In the Brantas River Basin of East Java, Indonesia, deforestation for agriculture has led to increased soil erosion, loss of biodiversity and decreased water retention. These impacts have made floods more severe and reduced groundwater recharge. Downstream, water scarcity has become a problem during the dry season. Floods and droughts are expected to worsen with climate change, and if no action is taken, land degradation will continue.
This report present the Sustainable Asset Valuation (SAVi) assessment for the Maintaining and Enhancing Water Yield through Land and Forest Rehabilitation (MEWLAFOR) project. The assessment quantifies the ecosystem services and economic impacts of the planned reforestation and water retention wells. It also calculates the net present value and internal rate of return of the project, for which the avoided costs and added benefits are counted as revenue streams.
The SAVi shows that the nature-based infrastructure solution of land restoration is more cost effective than building a reservoir for water storage and also provides significant societal benefits. Specifically, over 20 years, these interventions generate net benefits of between $104.34 million and [email protected] million in avoided flood and erosion damages along with improved water quality, carbon storage, job creation, agroforestry and bamboo production.