Recent and updated publications:

Fair deals for watershed services: Lessons from a multi-country action learning project

Fair deals for watershed services in South Africa

All that glitters: A review of payments for watershed services in developing countries
Ina Porras, Maryanne Grieg-Gran, Nanete Neves.

A growing international debate calls for downstream beneficiaries of wise upstream land and water use to dig into their pockets and pay. IIED stimulated the debate several years ago with a ground-breaking review of the scene. Now we have gone further - with this in-depth international review and analysis of all accessible ongoing initiatives and advanced proposals for market mechanisms for watershed services.

Negotiating watershed services
R A Hope, I Porras, M Borgoyary, M Miranda, C Agarwal, S Tiwari, J M Amezaga

In response to the disappointing results of many regulatory or public investment approaches to watershed management, payments for environmental services has emerged as a new mechanism to maintain socially optimal environmental services by compensating people for the services they provide. However, without adequate understanding of stakeholders’ willingness to modify or maintain land use or water resource decisions, market-based mechanisms may prove to be unsustainable, with uncertain social and environmental outcomes. Negotiating resource use patterns is a process that requires an understanding of the type, level and duration of incentives for stakeholders to co-operate meaningfully. In this paper, we describe a negotiation support framework that has been developed from the literature and field experiences in Costa Rica and India. The framework then serves to critically examine a case study from each country to draw empirical lessons from the process of watershed management.

Impacts of payments for watershed services in Ecuador: emerging lessons from Pimampiro and Cuenca, The
Marta Echavarria, Joseph Vogel, Montserrat Albán,Fernanda Meneses

Payments for environmental services (PES) is a topic of increasing interest in Ecuador, particularly as a way to leverage funding for environmental protection. Payments systems are emerging, but as Ecuador’s experience of PES is only recent, the implications for national and local welfare are not yet clear. Thus, the objective of this study was to provide guidance in order to ensure that policies support payments systems that are beneficial to the poor, as well as to the environment. This report focuses on two case studies - Pimampiro and Cuenca. The report recommends inter alia that further understanding of the hydrological functions provided by particular ecosystems is needed, further information is required on the value of watershed services, a tax managed by the municipalities should be levied on water for agricultural use based on consumption, and that household surveys may not be the most effective way to gather information to evaluate social impacts of a compensation mechanism.

Briefings:

Paying for watershed services: an effective tool in the developing world
Maryanne Grieg -Gran, Ina Porras

Payments for watershed services (PWS) are an increasingly popular conservation and water management tool in developing countries. Some schemes are thriving, and are pro-poor. Others are stalling or have only mixed success. Most rely on public or donor finance; and other sources of funding are unlikely to play a significant role any time soon. In part, financing PWS schemes remains a challenge because the actual evidence for their effectiveness is still scanty — it is hard to prove that they actually work to benefit both livelihoods and environments. Getting more direct and concrete data on costs and benefits will be crucial to securing the long-term future of PWS schemes.

Payments for watershed services: opportunities and realities
Ivan Bond

Many nations have found that regulatory approaches to land and water management have a limited impact. An alternative is to create incentives for sound management – under mechanisms known as payments for ecosystem services. It is a simple idea: people who look after ecosystems that benefit others should be recognised and rewarded. In the case of watersheds, downstream beneficiaries of wise upstream land and water use should compensate the stewards. To be effective, these ‘payments for watershed services’ must cover the costs of watershed management. In developing countries, they might also aid local development and reduce poverty. But new research shows that the problems in watersheds are complex and not easily solved. Payments for watershed services do not guarantee poverty reduction and cannot replace the best aspects of regulation.

Watershed services: who pays and for what?
Ina Porras, Maryanne Grieg-Gran

There is increasing interest in using payments to promote sound watershed management. Schemes range from small pilot projects involving just five families to a massive Chinese project that aims to reach 15 million farmers. The expectation is that such schemes will help to resolve problems such as declining water flows, flooding and deteriorating water quality by bringing in new funding from water users, the private sector in particular, and by providing incentives for sustainable management to those closest to natural resources. A review of active and proposed schemes in developing nations shows, however, that most schemes still depend on donor or government funding, and few are driven by water users. Meanwhile, evidence of benefits remains patchy.

Updated cases studies: