Natural Capital Accounting on Forested Lands in the United States: An Application to the Colorado River Basin
This is a preliminary draft and may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.
This paper creates a first set of forest natural capital accounts and demonstrates how these accounts can be integrated with general equilibrium models of the economy. Focusing on the Colorado River Basin, we show that deforestation has direct implications for the forest industry and indirect impacts on the economy through water treatment costs and carbon stock. 327,000 acres of forest are projected to be lost to development by 2100, representing a loss of 1.3 million tons of carbon stored in forests. The direct economic impacts associated with forest loss are estimated to be over $30 million, with $28 million of that coming directly from the value of lost carbon.