The Value of the Reservoir Services Gained with Soil Conservation

Abstract

To evaluate the impact of soil conservation on reservoir services, we extend replacement cost theory to cases where reservoir benefits are restored or preserved for multiple years. The framework is used to value the effect that a marginal change in soil erosion has on current and future reservoir benefits. Results show that, across the 2,111 U.S watersheds, a one-ton reduction in soil erosion provides benefits ranging from zero to $1.38. Furthermore, in a policy application, the lower soil erosion level in 1997, relative to 1982, was shown to have conserved $154 million in reservoir benefits.

Keywords: soil conservation benefits, environmental asset, replacement cost theory, reservoir benefits, reservoir sedimentation

JEL Classification: Q26, Q51, Q58