Economic valuation of ecosystem services at the watershed scale for strategic land-use planning

Summary Sustainable management of watersheds to secure freshwater resources and maintain ecological stability relies on adopting land-use strategies supporting diverse ecosystem services through natural processes. This necessitates systematic evaluation of prospective land-use practices and their associated costs and benefits. We conducted a comprehensive economic evaluation of pro-watershed land-use options, focusing on a well-recognized agroforestry system with alternative organic cultivation in the Navnera watershed in Rajasthan, India. We adopted the ‘total economic valuation’ framework, using the revealed preference approach for monetary evaluation and modelling indirect benefits primarily through Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST). Our findings indicate that the total economic value of ecosystem services in this watershed has the potential to increase by 4.6% with the adoption of agroforestry and only by 1.3% under organic farming compared to current land-use practices. While agroforestry might reduce farmland revenue and water yield, it compensates for these with other important environmental benefits such as water purification, sediment reduction, nutrient retention and carbon sequestration. This local-scale appraisal of ecosystem services helps policymakers understand the cost–benefit dynamics of watershed land-use changes, which is vital for developing effective management strategies through the involvement of local communities.