Rio Grande Water Fund- Landscape Scale Success Story

As part of thinking about the EADM effort, here’s another (the Rio Grande Water Fund) in the series of landscape-scale success stories. We’ve discussed it before, but now we have this excellent powerpoint from Laura McCarthy of the Nature Conservancy, presented at our 40th class reunion at Yale last fall. She received the Distinguished Alumna award from the school for this and her other work.

Some notable elements of the powerpoint are some photos of the damage caused by fires in terms of flooding and sedimentation.

And the amazing array of partners:

Based on the successes of the Flagstaff project, the Denver Water projects, we might see a pattern in which large scale projects over multiple jurisdictions are easier when 1) there has been a fire with negative effects in someone’s backyard or watershed, 2) leadership from NGOs come forward to do something, and 3) water providers or communities or other NGOs put $ on the table. Placing a bet on fires not happening (the argument that only x % is going to burn, so why spend $ to establish and maintain vegetation) may not be as appealing when the impacts hit you and your neighbors, directly, and within your own experience.

So here’s one hypothesis for why these areas perhaps have greater success in landscape scale efforts, and not, say, California. Because timber was never a big industry in the SW, perhaps the organized opposition to cutting trees (for commercial reasons) has not had an opportunity to develop. So perhaps people, and groups don’t have those issues to work through, at least not to the same degree- you could call this infrastructure established during the Timber Wars. Certainly folks like the Center for Biological Diversity and Wild Earth Guardians are headquartered in the SW, but apparently choose not to go after these projects (or they do, and that aspect has not been highlighted in the write-ups I’ve seen).

Another idea would be that this is tied to water and where water is at a premium people are going to be more careful. Our Regional Forester in 2, at the time, Rick Cables was thinking maybe California should donate to Colorado fuel treatment projects because they use Colorado River water. I don’t think that that worked out..

So please take a look at the powerpoint and share your thoughts. Also, I’m still looking for successful landscape scale projects outside of Regions 2 and 3. I’m sure they’re there, but I can’t as easily find out about them.

3 thoughts on “Rio Grande Water Fund- Landscape Scale Success Story”

  1. Here in California, there really isn’t a lot of eco-angst against the current thinning projects under the Sierra Nevada Framework. There is a problem with the “pace and scale” of such projects. 3000-5000 acres of thinning per year, per Ranger District is about all they can do with the current workforce. The bottleneck isn’t the analysis and paperwork. It is in implementation. I guess they could go to a “Designation by Description” situation but, that requires special prep and admin expertise, as well. I doubt that the eco-folks will stand by while the loggers get to pick which trees live and die.

    • Interesting, thanks, Larry! It’s refreshing (in an odd way) to think that in some places the problems are not related to project planning 🙂

  2. I interviewed McCarthy last year for The Forestry Source. Here’s the Q&A — long post, but maybe helpful….

    Rio Grande Water Fund Invests in Water Security

    By Steve Wilent
    Water, for better or worse, has often been viewed as a “free” forest resource, even in the arid southwestern United States. Water utilities and irrigation districts typically pay little or nothing for the water they distribute, and the fees they charge for the delivery of that water support the construction and maintenance of delivery infrastructure. Until recently, this was the case in north-central New Mexico, along the Rio Grande. Then in 2014, an array of government agencies, corporations, nonprofit organizations, and individuals, led by The Nature Conservancy, joined the Rio Grande Water Fund as investors. Their investments have paid for fuels management, prescribed fire, and forest-restoration projects in key watersheds that serve the cities of Albuquerque and Santa Fe, as well as other communities, an area encompassing about 1.7 million acres of fire-prone ponderosa pine and mixed-conifer forest. The fund’s goal is to treat 600,000 acres over 20 years. Since 2014, the fund has received $3.6 million in private investments and $30 million in public funding, and has treated 70,000 acres.

    SAF member Laura McCarthy is associate state director for The Nature Conservancy in New Mexico, the lead fund organizer. Among other duties, she oversees the water fund. McCarthy has been with the Conservancy since 2005, including seven years as its senior policy adviser for fire management and forest restoration. Her prior work includes more than a decade with the US Forest Service as a firefighter and planner. She has also worked for the New Hampshire State Forester and the Forest Guild. She has been an SAF member since 1987 and was co-chair of the National Committee on Forest Health and Productive from 1994 to 1996. She received the SAF Young Forester Leadership Award in 1998.

    I spoke with McCarthy in October to learn more about the fund and its work.

    Laura, in reading the Rio Grande Water Fund’s 2016 annual report, I was struck by the list of fund investors—not donors or contributors, but investors—with more than 50 government agencies, corporations, organizations, and individuals listed. Why are investors needed, and why do they invest?

    The Rio Grande Water Fund is a public-private partnership that is aiming to provide water security. So the beneficiaries of the water that comes from the Rio Grande watershed are essentially investing in the restoration of forests in order to get a return on their investment, in the form of a clean, reliable source of water. And that’s why it’s the Rio Grande Water Fund, not something like the Rio Grande Forest Fund.

    I like the term “beneficiaries”—we’re all beneficiaries of forests, directly or indirectly.

    Exactly. We got into this because we had a big problem on our hands. The forests in the Southwest, and in northern New Mexico in particular, have been going through a transition, where fire behavior has changed dramatically from historical conditions. And it’s changing at a scale that’s affecting millions of acres of forestland. Scientists have been telling those of us who manage forests to scale up the pace of restoration for almost 20 years, but it’s really hard to do that, especially when the forests are in a condition where there is so little commercial value out there. Woody biomass is not going to pay its way out of the woods. So we created this water fund in order to take the primary benefit—water, and the reliability of that water—and create a mechanism for people to start paying for something that for decades had been free.

    Is there enough commercial value in the timber to make a dent in paying for restoration? And is the forest-products industry in New Mexico able to use the amount that needs to be removed?

    There is some industry infrastructure remaining, and those who remain are wily and tenacious. There are three main sawmills in the water fund area, and they’ve figured out how to weather the economic downturn, as well as the highly variable wood supply from public lands. I give them credit for being good business managers and resilient operators. In talking with them about the economics of the situation, they’ve told me that it’s really tough, because ratio of commercial-sized trees to biomass for which there is no market is extraordinarily high—lots of biomass, few sawlogs. At best, the commercial timber can help reduce the per-acre cost of restoration by a few hundred dollars per acre.

    I read that it costs an average of about $700 to thin an acre in the water fund area.

    And that reality has really been sinking in for us over the last year. As we been more successful in planning treatments and getting contracts in place to pay for restoration work, the reality of the low value of the material has become more evident.

    I also read that the fund has enabled a tripling of the number of acres treated compared to the typical amount done before the fund was established. In other words, it has increased the pace and scale, to use the popular phrasing, of restoration work.

    Right. I’m just putting our 2017 numbers together, and it looks like we’ve increased the pace and scale quite a bit over 2016. This year we treated 49,000 acres, and we are planning for treatments on another 200,000 acres.

    Tell me about the return on the investments that water fund investors realize. It’s not a monetary return such as you might realize from financial investments, but rather a decrease in the likelihood of a severe fire and thus less risk of disruptions to the water supply.

    Exactly. It’s an avoided cost.

    Who are the key players in the fund, aside from The Nature Conservancy?

    The key players are the land- and resource-management agencies, primarily the US Forest Service and the New Mexico Department of Game and Fish, as well private landowners.

