restoration project, the Little Butte Creek Meander Restoration Project in Jackson County. To provide context, we then compare our estimates of the economic impacts from restoration activities to the job creation potential of select other sectors. Finally, we present findings from recent literature to address some of the non-market benefits (goods or services with values that are not typically traded in markets or paid for by consumers) and recreational benefits associated with restoration activities. 2. RESTORATION & THE LOCAL ECONOMY: Southwestern Oregon In this section we examine the potential employment and other economic impacts of restoration investments. 2.1 Methods Southwestern Oregon was the focus of our regional case study analysis. The Oregon counties of Coos, Curry, Douglas, Jackson, and Josephine defined our study area (see Figure 1). Dominated by public forests, and characterized by large rivers such as the Rogue (depicted in Figure 1) and Umpqua and many smaller coastal rivers like the Sixes and Chetco, much of the region is rural. For the past two decades unemployment rates in the study area have been above state and national averages. Structural changes in the wood products industry and changes in land management on federal forests initially led to increased unemployment levels as early as the 1980s. In the latest recession, unemployment rates have reached as high as 16% in some parts of the study area (Oregon Employment Department, 2011). Meanwhile, tourism and population growth driven by newly arrived retirees presents new economic opportunities and new demands on public lands and watershed services. Figure 1. Study area region To conduct our analysis we gathered the following data: 1. Details about expenditures`, type, and location of watershed restoration projects occurring in the study area over the years 2000–2009; 2. Restoration related economic and employment multipliers. To gather project data, we considered the multiple funders of such work in the area such as Oregon Watershed Enhancement Board (OWEB), U.S. Forest Service 2 Source: Current study A Brief Economic Analysis of Watershed Restoration Investments: A Case Study of Southwestern Oregon (USFS), Bureau of Land Management (BLM), National Ocean and Atmospheric Administration (NOAA), U.S. Fish and Wildlife Service (USFWS), Oregon Department of Environmental Quality (DEQ), Oregon Department of Fish and Wildlife (ODFW), and Natural Resources Conservation Service (NRCS). Some of these funders had databases documenting restoration activities, including OWEB’s Oregon Watershed Restoration Inventory (OWRI); the United States Department of Agriculture’s Wildlife, Fish, and Rare Plant Management System (WFRP- MS); the USFS and BLM Interagency Restoration Database; and the NOAA Restoration Atlas. OWEB’s OWRI proved to be the most extensive, accessible, and complete database, documenting nearly 13,000 watershed projects throughout all of Oregon from 1995–2009. The relevant projects recorded in the other queried databases were fewer and also mostly accounted for within the OWRI database. This suggests that OWRI may be representative of the entire region; the OWRI data coordinator states, “It is the goal of OWRI to be the central repository of restoration project data in Oregon” (B. Riggers, personal communication, July 19, 2010). Given these reasons and the extensive project monitoring methodology used by OWRI that allows more comprehensive analysis, we used OWRI data for our regional analysis. The five-county query of the OWRI returned a total of 2,350 projects from 2000–2009, the majority
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