Investing in sustainable catchments.

Catchments constitute logical units for management of the water cycle. Patterns of development uninformed by sustainability concerns have degraded catchment integrity and associated ecosystem functions, imposing largely unquantified costs. Ecosystem functions are central to sustainable social and economic progress; their protection or restoration may be the only sustainable form of investment in catchments. Despite growing use of catchment functions in some policy areas, a shortfall in awareness and pragmatic tools limits progress with policies and practical tools to support sustainable development in catchments, perpetuating damaging practices. This paper reviews methods of economic valuation of riverine systems. Valuation of ecosystem functions is revealed as particularly pertinent to sustainable development, as an indicator of the benefits of ecological processes to social and economic progress. A range of practical projects, targeted at restoration of riverine habitat in the UK with the intent of improving both river ecology and the social and economic advantages that flow from it, is also reviewed. Emerging principles and themes are discussed in terms of their potential contribution to policies and practices that promote sustainability. Review of these projects highlights the importance of planning at adequately broad scales--spatial, temporal and disciplinary--to identify integrated solutions, and to maximise community "buy-in" and total benefits. In several cases, economic analyses demonstrate strongly positive benefit-cost ratios stemming from habitat improvement. However, major reform of regulatory and economic instruments is needed to promote sustainable catchment development, since prevalent "perverse" incentives continue to degrade ecosystem functions. Measures to recognise and reward ecosystem service as legitimate outputs from agricultural land use constitute a particular priority. There is a need simultaneously to address both "big picture" structural adjustments and locally-appropriate solutions, from which clear local benefits flow. Pragmatic measures that contribute to systemic outcomes must also be attractive to local decision-makers and land managers, and yield benefits that ensure they are sustained once intervention ceases. Cost need not be a barrier, as current environmentally-damaging subsidies may instead be redirected towards sensitive land use and/or measures to protect biodiversity and ecosystem functioning, particularly where targeted upon habitat of disproportionate importance to functioning of catchments as whole systems. Internalisation of the costs of damage to ecosystem functioning will promote valuation of the natural capital of catchments as a primary resource for social and economic progress.