    On the investment side, the most important players are the Albuquerque Bernalillo County Water Utility Authority, a municipal utility, and the Middle Rio Grande Conservancy District, a major irrigation district. Until now, these agencies haven’t invested in protecting the places where their water comes from, and it was a lengthy process to convince them that they should become investors. But it was a positive process. Municipal water utilities have been around for 100 years or so, and they’ve never paid for the water itself—they’ve paid for pipes—infrastructure—and water treatment. It’s the same with irrigation districts—they pay for canals and head gates. The idea that the surface water that they are used to withdrawing may not be as reliable in the future … it took them a while to think that through.

    I can imagine it would be difficult to calculate the future value of a more reliable water supply.

    Sometimes you have a clear one-to-one relationship, such as in our proof-of-concept water fund, the Santa Fe Municipal Watershed Investment Plan, where it’s really obvious: There are two reservoirs, they’re in a closed basin on national forest land, and all of the water in the reservoirs goes to the city of Santa Fe. It’s simple. But in the Rio Grande basin, the benefits are shared by many parties. For the water utility and the irrigation district, it was very important that they not be the only ones paying into the Rio Grande Water Fund. They needed to see that others were making a financial commitment. Once we got to the $2 million mark, they realized that if they invested they would not have bull’s-eyes on their backs, that they would be paying their fair share, and that the burden would be shared by everyone.

    So who jumped in first?

    The first investors were the US Forest Service and the LOR Foundation, a private foundation that put in $1 million in 2014. The LOR Foundation provided funding to be distributed by the water fund as proof of the concept and as a catalyst. And others followed their lead, such as the Taos Ski Valley Foundation and corporations like General Mills, Wells Fargo Bank, PNM Resources, an investor-owned electric utility, and others.

    Why would companies like General Mills and Wells Fargo invest in the water fund?

    General Mills is a large water user, and they have a corporate policy on water sustainability. For them, investing in the Rio Grande Water Fund is putting their money where their mouth is. For Wells Fargo, it’s more about the connections between water security and economic growth—they’re investing in the economic future of New Mexico.

    Does General Mills have processing plants that use a great deal of water in New Mexico?

    They do have a plant in New Mexico, but all of the grain and other raw materials that it uses are shipped in, so they are not a big water user in New Mexico. But they are big water user in North America and Latin America, especially Mexico, where a lot of the raw materials come from.

    We have a panel discussion during one of the technical sessions on Friday at the SAF convention in Albuquerque, and one of the speakers is from the Albuquerque Chamber of Commerce. He will be talking about why this is of interest to businesses. It should be really interesting, because he will offer a different perspective on why the work that we foresters do in these critical watersheds matters to businesses. Not wood-using businesses, but all of the other sectors of business.

    What is the general public’s perception of the water fund?

    We’ve done a fair amount of polling about fire and water, to understand the public’s attitudes, and what we learned was that people’s memory about fire is a lot longer than you might expect. When we did polling in 2010, we learned that people remembered the Cerro Grande Fire from the year 2000 pretty clearly, and part of what they remembered was that people went without water when the water infrastructure was damaged by that fire.

    As a result of our being able to connect forest management with wildfires and water reliability, we’ve learned that we have a really bipartisan issue here. We’ve done some policy work with the New Mexico legislature, and we have unbelievable bipartisan support. You can see from the list of charter signatories to the water fund in the annual report that there are organizations on the list that would normally not agree on anything [regarding forest management].

    One of the charter signatories, the Sierra Club, isn’t known for supporting active forest management. But it does in this case?

    Correct. We have direct involvement from a number of groups. It’s pretty hard to deal with the management of 600,000 acres all at the same time, so you have to work on one focal area at a time. We’ve required that all of the focal areas have collaboratively developed landscape-restoration plans or strategies in place, and it’s very important that the development of those plans and strategies includes diverse partners.

    At the SAF National Convention later this month, McCarthy will present “Introduction to the Rio Grande Water Fund: Setting the Stage” to kick off a series of presentations about the fund and managing forests in the Rio Grande watershed (1:30 pm on Friday, November 17, in the Cimarron Room). For information on these and other scientific and technical sessions, visit


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