Restoring natural wetlands through financial incentives based adoption of constructed wetlands on agricultural farms

Abstract

Municipal effluents running off into natural wetlands pose significant challenges to the latter's sustainability while also threatening the livelihoods of dependent communities. In this study, the potential for promoting constructed wetlands on agricultural farms is explored as a means towards restoring degraded natural wetlands. Specifically, a payment for ecosystem services mechanism is developed where farmers are compensated for discharging treated wastewaters into streams entering natural wetlands. Farmers can also utilize the treated wastewater for irrigating their crops, thus augmenting farm incomes. An optimization model derives constructed wetland adoption rate on agricultural farms in order to maximize ecosystem services benefits and farmers' incomes. Ecosystem services from wetlands include direct benefits to the community through the availability of clean water and improvement in fish stock abundance through reduced nitrogen concentrations in the natural wetland. Results suggest that such payment for ecosystem services mechanisms are likely to provide strong incentives for constructed wetland adoption when both water quality valuation and fisheries-based incomes are taken into consideration. This study contributes to the literature on cleaner production and sustainability through the design of a framework for incentivizing constructed wetland technology adoption on private farms that would result in restoration of degraded natural wetlands and mitigation of pollution in rivers and waterbodies, thereby increasing their long-term sustainability.