Protecting water pays dividends

Protecting water pays dividends (IRIN)

http://www.irinnews.org/Report/97265/Protecting-water-pays-dividends

JOHANNESBURG, 17 January 2013 (IRIN) - As soaring temperatures and rapid urbanization threaten water security, countries are beginning to invest in the protection and preservation of their water sources, a new report reveals.

The efforts - such as planting trees along the shorelines of rivers to prevent soil erosion - are also creating jobs, the report, State of Watershed Payments 2012, says.

Produced by the nonprofit Forest Trends, the report is the second instalment of an inventory of initiatives around the world that are paying individuals and communities to revive or preserve water-friendly features of the landscape, including wetlands, streams and forests that can capture, filter and store freshwater.

Protecting watershed services

Countries are seeking to protect watershed services - the benefits, like clean water, obtained from healthy watershed ecosystems - by incentivizing the maintenance and improvement of watershed areas.

Of the 205 "payments for watershed services" programmes tracked around the world, more than half are in China (61) and the United States (67). Forest Trends discovered watershed investment programmes in 29 countries, but a staggering 91 percent of the payments in 2011 took place in China.

There are, however, massive initiatives underway in Africa. South Africa runs the continent's largest water conservation programme, Working for Water, which since its inception in 1995 has employed at least 20,000 people to uproot water-hogging invasive plants such as water hyacinth and eucalyptus. Studies estimate that the programme has saved South Africa more than US$50 billion in avoided costs from invasive plant impacts.

The government has been paying people employed by the programme out of its poverty relief fund. The programme, through the World Wide Fund for Nature (WWF), is now working with private companies in South Africa to offset their water consumption "footprints" and improve their water efficiency by investing in watershed services.

Around the world, there are at least 73 new investments in watershed services (IWS) programmes under development. Countries like Bulgaria, Gabon, Ghana, Kyrgyzstan, Malawi and Romania are "in line to implement their first IWS mechanism in 2012 and the coming years", the report said.

But sustainable funding is critical. China is doing well in this regard because all of its initiatives are state-funded. The report found that in many regions, particularly Africa and Latin America, new or developing programmes identified in 2008 no longer existed by 2011, largely because initial grant funds ran out.

Lessons for future programmes

"Sure, these types of mechanisms are fairly new, and practitioners are still early in the learning curve. Some amount of project failure is not unexpected," said Nathaniel Carroll, one of the authors of the Forest Trends' report, in an email to IRIN.

"But part of what we hope this report - and other products like www.watershedconnect.org - will do is share some of the elements of success and project design (such as feasibility assessment, local buy-in, long-term local financing as opposed to foundation support alone, etc.) with other projects in early stages to improve likelihood of success," he added.

Researchers Maryanne Grieg-Gran and Ina Porras, from the International Institute for Environment and Development (IIED), say they have been recording "faltering progress of payment for watershed services initiatives" in their reviews of such schemes in developing countries. One such review, All that Glitters, published in 2008, found that only three of the 17 proposed schemes reported in 2002 proceeded to a pilot stage. Of the 25 schemes reported as being pilot or mature programmes in 2002, only about half were still ongoing by the review's publication.

The schemes that survived were flexible and adapted to changing conditions, said Grieg-Gran.

For countries that cannot afford to keep these programmes alive, "engaging the private sector is one piece of the puzzle", said Carroll. "Redirecting more of the government, multilateral bank and aid dollars away from grey infrastructure [concrete, manmade infrastructure] and towards watershed payment systems and natural infrastructure is another piece of the puzzle."

Greig-Gran and Porras say governments can raise funds from the private sector for payments schemes in other, more indirect ways, directing revenue from taxes on energy and water. Costa Rica, which has been running an IWS scheme since 1997, provides a model for this approach that other countries can learn from.

The IIED researchers said more evidence is required about the impact such payments have on livelihoods and on improving water sources to strengthen the case for long-term investments in such schemes.

An evaluation by the World Bank estimates that 700 million people in 40 countries face water shortages. Today, one third of the World Bank's loan portfolio involves water projects. And though investments in watershed services are growing rapidly, they are tiny compared to the estimated $1 trillion per year that will be needed through 2025 to meet water supply and sanitation demands.