State of Watershed Payments: An Emerging Marketplace
Tracy Stanton on August 18, 2010
We are pleased to draw your attention to our newest publication, "State of Watershed Payments: An Emerging Marketplace," released at the Katoomba Group meeting in Hanoi, Vietnam in late June.The report is part of a series of reports, produced by the Ecosystem Marketplace, that quantify the investments in Payments for Ecosystem Services (PES) and Payments for Watershed Services (PWS) around the world.
The effort represents the first to quantify the actual dollars exchanged through two key watershed conservation tools: payment for watershed services and water quality trading (WQT). Information was collected through an intensive research effort including: interviews and personal communication with over 60 project developers around the world; outreach to key regulators; online research; and research of published articles and reports.
A sample of the research findings:
In 2008, a total of 288 PWS programs were identified (216 PWS and 72 WQT). Far fewer programs recorded transactions, numbering about 127, yielding an estimated US$9.3 billion dollars in watershed protection activities.
Over the entire span of recorded activity (roughly 1985 - 2008), total transaction value is estimated at just over US $50 billion, impacting some 3.24 billion hectares. This total is sure to have been larger had project developers provide more complete and comprehensive details about project-level transactions.
Between 2000 to 2008 in China alone, total programs grew from 8 to 47 and transactions went from just over US $1 billion to US $7.8 billion. Latin America boasts the most programs totaling 101. Between 2000 to 2008 total active programs in the region grew from 7 to 36 and transactions grew from US $6.2 million to roughly $US 31 million.
In 2008, WQT yielded just under US$ 11 million compared to the US$ 9.246 billion for all other PWS. The fact that water quality trading registers transactions at just under US$ 11 million dollars in 2008 is attributable to two key factors: 1) trading schemes flourish when driven by effective water quality standards. In the absence of those standards, trading programs will likely flounder and fall short of performance requirements and market expectations; and 2) transaction data from trading programs is not routinely or transparently reported, making the task of tallying transactions, such as for this report, a monumental job.
Governments are the most significant player in terms of supporting the current activity in the protection of watershed services.
The full report and Executive Summary are available via Ecosystem Marketplace or via the direct link to the landing page of the report: