Land Operations (through payment for environmental services)

Seeking Improved Environmental Outcomes in
Water/Land Operations (through payments for
environmental services) in Latin America
Sustainable Development Dept
Latin America and Caribbean
World Bank
1818 H Str NW
Washington DC 20433, USA
[email protected]
The opinions expressed in
this presentation are the
author’s own and do not
necessarily represent
those of the World Bank
Group.
The materials in this
presentation may be
freely reproduced with
appropriate credit to
the author and the
World Bank.
Stefano Pagiola
Economics Unit, Sustainable Development Department, Latin America and Caribbean
LEVERS OF CHANGE IN WATER RESOURCES MANAGEMENT
Water Days 2011: Innovation in Water
January 31-February 4, 2011
Impact of watershed degradation
Estação de tratamento de água Carapina
Source: CESAN
Stefano Pagiola, LCSSD, 2011 2
Watershed degradation
Rio Santa Maria de Vitória
Photo: Erick Fernandes
Stefano Pagiola, LCSSD, 2011 3
Impact of watershed degradation
Estação de tratamento de água Carapina
Source: Data from CESAN
Stefano Pagiola, LCSSD, 2011 4
Impact of watershed degradation
Estação de tratamento de água Carapina
Additional investment
Higher operating costs
Source: Data from CESAN
+ Cost of interruptions
+ Higher pumping costs
Stefano Pagiola, LCSSD, 2011 5
The problem
Deforestation
and use for
pasture
Conservation
Benefits to
land users
Costs to
downstream
populations
• Water
• Carbon
• Biodiversity
Stefano Pagiola, LCSSD, 2011 6
Past responses have largely failed




Direct government intervention
‘Demonstration’ approaches
Regulatory approaches
Short-term subsidies (in cash or in kind)
 Low adoption rates
 Adoption followed by abandonment
Stefano Pagiola, LCSSD, 2011 7
The problem
Deforestation
and use for
pasture
Conservation
Conservation
with payment
for service
Payment
Benefits to
land users
Costs to
downstream
populations
• Water
• Carbon
• Biodiversity
Important!
This logic is repeated
every year
» Need annual payments
» Need sustained financing
Stefano Pagiola, LCSSD, 2011 8
Heredia, Costa Rica
 Connections: 66,580
 100% potable water without treatment
 ESPH – Empresa de Servicios Públicos de Heredia
Stefano Pagiola, LCSSD, 2011 9
Heredia: Water supply areas
Alajuela
Heredia
San José
Source: Barrantes and Gámez, 2006
Stefano Pagiola, LCSSD, 2011 10
Heredia: Improper land use
Source: Barrantes and Gámez, 2006
Stefano Pagiola, LCSSD, 2011 11
Heredia: Areas to be protected
Source: Barrantes and Gámez, 2006
Stefano Pagiola, LCSSD, 2011 12
Heredia: Conservation charge
3.3%
Source: Barrantes and Gámez, 2006
Stefano Pagiola, LCSSD, 2011 13
Heredia: Procuencas program
Water
tariff
Other financing sources
Technical
committee
ESPH – Procuencas Fund
Procuencas
Payment for
water services
Source: Barrantes and Gámez, 2006
Stefano Pagiola, LCSSD, 2011 14
Heredia: Procuencas program
Contract
Duration
(Years)
Conservation
10
Reforestation
10
Regeneration
10
Established
plantations
10
Payment amount
(CRC/ha)
Contracts
Area
(ha)
19
806
698,941 /5 yrs
5
7
60,432 /yr*
6
27
60,432 /yr*
30
830
60,432 /yr*
(ca US$120)
(ca US$1,400)
(ca US$120)
(ca US$120)
* With annual adjustment for inflation
Source: ESPH
Stefano Pagiola, LCSSD, 2011 15
Chaina, Colombia
5 rural acueducts
• 1002 connection
• 4300 end-users
Fuente: del Pilar y otros
• 444 ha
• 2500-3600 m
• 13 families
Stefano Pagiola, LCSSD, 2011 16
Chaina: Rural aqueducts
Campesinos
Second home
owners
Total
Alto Los Migueles
141
4
145
Mosocallo
256
100
356
Río Chaina
12
167
179
Roble Alto
12
127
139
Sabana Alta
103
80
183
Total
524
478
1002
Mean income (US$/mo)
333
832
503
Aqueduct
•
48% of households use bottled water (cost ca $10/mo)
Source: del Pilar and others
Stefano Pagiola, LCSSD, 2011 17
Chaina: Arrangements
Alto Los
Migueles
Mosocallo
Río
Chaina
Roble Alto
Sabana
Alta
User charges
US$0.5/hh/mo
IAvH
CIFOR
Municipio
TA
User Association
Payments to landholders
Ca US$250/ha/yt
Fuente: del Pilar y otros
Stefano Pagiola, LCSSD, 2011 18
Chaina: Participating providers
Source: del Pilar and others
Stefano Pagiola, LCSSD, 2011 19
Towns that conserve their water supply areas
 All scales
 Quito (1.5 million)
 Cuenca (500,000)
 Pimampiro (8,000)
 Several organizational forms
 Government departments (Tacuba)
 Public utilities (Heredia, Vitoria)
 Private firms with concessions (Saltillo)
 Several situations
 Watersheds in good conditions (Heredia)
 Degraded watersheds (Vitoria)
Stefano Pagiola, LCSSD, 2011 20
PES Models
 Independent PES mechanism
 By the water utility itself (Heredia)
 Contracted to an intermediary (FONAG)
 Agreement with national PES program (Costa Rica,
Mexico)
Stefano Pagiola, LCSSD, 2011 21
PES Models
 Independent PES mechanism
 By the water utility itself (Heredia)
 Contracted to an intermediary (FONAG)
 Agreement with national PES program (Costa Rica,
Mexico)
Stefano Pagiola, LCSSD, 2011 22