JOURNAL OF THE AMERICAN WATER RESOURCES ASSOCIATION VOL. 38, NO. 2 AMERICAN WATER RESOURCES ASSOCIATION APRIL 2002 INTEGRATED MODELING FOR WATERSHED MANAGEMENT MULTIPLE OBJECTWES AND SPATIAL EFFECTS' Stephen C. Newbold2 ABSTRACT: This paper presents an optimization framework for prioritizing sites for wetlands restoration on a watershed or land- scape scale. The framework is designed for analyzing the potential environmental impacts of alternative management strategies while accounting for economic constraints, thereby aiding decision mak- ers in explicitly considering multiple management objectives. The modeling strategy consists of two phases. First, relationships between the configuration of land use types in a watershed and val- ued ecosystem services are specified mathematically. Second, those functions are incorporated into a spatial optimization model that allows comparisons of the expected environmental impacts and eco- nomic costs of management strategies that change the configura- tion of land use in the watershed. By way of a stylized example, this paper develops the general structure of the framework, pre- sents simulation results based on two production functions for ecosystem services, and discusses the potential utility of the methodology for watershed management. (KEY TERMS: modeling; optimization; ecosystem services; wet- lands restoration; site selection; habitat quality; water quality.) INTRODUCTION In the last two centuries nearly half of all wetland acres in the conterminous United States have been drained or filled in efforts to "reclaim" these lands for agriculture and other uses (Dahi, 1990; Dahi and Johnson, 1991; Dahl, 2000). Many of the benefits of natural wetland systems were lost in the process. Wetlands can provide water quality enhancement, flood management benefits, opportunities for recreation, habitat for valued species, stability to global elemental cycles, and more (Mitsch and Gos- selink,' 1993). Unfortunately managers generally do not have the tools to effectively incorporate considera- tions of these ecosystem services into on-the-ground management decisions. Various efforts are underway to address this shortcoming (e.g., see Hruby et al., 1995; Smith et al., 1995; Coiacetto, 1996; Llewellyn et al., 1996), but the gaps between basic research in hydrology and ecology and the practice of watershed management are still large. This paper presents a framework designed to aid decision makers in explicitly considering multiple environmental objectives for management on a water- shed scale. The framework focuses on wetlands restoration decisions and the spatial interactions that affect the level of ecosystem services wetlands can provide. Application of the framework proceeds in two distinct modeling phases. In the first phase functions are specified to describe the relationships between the extent and configuration of wetlands and other land use types in a watershed to the provision of valued ecosystem services. In the example presented in this paper functions were specified for two classes of ecosystem services: "water quality," for which the nutrient load to the river was used as the endpoint, and "habitat quality," for which the abundance of an umbrella species was used as the endpoint. In the second phase, these functions are incorporat- ed into a spatial optimization model that allows com- parisons of the expected environmental impacts and economic costs of various management goals and strategies. Here "management goals" refers to the intentions of the regulator with respect to the ecosys- tem services considered — whether the manager wants to minimize nutrient loads, maximize species abun- dance, or some weighted combination of these. "Man- agement strategies" refers to the means by which the manager attempts to achieve the specified goal — the 1Paper No. 01100 of the Journal of the American Water Resources Association. Discussions are open until December 1, 2002. 2ph.D. Candidate, Graduate Group in Ecology, Department of Environmental Science and Policy, One Shields Ave., University of Califor- nia, Davis, California 95616 (E-Maillscnewbold@ucdavis.edu). JOURNAL OF THE AMERICAN WATER RESOURCES ASSOCIATION 341 JAWRA