The Business and Regulatory Environments of Watershed Restoration

Relatively little is known about the characteristics of the sector of the economy that engages in watershed restoration, making it difficult to understand how to promote businesses to invest in this emerging field. This report surveyed firms that engage in federally-contracted watershed restoration work to begin to understand this topic. Watershed restoration firms cluster in the Pacific Northwest and Great Lakes regions, with those in the former region primarily undertaking road and stream work, and those in the latter region generally engaged in wetland-related activities. The firms tend to be small businesses that employ less than ten people and have annual revenues of less than one million dollars. The majority of the firms principally engage in construction activities, but many forestry, consultative, and administrative firms exist as well.

An effective regulatory structure is critical both for guaranteeing appropriate, effective and quality restoration work, and for promoting the health and viability of restoration-related businesses. For this paper, the author interviewed restoration practitioners and conservationists, while also reviewing some key components of the regulatory structure for watershed restoration. While conservationists raised concerns about any regulatory changes that might reduce the effectiveness and quality of restoration, practitioners raised concerns about the expense, complexity, duplicativeness, and time-consuming nature of the permitting process and about the potential for long-term liability if their work fails for unforeseen or unintended reasons at some point in the future. Streamlined and coordinated watershed restoration permitting processes could alleviate some of the perceived permitting problems while also protecting the integrity of the projects. Similarly, state or federal agencies could implement a wider variety of permit shield for properly designed and implemented watershed restoration projects to reduce practitioner liability while ensuring quality work on the ground.