Under what conditions can Payments for Environmental Services deliver sustainable improvements in welfare? Learning from a Randomized Control Trial

Across Latin America, the watersheds that provide users with clean water often have to support additional and sometimes conflicting functions, such as agriculture and forestry. Existing regulatory frameworks have often proved unable to reconcile these conflicting needs. 

Upper watershed farmers often have no economic alternative other than to deforest their land for agriculture, so upstream "water factories" end up destroyed, often for a pittance. This subsistence approach to agriculture is unproductive and very susceptible to climate change, and downstream municipal water sources can also end up contaminated because cows enter streambeds to drink, forage, urinate and defecate. All of this can lead to children missing school with diarrhoea, blocked pipes and dams, and waterholes that support farmers drying up.

In 2003 in Los Negros, Bolivia, Fundación Natura Bolivia (Natura) established a payments for environmental services (PES) scheme to protect upstream forests and maintain quality downstream water supplies. From humble beginnings in 2003, when six farmers agreed to protect 465 ha, more than 30,000 downstream users are now compensating 1,140 upstream families for protecting 35,000 ha of forest.

This project interrogated the scheme to identify conditions under which such small scale payments for ecosystem services (PES) schemes could deliver sustainable improvements in welfare whilst also developing a series of evaluation tools that could be applied globally. 

Key scientific findings of the project comprised:

  1. Water quantity: A forested hectare in Bolivia’s Santa Cruz valley helps recover 1500 m3 of water to the aquifer per year vs. a similar hectare that has been deforested.
  2. Water quality: Forest conservation and cattle exclusion significantly reduce the levels of fecal coliforms in streams, but such activities must be undertaken over large areas if they are to improve human health.
  3. Socioeconomics: People who sign up to join the studied incentive based conservation scheme have higher levels of trust, and are more involved in their communities then people who did not sign up. There was no difference in perceptions about the environment between the two groups.
  4. Randomized Control Trial methodologies can be adapted to evaluate conservation interventions, but their use is complicated by the fact that most such interventions have multiple objectives thus making data analysis complex.

Further information:

 

Dr Asquith led previous research on ecosystem services provision in Bolivia in NE/I00436X/1.

Organisation:
Country: Bolivia
Lead Principal Investigator
Organisation: Bolivian Natura Foundation
Country: Bolivia
Co Investigator
Organisation: Tufts University
Country: United States
Co Investigator
Organisation: National University of Colombia
Country: Colombia
Researcher Co Investigator
Organisation: Bolivian Natura Foundation
Country: Bolivia
Researcher
Organisation: Bolivian Natura Foundation
Country: Bolivia
Researcher
Organisation: Bolivian Natura Foundation
Country: Bolivia