Earlier this month, more than 900 local, regional and state leaders gathered for the largest-ever California Economic Summit to advance a shared agenda for creating inclusive, sustainable growth for all Californians. Public policymakers, private-sector officials and community leaders worked together to identify solutions that holistically address the state’s most pressing issues – affordable housing, quality education, resilient infrastructure, equitable workforce development and sustainable ecosystems – with an emphasis on regional approaches to mobilizing resources.

On the one-year anniversary of the devastating Camp and Woolsey Fires, Summit participants acknowledged that extreme-weather events exacerbated by climate change stand as the greatest threat to our communities, local economies and the ecosystems on which we depend. In the face of California’s drought, fire and flood cycles, local governments must push beyond short-term, small-scale, reactionary planning to foster watershed-scale, integrated development that is socially inclusive, ecologically sound and economically viable.

A safe, reliable water supply and a healthy environment are critical to every community’s prosperity and quality of life for all residents. From that foundation, Summit leaders identified several key priorities to California’s future economic growth, environmental sustainability and social equity:

1. Valuing Ecosystem Services to Incentivize Sustainable Land Management
2. Cost-Effective Water-Smart Development
3. Public-Private Partnerships that Invest in Upper Watershed Management and Restoration

The Economic Value of Our Working Lands and Ecosystem Services

Industries reliant on California’s working lands – areas for agriculture, mining, forestry, outdoor recreation, renewable energy and fishing – collectively generate $333 billion in annual sales and $85 billion in wage earnings, according to a new report by the California Community Colleges’ Center for Excellent and University of California Agriculture and Natural Resources.

These totals make working landscapes the 5th-largest economic driver in the state, coming in ahead of other industries like health care, real estate and construction. These figures don’t, however, reflect the full economic impact of our landscape’s ecosystem services, which remain largely underestimated and undervalued in development models.

Ecosystem services are ways that the working landscapes – farmlands, forests, wetlands, mines and water bodies – provide essential benefits for our economy, health and quality of life. From clean water and nutritious food to climate stability and outdoor recreation, these eco-services are often taken for granted, which leads to underinvestment in our natural systems, particularly in our rural communities.

Several local governments and state partners, however, are leading the way in developing new frameworks for mapping, valuing and investing in our ecosystem services. The Sacramento Area Council of Governments (SACOG) developed the Rural-Urban Connections Strategy (RUCS), a sophisticated set of applications for measuring and modeling the rural economy that accounts for water and land-use changes. The RUCS model explores opportunities to maximize cultivated cropland for multi-use benefits, like habitat restoration or carbon sequestration, and assesses the economic and environmental tradeoffs associated with these potential changes.The Nature Conservancy’s (TNC) Conservation Module is another pilot analytics tool, incorporated into UrbanFootprint, that helps planners, policymakers and advocates measure the impacts of proposed development choices across four key areas: water resources, habitat impacts, agriculture and carbon sequestration.

In partnership with the Sonoma County Agricultural Preservation and Open Space District and the Regional Climate Protection Agency, TNC applied the Conservation Module in Sonoma County to identify housing development opportunities that minimized impact on the environment. The analysis found that, when compared to a lower-density, suburban growth pattern, a transit-oriented, infill scenario:

• Preserved 16,000 acres of natural land.
• Protected 92 acre-feet of groundwater recharge, equal to the annual water use for 455 households.
• Maintained 3,000 acres of natural vegetation within floodplains attenuating flood risk for downstream residents.
• Saved 5,000 acres in drinking water source watersheds.
• Yielded climate-change mitigation benefits from protected carbon stored in vegetation and soils equivalent to removing 100,000 cars off the road per year.
• Kept 3,000 acres barrier-free for wildlife movement.

Quantifying the value of our ecosystem services will help planners, policymakers and landowners analyze existing water and land-use practices, and understand the impacts and benefits of future development scenarios.

Cost-Effective Water-Smart Development

Cities across the state are attempting to meet the needs of a growing population by building new housing – and building it quickly. Water agencies feel the pressure to approve written verifications or water supply assessments that commit them as long-term suppliers; however, these assessments rarely require identification of where that water will come from, or evidence that it will be a continuous source for years to come. Without a long-term water supply identified and secured for new development, residents are at risk of paying extremely high water rates or not having access to adequate water.

Addressing water concerns associated with the need for development can be achieved through equitable approaches to managing water demand and maximizing reuse to ensure reliable supply.

