Marcela Quintero (CIAT), Roger Loyola (MINAM), Yolanda Puemape (MINAM) Multi-stakeholder dialogue 12-13 September 2013 FAO, Rome

Rewarding water-related ecosystem services in the Canete Basin, Peru

RES initiative location

Up

per b

asin

(40

00

-58

00

Ecosystem service provision (Water yield (mm))

1111-1507

Mid

dle b

asin

(35

0 – 4

00

0

51-256

Low

er basin

(0

-35

0)

0-50

Peruvian case study, Canete River watershed – Current situation

Up

per b

asin

(40

00

-58

00

River flow use (m3/s)

0 (mostly from springs)

Mid

dle b

asin

(35

0 – 4

00

0

250, 64

Low

er basin

(0

-35

0)

Up

per b

asin

(40

00

-58

00

Water and land uses

Extensive degrading grazing, subsistence agriculture

Mid

dle b

asin

(35

0 – 4

00

0

Hydropower company Shrimp growers

Low

er basin

(0

-35

0)

Urban dwellers Water inefficient commercial agriculture Tourists (rafting)

Desired situation

Up

per b

asin

(40

00

-58

00

M

idd

le basin

(3

50

– 40

00

Lo

wer b

asin

(0-3

50

)

Transfer

part of their

benefits

Investment in

conservation

alternatives

Watershed’s

socioeconomic

asymmetries might

be balanced by this

benefit-sharing

mechanism

Rewards as a benefit-sharing mechanism

“Transfer of resources between social actors, which aims to create incentives to align individual and/or collective land use decisions with the social interest in the management of natural resources”(Muradian et al., 2010)

2010 2009

MINAM chooses Canete Basin as its pilot site for designing a PES Scheme. CIAT, CARE and WWF are invited to support this initiative. CIAT is asked to conduct respective hydrological and economic analyses .

CIAT includes Canete as the Peruvian study site in a project supported by the CPWF

CIAT conducted studies on economic valuation and hydrological priority areas as inputs for PES design

TIMELINE Key fact: The Canete PES scheme is designated as the MINAM’s offical pilot case

Key fact: The existence of an explicit interest or initiative to create a PES schemes was a precondition to select study sites for the project

January

Various meetings jointly organized between MINAM, CIAT and CARE-WWF with multiple local stakeholders to socialize and receive feedback on the PES initiative and research results.

2011

MINAM disseminated the PES initiative widely and kept supporting it even after two changes of Ministry and one change of government

Consevation InternationaI supports the legal analysis for implementing the scheme in Canete

Key fact: Legal feasibility in one of the main gaps limiting the advance towards PES negotiation

Some bottlenecks to move towards implementation

• The lack of recognition of PES schemes in the legislation: the legitimacy seems to be a bottleneck that holds local and regional authorities up in the promotion of these mechanisms.

• Obstacles to allocate potable water users contributions in a RES scheme (in Peru): There are legal bottlenecks to collect contributions via water charges payment system and transfer this to a private-public fund (ie. RES Fund). Similar occurs with public funds coming from local governments.

• Conceptual approach: The main motivation for initiating RES initiatives in some cases is to protect currently delivered ES and to reward land managers for this.

• Requires multi-sectorial coordination: Water management and environmental protection under different sectors

• There are not current watershed-level platforms to take collective decisions regarding watershed management upon which RES can be built

2011

Based on legal analysis recommendations, PES implementation actions incorporated in the action plan of the Natural Reserve (upstream area).

Actors from multiple disciplines came together to be part of a ESS Law discussion group led by MINAM. CIAT/CPWF part of the invitees

There is a final version of the Law to be subject of public consultation and congress approval

2012

TIMELINE (2)

Key fact: Law discussion considered lessons learned from practice including Canete regarding the conceptual approach, institutional bottle necks, legal constraints, etc.

Key fact: CIAT is invited by IFAD and MINAM to be part of the project formulation mission. Technical-science-based project results are taken into account in this.

IFAD approached MINAM with the purpose of supporting the creation of a Trust Fund to start up the operation of the PES scheme in Canete. A GEF-IFAD project was formulated (pending for approval)

Scheme for Rewarding for Water-related Ecosystem Services

Farmers in hydrological priority areas of

the highlands of rivers Canete (and

Jequetepeque)

Willing to co-invest in :

-Rehabilitation of wetlands

-Conservation of andean relict forest

-Improving farming practices in slopping

lands

Farmers receive training and capital to

invest in the new practices

$

ES beneficiaries (urban water users,

hydropower company, tourists,

irrigated agriculture

$

Watershed committee

Overcoming bottlenecks for RES implementation

Proposed law

• Offical recognition of RES, eventhough are voluntary

• Definition of RES: Rewards and incentives

• Avoid perverse incentives

• Enable transfer of urban water users contributions into RES funds

• Highlights the importance of articulating PES with existing land and water use/management plans

Remaining gaps

• How to become voluntary contributions in a legally binding to ensure continuity

• Management design that guarantees independency and transparency

Canete institutional arrangement for implementation

• Creation of ad-hoc watershed committee for PES governance possible transition towards watershed councils

• National organization that currently manages conservation project will manage the PES Fund

• High replicability potential

Lessons learned

Private sector participation: From the ES beneficiaries’ side: Relatively easier than having public support, as long as there is willingness of private sector to participate. From ES providers’ side: There are two aspects that would need to be refined prior to actual rewards disbursement.

– Details about land management alternatives to guarantee effectiveness

– Due to the lack of land titles in some areas, it is needed a

field recognition of who is actually having control on land and under what type of land tenure. Based on this contractual agreements would need to be shaped.