Interest in the environmental benefits provided by forests and watershed management has never been greater Bonell and Bruijnzeel, 2004;. Chief among these are the effects that good stewardship may have on water supply and water quality. Out-of-stream demands for irrigation, hydropower, and urban and industrial uses continue to increase just as there is growing evidence and awareness regarding the increasingly negative impacts that such diversions have on recreation and fish stocks.
Investments in forest conservation and watershed management and the derivation of new regulations and market incentives in this regard are gaining increasing prominence in both temperate and tropical zones (The Economist, 2005). A systematic understanding of the relationships between upstream land use, hydrology and downstream economic activity, as well as practical methods for the quantitative evaluation of these linkages, are required if policy making and 'green' project investments are to be successful. This is particularly the case where conventional wisdom among policy makers, agency staff and environmental nongovernmental organizations about cause and effect in watershed science is questionable on scientific grounds.
Conventional wisdom holds that forest conversion (or 'deforestation') in developing countries, or clear-cutting in developed countries, leads to large costs in terms of losses in on-site productivity and costly sedimentation of downstream hydropower, water supply and irrigation facilities. In addition, conventional wisdom holds that the forest attracts rainfall and acts as a sponge, soaking up and storing excess water for use at later times, thus providing benefits in terms of increased water supply, flood reduction, improved navigation and dry-season flow to agriculture and other productive activities. Although these views seem to be shared across developed and developing regions, they are often emphasized in humid areas of the tropics where 'rainforests' are the dominant natural vegetation type.
The conventional wisdom regarding the relationship between forest conversion (and reforestation) and water yield, seasonal flows, flooding and precipitation is often at odds with the scientific understanding, particularly in the tropics Bruijnzeel, 2002). Much, however, remains to be learned in this regard, as many of the existing studies have been undertaken at small scales (less than 10 km 2 ) in headwater basins and over relatively short durations, making accurate extrapolation and 'upscal-