Economic Value of Environmental Services Regulating Flow and Maintaining Water Quality in the Piracicaba River Basin, Brazil

From distributed or semidistributed hydrological models, it is possible to identify where land use decisions can bring greater economic benefits in relation to water use. This study aimed to integrate simulations of a hydrological model varying the land use in four reforestation scenarios that influence the economic benefits of provision environmental services, including the user's alternatives as a key parameter and finally estimating the economic value of such benefits. The "avoided costs" method was used for economic valuation of flow regularization service and adequacy of water quality in the Piracicaba River basin, aiming to generate various economic instruments to support decision makers. The cost for water storage was estimated from the rising rain volume infiltrating the soil from the change in the dynamics of land use, whereas the cost of maintaining water quality was obtained from the variation between the effects of scenarios in nitrogen, phosphorus, and sediment loads. The valuation methodology allowed us to estimate the avoided costs, which will mainly contribute to application of economic instruments to manage water resources, directing land use decisions in hydrographic basins, guiding environmental impact assessment studies, and the definition of mitigation measures.