The value of groundwater in European Forests

The report – the Study on the Economic value of groundwater and biodiversity in European forests – explores the current state of payments for ecosystems (PES) in EU member states in relation to forests and groundwater.

Forest and stream

Over the past 30 years the number of areas and people affected by droughts across the EU went up by almost 20%. Drought conditions are exacerbated, if not created, by increased population density and land development which, in turn, may be made even worse by global warming.

While the demand for clean freshwater continues to increase, the capacity of ecosystems to provide such services is hampered by their ever growing degradation. The availability and quality of water in many regions is threatened by overuse, misuse and pollution. However forests can protect water supplies as managed forests usually have a lower input of nutrients, pesticides and other chemicals than more intensive land uses such as agriculture. Forests can also protect soils and reduce erosion rates.

The prices currently charged to consumers for water consumption are not a reliable indication of its actual value and the protective functions of forests are seldom leading to any income for forest owners. This in turn means there are insufficient financial resources to protect the ecosystem services essential for providing the water. Therefore payments for ecosystem services (PES) are increasingly seen as crucial for the sustainable environmental management of forests.

The PES approach to forest management is attractive for a number of reasons as it:

  • Generates new financing which would not otherwise be available for conservation

  • Is likely to be sustainable

  • Is likely to be efficient

This report shows that PES structures already exist in a number of EU member states which fund afforestation and sustainable management practices and thus support, maintain, and even develop the protective functions of forests with regards to groundwater.

The case studies in Denmark, Germany, Spain and Austria show that PES schemes can range from voluntary compensation to non voluntary compensation schemes for forest maintenance, afforestation, reforestation and sometimes agro-environmental activities.

In addition to countries groundwater compensation structures, a variety of EU funds and financial instruments address environmental and social dimensions of sustainable forest management and environment in general. Those funds might provide additional financial resources to develop and implement forest-groundwater PES schemes.

For more information please see the executive summary.

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