With new water-use efficiency standards coming online in 2022, demand-side management is more important than ever. This can be achieved through community education, cost-reflective pricing, water-efficient technology and water-use restrictions. Urban retail water agencies will have to determine their water use objectives, with set standards of indoor water usage of 55 gallons per capita daily. Urban water agencies will also have to update urban water management plans to specify reliability of water supply. These preparations will need to reflect the needs of a growing population and their water consumption, while maintaining a fairly stable overall community water demand.

An example of successful demand reduction is shown by Santa Monica’s Water Neutrality Ordinance that limits a project to the historical water use for that individual parcel. The permit applicant can choose to instead pay a Water Neutrality Fee, which is designed to fund water-efficiency measures that will offset the entirety of projected water demand for new development. Demand mitigation efforts such as this can be self-sustaining, while minimizing depletion of water supply.

To supplement demand-side management, communities can start increasing local supplies through water reuse. All the water on earth, is all we have ever had or will ever have – which is why treatment and reuse is so vital.

Each region will face its own challenges with reuse, due to the unique hydro-geologies. However, low-impact development practices can be adapted anywhere. Local governments can use permeable surfaces, stormwater capture, and planting trees allows for greater recharge and the potential for reuse. All of these practices can be required on new developments to ensure sustainability of these sites, both environmentally and financially.
A 2013 EPA Case Study Economic Analyses found that low-impact development can cost less than traditional gray infrastructure, and also protects against flooding risk, decreasing costs associated with flood events.

Local governments can take local control to encourage and mandate stormwater capture and reuse methods, which Los Angeles County has done through its Safe Clean Water Program, which set a parcel tax within the county. Revenue goes to projects that capture, treat, and recycle stormwater. Property owners can also apply for credits to pay reduced taxes if they capture or treat stormwater themselves. The emphasis on water reuse decreases reliance on imported resources, which many California regions depend on. By diversifying water portfolios, communities – particularly when planning for new development – can save financial costs of importing water and ensure supply reliability while increasing their resilience to drought and flood risks.

“Tree to Tap” – Public-Private Partnerships for Upper Watershed Resilience

Traditional approaches to wildfire management have been reactive, focused on post-disaster recovery that rebuilds communities and gets water back to residents as quickly as possible. Long-term watershed health, however, will require a more integrated approach that focuses on proactively building communities that are inherently resilient to natural disasters and managing forests in a more holistic way.

One priority identified is ramping up work to thin and manage at least 1 million acres of forested land annually over the next decade. Government alone cannot meet this demand. The U.S. Forest Service is now spending more than half of its budget fighting wildfires, and the cost and scale is only expected to increase. Private capital and enterprise must be part of the solution to unlock needed resources and drive strategic and creative innovations to manage the state’s wildfire crisis.

Yuba County Water Agency’s (YCWA) Forest Resilience Bond pilot project offers one model to attract investment in upper watershed management. In partnership with Blue Forest Conservation and the World Resources Institute, YCWA is raising capital to help cover the upfront costs of forest restoration work, with the primary goal of reducing the risk and cost of catastrophic wildfires in the future. With financing from pension plans, insurance companies and foundations, bond money is funding projects like forest thinning, meadow restoration, prescribed burns and invasive plant treatment to mitigate fire and drought risk.

Investors have committed more than $4 million to the Forest Resilience Bond thus far, and YCWA is supporting the effort with a $1.5 million cost-share contribution to help fund the planned restoration. Through the Climate Change Investment program (CCIP), the State of California has also committed $2.6 million in grants to the project, and the Tahoe National Forest is dedicating in-kind support and services along with the necessary resources for planning and permitting. Part of the pilot also includes research on the project impacts to water quality and watershed health, which may incentivize future investment in upper watershed management.

A healthier, thinner forest reduces fire risk, protects water quality by mitigating sediment and debris that run into water delivery systems, and reduces the cost of future wildfire response. Embracing a “tree to tap” mentality that recognizes our interconnected natural resources and prioritizes collective action across sectors and jurisdictions will be central to helping us achieve a resilient, reliable water supply and a fire-safe state.

Resources

• Droughts, Fires, and Floods: Integrated Planning for Resilient Communities – CivicWell
• Water-Smart Housing Development: Addressing Sprawl and Affordability Concerns through Water and Land Use Integration – CivicWell
• SACOG Rural-Urban Connections Strategy (RUCS) –  Sacramento Area Council of Governments
• Flood-Managed Aquifer Recharge (Flood-MAR) – Department of Water Resources
• California’s Working Landscape: A Key Contributor to the State’s Economic Vitality – California Community Colleges’ Center for Excellence and University of California Agriculture and Natural Resources (UCANR)
• California’s Wildfire Crisis: A Call to Action – CA Fwd and the California Economic Summit
• Forest Resilience Bond Program – Blue Forest Conservations