New research from Montana State economist shows how wetland restoration can benefit local economies

BOZEMAN – In new research in the Journal of the Association of Environmental and Resource Economists, a Montana State University economist makes the case for “nature’s kidneys,” aiming to quantify the economic impact of wetland restoration for their surrounding communities.

Ecological research has shown that wetlands play a crucial role in filtering chemicals out of their watersheds, said Nicole Karwowski, an assistant professor in MSU’s Department of Agricultural Economics and Economics. They help to maintain water quality and ensure that ecosystem nutrient levels remain in healthy balance.

But as wetland areas have been impacted by development and agricultural production, many of those benefits have been hampered. Now, Karwowski is researching the economic impact of restoring those ecosystems through a program from the federal Natural Resources Conservation Service called the Agricultural Conservation Easement Program. Through its Wetland Reserve Easement component, the program provides incentives to landowners to remove acreage from agricultural production and restore it to its previous natural state in perpetuity.

The paper, titled “Nature’s Kidneys: the Role of Wetland Reserve Easements in Restoring Water Quality,” was a collaboration between Karwowski and co-author Marin Skidmore of the University of Illinois at Urbana-Champaign. In the research, the authors found that wetland easements reduce ammonia and nitrogen concentrations in local waterways, with those impacts extending downstream from the wetlands themselves. In turn, those water quality impacts mean decreased costs for communities through reduced water purification needs.

Karwowski’s interest was piqued during her graduate studies at the University of Wisconsin when she first discovered the WRE program.

“There were not a lot of studies done on this program, especially in the economic space, and there were so many interesting policy questions,” she said. “The scientific literature has for a long time known about how magical these wetlands are, and economists haven't taken as big of a role in quantifying some of those ecosystem services. That’s where I saw myself contributing to the literature.”

Through WRE, the federal government pays producers between $1,000 and $3,000 per acre to retire land from agricultural production and support its restoration into wetland. In so doing, the land no longer requires the application of nitrogen fertilizer and other agricultural supplements. Those reductions, coupled by the renewed filtration power of the restored wetlands, create less demand on local water filtration systems. Those changes, according to Karwowski’s research, meant tangible savings for communities across the country that, in some instances, reached up to $17,000 per year in larger communities through reduced water purification costs.

“That can be meaningful, especially for smaller rural towns,” Karwowski said. “The cool thing is, we're seeing that federal dollars are going toward this program, and it's local municipalities that are benefiting.”

Karwowski said there are roughly 30,000 acres of wetland easements in Montana. That investment, coupled with the intersection of the state’s extensive agricultural and recreational economies, makes MSU an ideal place to be exploring the impacts of programs like WRE, she added.

Karwowski has worked with hydrologists, geologists and water quality specialists, in addition to local organizations like the Bozeman office of the Natural Resources Conservation Service and recreational groups like Ducks Unlimited, to better understand the agricultural, ecological, economic and community benefits of restored wetlands.

“Agricultural producers are known as stewards of the land, so how can we support them in the best ways to keep doing that, benefiting from these ecosystem services that their agricultural best management practices are providing?” she said.

“Protecting these unique ecosystems is something that is very valued in Montana given the love of outdoors and the abundant recreational opportunities. My hope would be that in the future, we continue funding programs like this, because we realize that there are valuable effects going toward our communities, especially our rural communities.”

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This story is available on the Web at: http://www.montana.edu/news/24992