Like many water utilities facing growing demand and the effects of climate change, the local water company, EMASA, must invest carefully to secure water for its fluctuating customer base.
By investing in “natural infrastructure” such as forests through conservation and restoration, EMASA controls soil erosion and the resulting sediment entering the Camboriú River.
The result is reduced water treatment costs and water losses.
As EMASA’s Environmental Engineer Rafaela Santos says, “This river is the only supply that we have to Camboriú and Balneário Camboriú municipalities, so it’s important that EMASA invests in actions to preserve this resource to last more time and with a better quality”.
Yet, remarkably few credible examples of such business cases exist for watershed conservation.
Applying this ROI framework to the Camboriú watershed conservation program, they found that reductions in sediment treatment cost and water losses offset 80 percent of the water company’s investment in the program over a 30-year time horizon, and all of its investment over time horizons of 43 years or more.
Recognizing these additional benefits provided by the program, the Balneário Camboriú municipality is concluding a review of a new water tariff structure for EMASA that recognizes watershed conservation as a supply measure and would cover the program’s full operational costs.
These findings are typical of the economics of watershed conservation and illustrate the difference between the economic case (ROI of the program overall) and the business case (ROI for specific water users) for watershed conservation.
This ROI framework offers a useful template to any water user evaluating how to secure their water supply.
For EMASA, this journey began with recognizing nature as water infrastructure, to be considered and financed as other water collection and treatment infrastructure.