Background/Objectives
Watersheds play a vital role in providing critical ecosystem services to maintain a safe and sustainable water supply, including flood control, climate regulation, water nutrient recycling, and recharge - which have significant impacts on economic, social and environmental development. However, most of the world’s watersheds are critically degraded due to rapid urbanization, deforestation, land use conversion, and unsustainable land management practices. Ensuring long-term water security requires management and protection of important watersheds to sustain the growing demand and access to resilient water supply of households, communities, enterprises, and industries. Financing is one of the challenges in watershed protection and conservation. While the importance of water resources management is fully recognized, it has only received meager government budgetary support.
Approach/Activities
The DAI-implemented USAID Safe Water activity has promoted the adoption of Payments for Ecosystem Services (PES) as a conservation financing scheme in critical watershed areas in several project sites: 1) Mount Irawan in Puerto Princesa City; 2) Buayan-Malungon River Basin (BMRB) upstream of General Santos City and 3) Bago River Watershed in Negros Occidental.
PES uses economic and environment assessments to estimate an upstream cost of ecosystem conservation activities, and a downstream value and willingness-to-pay for ecosystem services. On both a voluntary and legislative basis, stakeholders negotiate a payment scheme for downstream users who benefit from safe and sustainable water supply to compensate upstream actors for their valuable conservation work through funds raised from user tariffs, licensing fees, special funds, or other contextually driven financing mechanisms. Payments are then re-invested into activities such as nursery establishment, easement regulation, basic infrastructure development, and livelihood programming and social services to further rehabilitate and protect watersheds.
Results/Lessons Learned
This session will outline lessons learned and a roadmap for implementing PES schemes to finance watershed conservation in the Philippines, drawing upon three case studies from the USAID Safe Water activity. The presentation will outline several typologies and financing structures of PES schemes, a timeline for implementation, and key challenges and requirements for implementation. It will further highlight results from project-supported schemes and discuss opportunities for future growth. We will share data on the amount of resources mobilized through PES schemes to finance watershed conservation and the number of hectares under improved watershed management.
