Monitoring Payments for Watershed Services Schemes in Developing Countries

Payments for watershed services (PWS) are schemes that use funds from water users (including governments) as an incentive for landholders to improve their land management practices. They are increasingly seen as a viable policy alternative to watershed management issues, and a means of addressing chronic problems such as declining water flows, deteriorating water quality and flooding. In some places, local governments, donor agencies and NGOs are actively trying to upscale and replicate PWS schemes across the area. While their apparent success and progress in launching new initiatives is encouraging, there is still much to be learned from formative experiences in this field, especially with regard to monitoring and evaluation.In this paper we discuss the monitoring and evaluation criteria behind compliance or transactional monitoring, which ensures that contracts are followed, and effectiveness conditionality, which looks at how schemes manage to achieve their environmental objectives regardless of the degree of compliance. Although the two are usually linked, a high degree of compliance does not necessarily ensure that a scheme is effective. This is because a poorly designed scheme may target the wrong land managers and land that is at least risk, meaning that payments do not generate the desired hydro-ecological or conservation benefits. As the levering capacity to demand payments for better watershed management increases, so does the need to understand the dynamics of such activities and demonstrate their impacts. While the growing interest in such schemes shows that participants believe in the principle of land management, evidence of their impact is needed to determine which initiatives genuinely add value and are worth pursuing

All that Glitters: A Review of Payments for Watershed Services in Developing Countries

This report reviews the current status of payments for watershed services in developing countries. It highlights the main trends in the evolution of these schemes, synthesising the available evidence on their environmental and social impacts, and drawing lessons for the design of future initiatives. The interest in payments for watershed services (PWS) as a tool for watershed management in developing countries is growing, despite major setbacks. This review identified 50 ongoing schemes, 8 advanced proposals and 37 preliminary proposals for PWS. A previous review published by the International Institute for Environment and Development (IIED) on markets and payments for environmental services (Silver Bullet or Fools' Gold? (Landell-Mills and Porras 2002)) identified just 41 proposed and ongoing PWS schemes in developing countries, which suggests a considerable growth in interest in this approach

Mexico - National PSAH Programme

Describes a Mexican countrywide Payment for Environmental Services (PES) scheme investing earmarked water use fees into conservation of forest cover in priority areas for enhancement of hydrological resources. The PSAH programme is meant to catalyse the introduction of local schemes based on contributions from local water users that can be financially sustainable in the long term

China - Sloping Lands Conversion Programme

This report describes the national government programme through which farmers MUST set aside erosion-prone farmland within critical areas of the watershed of the two largest rivers in China: the Yangtze and Yellow river (sometimes called Huanghe River). Compensation is given in cash and in-kind. Total investment is US $4.3 million per year

Learning from 20 Years of Payments for Ecosystem Services in Costa Rica

Costa Rica's Payments for Ecosystems Services (PES) programme has become something of an icon in the world of conservation. Its innovative blend of economic and regulatory instruments - and its hitches and successes - provide a valuable source of inspiration for other countries that are looking for effective ways to conserve and regenerate ecosystems. Since 1997, nearly one million hectares of forest in Costa Rica have been part of the PES programme at one time or another, and forest cover has now returned to over 50 per cent of the country's land area, from a low of just 20 per cent in the 1980s. What lessons can be learnt from the 20 years since it was founded? Also published in Spanish, this paper is for local practitioners, international researchers and donors who are interested in the Costa Rican experience

Silver Bullet or Fools' Gold? A Global Review of Markets for Forest Environmental Services and Their Impact on the Poor

Market-oriented approaches to environmental management are increasingly common in all sectors of the economy. Forestry is no exception. As forestry sectors around the world open their doors to growing private sector participation, governments have been increasingly attracted to market-based instruments as a new set of tools for guiding private investment. Of the many instruments available to policy-makers, by far the most ambitious to date is the development of markets for forest environmental services, such as carbon sequestration, biodiversity conservation, watershed protection and landscape values. Markets are thought to offer an efficient mechanism for promoting and financing forest protection and sustainable forest management. However, policy-makers' enthusiasm for market development is not matched by practical understanding. Very little guidance is available on the mechanics of market evolution, or on the consequences of markets for human welfare. Unanswered questions abound. What drives market development? How should markets be established? What costs are involved? Will markets improve welfare? Will some stakeholders benefit more than others? How does performance vary between market structures? What is the role for governments? Of particular concern is the lack of knowledge related to what market creation means for poor people. The critical question is whether markets for forest environmental services can contribute to poverty reduction, while at the same time achieving efficient environmental protection. In short, do markets for forest environmental services offer a "silver bullet" for tackling economic,social and environmental problems in the forestry sector, or are they simply "fools' gold"?Drawing on ideas in New Institutional Economics and recent thinking on forests and poverty, this paper attempts to shed light on these questions through (1) the development of a conceptual framework for guiding research; and (2) the application of this framework in a global review of emerging markets for carbon sequestration, biodiversity conservation, watershed protection and landscape beauty. In total, 287 cases are reviewed from a range of developed and developing countries in the Americas, the Caribbean, Europe, Africa, Asia and the Pacific

Payments for environmental services: lessons from the Costa Rican PES programme

The Payments for Environmental Services (PES) Programme is one of several instruments addressing conservation issues in Costa Rica. It pays private landowners directly for the positive effect their sustainable land management has on the environment. The Programme is part of a mix of instruments, which includes stricter laws on deforestation, zoning and conservation in protected areas. The product of learning by doing, PES has provided a fertile ground for policy and technological experiments, generating considerable capacity building in the process. Fair Ideas conference, held in June 2012, provided a platform for a prominent group of expositors from different levels to share their experience on PES, from the Minister of Environment, state and NGO facilitators, national and international academics, to farmers and indigenous groups. This document compiles the key points of these presentations, and provides links to the organisations they represent