CIAT’s current research in water-related ecosystem services and

benefit-sharing mechanisms

Contribution to the CRP5’s Basins SRP

Marcela QuinteroAddis Abeba; May 28th, 2012

Contributing to these SRP entry points:

• Introducing and consistently follow the principles of benefit-sharing

• Understand and consider resource variability in basin management

Ecosystem services–oriented Benefits Sharing Mechanisms (BSM) in the Andes

(CPWF 2nd Phase)A mechanism negotiated in a basin between the

actors that benefits from ES and those whose decisions determine the provision of ES, in

order to share among them the benefits and costs associated to the delivery of ES

Current research sites (CPWF 2nd phase)

Designing BSM

Stakeholder engagement

Policies

Institutional arrangements

Technologies and information

BSMImportance of partners for research implementation and BSM implementation

Research for negotiating evidence-based benefit sharing mechanisms

1. What Water-related Ecosystem Service and where is it provided?*

2. Who benefits from it and what is the magnitude of the benefit?*

3. What land and water management should be promoted to maintain/improve ecosystem services at the basin scale?*

4. What are the opportunity costs of these improvements?

5. What will be the effect of a ES-based BSM on poverty and equity?

What Water-related Ecosystem Service and where is it provided?

• Total water yield• Improvement/

maintenance of hydrological regime (base flows and peak flows)

• Retention of sediments and nutrients

All of these are environmental externalitiesRequire the understanding of upstream-downstream

linkages

Other CIAT’s research sites in the Andes

Upper basin(4000-5800

Ecosystem service provision (Water yield (mm))

1111-1507

Middle basin (350 – 4000

51-256

Lower basin (0-350)

0-50

Peruvian case study, Canete River watershed – Current situation

Upper basin(4000-5800

River flow use (m3/s)

0 (mostly from springs)

Middle basin (350 – 4000

250, 64

Lower basin (0-350)

Upper basin(4000-5800

Water and land uses

Extensive degrading grazing, subsistence agriculture

Middle basin (350 – 4000

Hydropower companyShrimp growers

Lower basin (0-350)

Urban dwellersIrrigated agricultureTourists (rafting)

Transfer part of their benefits

What Water-related Ecosystem Service and where it is provided?Hydrological modeling

• Land use and cover map

• Local climatic information

• Streamflow measurements

• Soil map units and characteristics

• Digital elevation models

Who benefits from WES and what is the magnitude of the benefit?

WES beneficiary WES economic value Current water charge Irrigated agriculture (US$ m3) 0.0014 (0,46 M) 0.003 Tourists (US$/.) 15.75 (0,76 M) n.a.Urban users

Residential (US$ mon-1) 0.37 (0,063M) 3.1 - 15 Commercial (US$ mon-1) 0.64 (0,017M) 6.3 - 44.4Hydropower company (US$ per additional m3) 0.055

Hydropower company (US$ / per additional 5M m3)* 10 M

* Due to improvements in water flow regulation (base flows)

Economic valuation of WES for different actors in the Canete River Basin (Peru)

These values are reference values to be used for anticipated negotiation processes.

What land and water management should be promoted to maintain/improve ecosystem services at the basin scale?

Impacts of conservation agriculture in potato-pasture systems

At the plot and basin scale

Conservation agriculture impacts

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T re a tme n t 1 T re a tme n t 2

1 2

H o rizo n

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% v

olum

etri

c w

ater

Conservation agriculture

Traditional agriculture

% V

olum

etric

Wat

erMore water stored, restoring the buffer

role of paramo

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0.05

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M (

g/g

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RT-Horizon 1 CT-Horizon 1 RT-Horizon 2 CT-Horizon 2

Conservation agriculture

Traditional agriculture

Accu

mul

ated

Org

anic

M

atter

(g/g

)

Better soil porosity, filtration, increased

carbon storage

(Quintero, 2010)

What are the opportunity costs for improving WES delivery?

14

S

Annual net income:US$ 2,183/ha

Annual net income:US$ 1,870/ha

Conservation agriculture and paramo restoration supported by revolving fund

Farmers‘ insufficient gain and risk aversion: only 11% converted

Revolving fund credit: +180 farmers /year

Potato cropping, grazing pressure, degradation of paramo

(Vidal & Quintero, 2010)

What are the opportunity costs for improving WES delivery?

What would be the effects of Basin BSM on poverty and equity?

Changes in Gini Coefficient for per capita expenditures (2007-2009)

How a transfer of resources by means of a BSM may improve equity conditions?

(Celis y Escobar, 2012)

Contributing to these SRP entry points:

• Introducing and consistently follow the principles of benefit-sharing

• Understand and consider resource variability in basin management

CLIMATE CHANGE

ECOSYSTEMS

ECOSYSTEM SERVICES

LIVELIHOODSMIT

IGAT

ION

ADAPTATION-+-/+

Streamflow regulation

Biodiversity conservation

Carbon sequestration

Food production

Linkage between climate change predictions and water variability and yield

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Caudal Mensual Simulado Rio Axtla Vs. Registros Estación 26243

Simulado Observado

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Caudal Mensual Simulado Xilitla Vs. Registros Estación 26243

Simulado Esc. A2 al 2050Esc. A2 al 2020

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Impacto del CC en produccion de agua - Rio Axtla

Linea Base (1990-2008)

Escenario CC al 2020

Escenario CC al 2050

Meses

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uccio

n Ag

ua (m

m)

Our key next usersProviding policymakers with compelling

evidence

• Environmental authorities (regional and national) – Ministry of Environment (Peru); CORPOCALDAS,

CAR, CORPOGUAVIO (Colombia)

• Authorities advisors – GIZ (Ecuador, Mexico); Patrimonio Natural

(Colombia)

Our research partners

• Local NGOs with field and extension experience (FUNDESOT, PANGEA)

• Regional research organizations (RIMISP, CONDESAN)

• National and International Universities (UNAL, UNALM)

Antecedents

• CPWF 1st phase project (PN22)– In four Andean watersheds– Provided the basis to test methodological

approaches and tools for informing Payment for Watershed Services design

– Permitted reflection about PES concept– Part of the formulation of the Andes BDC (2nd

phase) about BSM (beyond “pure” PES schemes)

Research Highlights: Putting the pieces together for designing a PES

Where payments should be targeted to?Identification of service providing areas using hydrological modeling

What should be the payments amount to be made by ES beneficiaries?Estimation of economic value of watershed services for different ES users:

How payments should be used?Ex-ante assessment of likely eco-efficient land use alternatives; ecosystem conservation measures and social development projects.