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PAYMENTS for WATERSHED SERVICES: Building on pilot experiences to mainstream a tool for sustainable conservation and development

International Meeting at the Rockefeller Foundation's Bellagio Conference Centre, Como, Italy.
March 12 - 17 2007

Organized by Fundación Natura Bolivia, IIED, Centre for International Forestry Research and EcoFund Ecuador.

Demand for water for domestic consumption and agriculture is increasing around the world. However, as human-induced pressures increase, watersheds are providing services of decreasing quality and quantity. Direct, contingent incentive mechanisms for watershed management have emerged in recent years, and there is sustained hope that such “payments for watershed services” (PWS) schemes may have the potential to significantly improve watershed services, and at the same time to protect biodiversity and reduce poverty in the upper sections of many watersheds.

While there has thus been much talk about PWS, and many discussions about what such schemes may or may not achieve, there has been little systematic analysis of the real experiences of those involved in trying to set up or run such schemes and to what extent such PWS experiences have actually been shown to contribute to environmental protection and poverty reduction. There is thus much still to do to develop understanding on:

  • Where and how PWS schemes, alone or in combination with other interventions, constitute an adequate response to watershed-related environmental problems

  • Where and how PWS schemes could most help to reduce poverty

  • When PWS is a desirable tool, how to overcome the sometimes overwhelming social and cultural opposition to direct economic incentive mechanisms for natural resource management

  • How to identify and design cost-efficient research required to ensure that PWS schemes are initiated with an appropriate scientific basis

  • How to reduce transaction costs, and

  • How to most efficiently involve government and donors in PWS schemes – and at what stage and level

A select group of 23 experts spent five days at the Rockefeller Foundation’s Bellagio Conference Center near Como, Italy drawing lessons and practical guidance from actually implemented PWS schemes—in Bolivia, China, Costa Rica, Ecuador, India, Indonesia, Mexico, South Africa, and the United States. The objective of the meeting was to develop key elements for a “how-to” guide for payments for watershed services (PWS) initiatives that will enable implementers to:

1. Efficiently take on board the lessons of global PWS experiences to date;

2. Understand the minimum requirements needed to implement a PWS scheme;

3. Undertake the minimum baseline research required for PWS sustainability; and

4. Make informed choices in designing sustainable PWS schemes producing desirable environmental and welfare-oriented outcomes.

The conclusions reached on these issues have been synthesised into a report edited by the two main organisers of the workshop, Nigel Asquith, of Fundación Natura Bolivia (, and Sven Wunder of CIFOR (