External Costs Arising from the Effects of Forests upon Streamflow in Britain

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Abstract
Forests evaporate more water than agricultural lands do and so reduce streamflow. External costs arise when Water Boards have to invest earlier in new water supply works because forests have reduced the amount of water available from existing sources. Small forest areas of, say, 1,000 acres do not usually affect investment dates, but larger areas of, say, 10,000 acres may incur net discounted costs of from £0 to £50 per forest acre in Britain. An accurate cost assessment requires knowledge of the effect of a forest on stream-flow, the spare supply capacity of existing water sources, the rate of increase in demand for water and the consequent date and cost of building the next water supply works. It is therefore difficult to predict if a forest water cost will arise or when and how much it might be. Since it may not pay to fell trees in mid-rotation, the community or forest owners may have to pay some substantial forest water costs. This does not necessarily mean that forests should not be planted on water catchments. Water costs may never arise, may be insignificant or may arise too late in the rotation to affect seriously the profitability of a particular plantation.

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