Payments for watershed services: conservation, development, both or neither?

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Watershed services: who pays and for what?

Payments for watershed services: opportunities and realities

 

An innovative approach to managing water resources could bring social, economic and environmental benefits in developing countries, but as major new research shows, all that glitters is not gold.

The research by the International Institute for Environment and Development (IIED) and its partners will be presented today (16 August) in Sweden at World Water Week, a gathering of 2,500 water experts from 130 nations.

The UK Department for International Development funded the four-year study, which focused on 'payments for watershed services' - a way of compensating wise use of land and water upstream that bring benefits to water users downstream.

"Ecosystems provide humanity with important services, such as water supplies, but markets rarely value these benefits," says Ivan Bond, a senior researcher at IIED.

"Payments for watershed services are an attempt to correct this market failure in a way that brings social and environmental benefits. This will become increasingly important as demand for land and water rises and as climate change begins to alter natural systems."

But the researchers found that while there is growing enthusiasm for using payments to encourage sound watershed management and to improve rural livelihoods, there is only patchy evidence for social and environmental benefits to date.

Despite this, the researchers say that new payment schemes could make a difference if they are designed with specific watersheds and social contexts in mind and are led (and partially funded) by water users, particularly those in the private sector.

"While the early payment schemes included small-scale farmers more by accident than design, a new generation of schemes is specifically engaging poor upland communities as providers of watershed services, but it is too early to judge their success," says Maryanne Grieg-Gran, director of IIED's environmental economics programme.

The researchers examined the potential of payments in two ways. They reviewed 48 active and 45 planned schemes in 24 developing countries. They also tried to develop and test payments systems in ten watersheds in different countries in Asia, Africa, South America and the Caribbean, that would address both land use and livelihood challenges.

The findings are summarised in two briefing papers published today and on a new website - www.watershedmarkets.org - that presents profiles of active and proposed payment schemes from Africa, Asia, Latin America and the Caribbean.

Most involve rewarding upstream land practices such as organic farming, sustainable forestry or soil conservation that are thought likely to improve the quality and quantity of water available for downstream users. They vary in scale from one in Nicaragua that rewards just five families to a Chinese programme that aims to reach 15 million farmers by 2010.

The project's findings will be published in detail in two books later this year, as well as in a series of individual country reports.

The first three country reports - for Bolivia, the Caribbean and Indonesia - are already available. The Caribbean report covers Jamaica, Saint Lucia, Grenada, Trinidad and Tobago, and Saint Vincent and the Grenadines. Reports on China, India and South Africa will follow shortly.

To arrange an interview, please contact:

Mike Shanahan
Press Officer
International Institute for Environment and Development
Email: mike.shanahan@iied.org
Tel: +44 (0)20 7872 7256
Fax: +44 (0)20 7388 2826

NOTES TO EDITORS
The International Institute for Environment and Development (IIED) is an independent, non-profit research institute. Set up in 1971 and based in London, IIED provides expertise and leadership in researching and achieving sustainable development.

Case studies of active and proposed payments schemes in individual watersheds are available online for: Bolivia; Brazil; China; Colombia; Costa Rica; Ecuador; El Salvador; Guatemala; Honduras; India; Indonesia; Kenya; Mexico; Nicaragua; Pakistan; Peru; South Africa; the Philippines and Uganda. See: www.watershedmarkets.org

World Water Week is the leading annual global meeting place for capacity-building, partnership-building and follow-up on the implementation of international processes and programmes in water and development. For more information, visit www.worldwaterweek.org.

The theme of this year's event is "Progress and Prospects on Water: Striving for Sustainability in a Changing World." A record number of participants - 2,500 from some 130 countries - are expected to explore a wide variety of themes and topics at the Stockholm City Conference Centre, August 12-18, 2007.

IIED's partners in this research were: The Caribbean Natural Resources Institute (CANARI); Winrock International India; LP3ES (Institute for Social and Economic Research, Education and Information, Indonesia); CSIR Environmentek (South Africa); Fundacion Natura Bolivia; and the Centre for Humanities and Development (COHD, China).