Developing markets for watershed services

The services that watersheds provide - such as quantity and quality of water - are decreasing, yet demand for these services is increasing. Can market mechanisms help to increase these services by offering incentives for improved land use in catchment areas? Can mechanisms also bring benefits to poor people living in those catchments such that their livelihoods are enhanced? This project addresses some of these critical questions.
 

About this project

Background 

The services that watersheds provide - such as quantity and quality of water - are decreasing, yet demand for these services is increasing. Can market mechanisms help to increase these services by offering incentives for improved land use in catchment areas? Can mechanisms also bring benefits to poor people living in those catchments such that their livelihoods are enhanced? This project addresses some of these critical questions.

See also our web site: www.watershedmarkets.org, was created as part of this project to provide free online access to payments for environmental services case studies across the world.

Location 

Bolivia, China, India, Indonesia, Jamaica and Saint Lucia

Aims 

Our overall aim is to better understand the role of market mechanisms in providing  watershed services and improving livelihoods in developing countries. This aim is being achieved through three complementary actions:

  • action learning in five countries (Saint Lucia and Jamaica in the Caribbean, India, Indonesia and South Africa)
  • diagnostics in a further two countries wishing to adopt market mechanisms for watershed protection (Bolivia and China)
  • networking and development of guidance material for dissemination to other countries and institutions to improve knowledge of market mechanisms.

Impacts 

Within each of the countries involved, the project has made a major contribution to the debate on the potential and limits of payments for watershed services (PWS) to contribute to changes in land use, land management and livelihoods.

PWS have been directly facilitated by the project in three sites in Indonesia and ongoing PWS mechanisms have been strengthened at a further site in Bolivia. In Bolivia and China, the project has played an important role in influencing policy makers and plans. In the Caribbean, this initiative has helped create a highly successful regional action learning group, which has prepared the ground for a unified government council to integrate environment and natural resource issues.

An independent evaluation concluded that: ‘The project has been effective in addressing an important set of issues at a time when decisions were being made both nationally and internationally on PES/PWS type mechanisms. IIED’s work has provided a lot of the substantive input to an international debate where untested hypotheses and speculation were dominant. The project has made major contributions to understanding of PWS issues in all of its partner countries.’ (Sayer, 2005)

Partners 

Bolivia Fundacion Natura Bolivia

Caribbean Caribbean Natural Resources Institute

China Centre for Humanities and Development

India Winrock International India

Indonesia Institute for Social and Economic Research, Education and Information

South Africa Council for Scientific and Industrial Research - Environmentek

 

Contact 

Ivan Bond ivan.bond@iied.org

Funded by 

Department for International Development