Abstract The Zagros forests provide vital ecosystem services, but their economic value is often overlooked in policy, leading to degradation. This study quantifies and compares the economic value of water storage and soil conservation services between forest and rangeland ecosystems in the Kolm watershed, Ilam, Iran. Using hydrological modeling (Justin and Turk methods) and the Modified PSIAC model for erosion assessment, we applied the replacement cost method for economic valuation. Our results demonstrate the overwhelming superiority of forests: they stored 2.4 times more water than rangelands, with an economic value of 301.50 USD/ha/year compared to 126.75 USD/ha/year. Forests also conserved significantly higher levels of soil nutrients and reduced erosion more effectively. The annual economic value of soil nutrient conservation was 64% higher in forests. These findings provide policymakers with robust, quantified evidence of the severe economic losses associated with deforestation. We urgently recommend integrating these values into land-use planning, implementing Payment for Ecosystem Services (PES) schemes, and prioritizing forest conservation to safeguard water security and soil fertility in the Zagros region.The dual-currency valuation in this study enhances the results’ applicability for both local decision-making and global comparisons. Highlights ● Zagros forests stored 9,995,758 m³ of water, significantly higher than rangelands (2,388,314.5 m³). ● Erosion rates were 3.92 tons/ha in forests vs. 4.27 tons/ha in rangelands, demonstrating forests' critical role in reducing soil loss.. ● Economic values were calculated in both IRR and USD, making findings relevant for local policymakers and international comparisons. ● The study underscores the urgent need for sustainable forest management in the Zagros region to preserve these ecosystem services and their economic benefits.
