Estimating the economic value of water quality provision in the Fars oak forests (Iran)

This research aims to estimate the economic value of water quality(physico-chemical) provision in the Fars oak forests (Iran). The economic value of water quality provision was assessed using substitute cost (water treatment) and cost avoided methods. Economic value of water quality provision was estimated based on the existing water quallity function and the annual high-quality water produced in the studied forests as well as the water treatment cost function. The annual provision of high-quality water (runoff and soil water storage) was estimated through calibrating and simulating the WEPP (Water Erosion Prediction Project) model in the studied forests. The water treatment cost function was estimated using translog function and the data of 19 water treatment plants at current prices of 2017. The result showed that a hectare of Fars oak forests provides 2573 cubic meter of high-quality water annually. Moreover, 1% raise in forest crown cover found to decrease the cost of water treatment by 0.11%. As such, the minimum value of water quality provision in the Fars oak forests with 2% real discount rate and current prices of 2017 was estimated to be 605 million IRR (Iranian Rials) per hactare. Further research is required to estimate the economic value of water quality provision (biological and physico-chemical), especially compared to agriculture and urban alternative land uses.