Ensuring water access in the face of climate change

Ensuring water access in the face of climate change

Actors across a watershed often have very different needs, with upstream landowners trying to exploit natural resources, such as forests and grasslands, without necessarily taking into account how their actions might impact downstream water users. Incentive-based conservation mechanisms, such as Reciprocal Watershed Agreements (RWAs) or Payment for Environmental Services (PES), attempt to align incentives across the watershed by having downstream users compensate upstream landowners for undertaking practices that improve the quality and reliability of the water supply. These include, for example, minimizing cattle grazing or limiting deforestation to certain areas, in order to avoid soil erosion and to contain the negative impacts on aquifer recharge. Our organization, the Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank Group, currently supports several watershed management initiatives across Latin America and the Caribbean. These include RWAs, which in Bolivia have been branded as “Watershared” agreements by MIF implementing partner Fundación Natura Bolivia (Natura), as well as both public and private PES agreements (in Panama and Guatemala). The aim of such pilot activities is to better understand how and when each type of agreement can be successful in increasing long-term efficiency in the use of watershed resources. While they share the same objective, Watershared and PES models differ considerably in many ways, for example: Government-led PES agreements, such as the Mexican National Program for Hydrological Environmental Services, operate under the assumption that natural ecosystems provide benefits to all members of society, and therefore schemes to conserve them should be paid through general tax revenue. Private PES agreements focus on quantifying the externalities associated with resource use and conservation, in order to...