Forests are commonly known for the goods that they provide - timber, fuelwood, fodder and other non-timber forest products. Less commonly known is the fact that forests also provide a number of crucial ecosystem services, for example, their role in sequestering carbon from the atmosphere, protecting upstream watersheds, conserving biodiversity and gene-pools for future generations and in providing landscape beauty. Forest environmental services also include regulation of the water cycle and climate, soil formation, nutrient recycling, and plant pollination. While the ever-increasing demand for forest goods is widely recognized, the increased demand and need for forest services is often not as well known.
Water in theory is the most renewable of resources. Yet, careless use, population growth, and increasing demand all mean that provision of adequate safe supplies of water is now a major source of concern, expense, and even international tension. The links between forests and watersheds are complicated and vary with geography, weather patterns, and management. Forests in catchments generally result in cleaner water downstream, thus significantly reducing the costs of purification (to what extent depends on the level and type of contamination). In addition, particular forests such as tropical moist cloud forests appear to increase flow into catchments as well as ameliorate local flooding.
Recognizing this problem, some countries have already started protecting or replanting trees on degraded hill slopes to safeguard their water supplies. Generating more knowledge on this forest environmental service, and developing appropriate payment or compensation mechanisms between upstream watershed service providers and the downstream beneficiaries, will be a key challenge for the forestry sector in the coming years.