Relevance of Payments for Environmental Services (PES) for watershed management in northern Laos

Keynote address at the 2nd International WEPA Forum on Water Environmental Governance in Asia. The Water Environment Partnership in Asia (WEPA), 3-4 December 2007, in Beppu City, Oita Prefecture, JapanIn this paper we discuss the main results of a feasibility study for the implementation of Payments for Environmental Services (PES) in a small watershed of northern Laos. The aim of the work was to assess the relevance of such a scheme as a way to control both the quality and flow of a small mountain stream. We found that the PES concept, with some adaptations, may offer interesting avenues as a means to maintain water quality through an improved control of soil erosion in the upper catchment: Willingness-To-Pay (WTP) within the sampled population was approx. USD 0.3/month/household which would be sufficient to abate the negative impact of soil erosion. At the whole catchment scale, major impediments to the immediate implementation of a PES scheme were i) the lack an unequivocal relationship between environmental services, users and providers, ii) insufficient WTP to maintain water quality along the stream through waste management and iii) absence of a critical mass of buyers. A precondition of successful implementation of PES in the area is to increase the awareness of environmental issues in the concerned communities