This manual is an effort by TNC, FEMSA Foundation, IDB, and GEF to compile, analyze and synthesize its own experience with Water Funds, together with that of the projects already in existence and under creation, in order to provide operational guidelines to people and organizations interested in establishing a water fund or similar mechanism. Each location has different ecological, social, economic, legal and institutional features and, therefore, each water fund will have its own characteristics, phases and projections. This manual presents general guidelines and logical steps that must be followed to boost the opportunities and benefits of a water fund and to minimize possible obstacles for its creation. It is not intended to be an in-depth look at every aspect of water funds. Although TNC participates in several other initiatives and similar approaches to watershed management, such as the water producers program in Brazil, this document will not address those initiatives and will only focus on the water funds schemes as they have been developed in the Andean region.
The creation of tradable credits for the development or preservation of ecosystem services has emerged as a method to provide payments for land and water stewardship. One obstacle to the emergence of markets for these credits is a lack of financing for projects seeking to develop ecosystem services and their credits. The research effort described here seeks to develop innovative financial mechanisms and approaches to meet this need.
The Conservation Finance Guide presents a host of potential financing opportunities for nature conservation in general, with a special focus on protected area management. Many of these finance mechanisms rely on a "market-based" approach, valuing and marketing the goods and services that a protected area generates in support of local livelihoods and the broader economy. Such mechanisms are an innovative departure for protected areas used to relying on short-term, grant funding. They should be considered as complementary funding sources to government appropriations, not a substitute.
Aging water infrastructure, increasing demand, continued land use change, and increasingly extreme weather events are driving the costs of water management higher in the United States. Investing in integrated water management strategies that combine engineered solutions with "natural infrastructure" can reduce costs, enhance services, and provide a suite of co-benefits for communities and the environment. This publication offers comprehensive guidance on the economics, science, partnerships, and finance mechanisms underlying successful efforts to secure the water-related functions of networks of forests and other ecosystems.
The report represents an attempt at cataloguing the use of PWS across the world connected to the amount of money being transacted. The emphasis here is on the word “attempt.” By its own admission this catalogue is not exhaustive. By means of online searches, interviews, questionnaires, emails, and phone calls, the Ecosystem Marketplace (EM) team tracked watershed payments mechanisms and how they're being used to protect and improve water quality and flows.
This report offers a preliminary economic analysis of water quality trading opportunities in the Great Miami River watershed, completed for the Miami Conservancy District. The analysis seeks to answer these critical questions: 1) Is there an adequate supply of agricultural nonpoint source reductions of phosphorus and nitrogen to meet point source demand; and 2) Are the cost differentials between point source upgrades and trading sufficient to support a trading program?
Last year, governments and companies invested $12.3 billion (B) in initiatives implementing nature-based solutions to sustain the world’s clean water supplies. According to a new report from Forest Trends’ Ecosystem Marketplace, this funding – which supports healthy watersheds that naturally filter water, absorb storm surge, and perform other critical functions – flowed to more than seven million households and restored and protected a total of 365 million hectares (ha) of land, an area larger than India. Up from $8.2B in investment tracked in 2011, the researchers say the sector’s continued growth and near-doubling of the hundreds of operational programs reflects governments’ desire to secure water quality and availability with affordable strategies that can complement or replace industrial infrastructure.
This paper looks at the scientific and physical hydrologic basis that payment schemes for watershed ecosystem services attempt to improve. The authors contend that payments for watershed ecosystem services are frequently based on generalizations that may not be true in the watersheds where the program operates. Through tackling common myths about watershed management and looking at the need for monitoring and information collection, good science and institutional arrangements are encouraged to assure the intended results are produced from payment programs. The report looks at how water modeling and water balances should be used to analyze watersheds for expected outcomes from changing land use practices.
This report benchmarks companies taking a landscape-scale approach to water risk – looking beyond direct operations to the larger watershed context. Business leaders from Coca-Cola to SABMiller to Sony are experimenting with natural infrastructure investments that address many of the operational risks at the top of their lists – including supply disruptions and emerging regulations – while saving money, increasing resilience to climate and natural disaster shocks, and improving relations with local communities. These efforts are known as investments in watershed services (“IWS”). This executive summary is developed specifically for a business audience, building upon data and analysis first presented in a more comprehensive report from Forest Trends’ Ecosystem Marketplace on the topic of watershed investments – Charting New Waters: State of Watershed Payments 2012. In Charting New Waters, we track the size, scope, and outlook for investments in watershed services and in the ecological infrastructure from which they flow.
This document chronicles the development of the Counting on the Environment project in the Willamette Basin - initial ideas and technical foundation through 2007. Many background and technical documents are linked within.
This guide offers an introduction to watershed payment mechanisms, and detailed guidance for Project Design and implementation. Topics covered include evaluating mechanisms for best fit, mobilizing financial resources, engaging stakeholders and institutions, managing negotiations, and operational considerations like developing a legal framework and ensuring compliance.
The Guide to Environmental Markets for Farmers and Ranchers, produced by the American Farmland Trust (AFT), provides an overview of available market opportunities for environmental credits and services, how farmers and ranchers can get involved in them, and ways to encourage their continued growth. The guide emphasizes forms of market participation that complement, rather than replace, agriculture, and how to carry out a realistic assessment of options. The AFT developed the guide specifically for farmers and ranches in Washington State, but much of its content should be useful at a wider scale.
This paper considers why point-nonpoint trading programs in the US have historically posted low trading volumes. It identifies a number of impediments in program and incentive design and stakeholder perspectives and suggests ways to address these problems.
In 2013, 530 institutional investors representing approximately US$57 trillion in assets and a number of major purchasing organizations called for greater transparency on corporate water issues from 1,036 companies. 593 companies from Antofagasta to Hewlett-Packard and L’Oreal to Unilever responded; a 59% increase since last year. This analysis and report is presented to provide those investors and purchasers with insight on the adequacy of the corporate response to water issues. In this report, CDP and Deloitte Consulting LLP (Deloitte) present results of the analysis based on the water disclosures of 184 Global 500 corporations that participated this year; a 60% response rate. Together, these corporations account for approximately 11 billion megaliters of water withdrawals per year, enough to provide 50 liters of water per day to the world’s current population of approximately 7 billion people for nearly 82 years. Over 90% of these companies now have water management plans in place, and companies report more than 1,300 actions, targets and goals to reduce their impact on water resources, and thus their exposure to water risks.
Watersheds across the United States have used different forms of water quality trading over the last decades as a flexible tool for meeting water quality goals. The successes, failures, and valuable lessons learned gathered by pioneering groups can be instrumental in helping new trading programs lay the groundwork for success. Those lessons have been gathered in In It Together: A How-To Reference for Building Point-Nonpoint Water Quality Trading Programs. This report, prepared for the U.S. Department of Agriculture (USDA) Office of Environmental Markets, incorporates these lessons, with existing resources from USDA, the U.S. Environmental Protection Agency, and others, into this how-to reference (as part of USDA's ongoing efforts to advance market-based solutions as important tools for landowners implementing conservation practices). Part II is a design reference for building and operating water quality trading programs that outlines how to move through each phase of trading program development and cites the milestones that will help program designers plan throughout the process.
Regulators and performance standards are increasingly require environmental & social impact assessments to consider ecosystem services, but to date there is a dearth of guidance on how to do so. This working paper offers a framework and step-by-step guidance for practitioners conducting an "Ecosystem Services Review for Impact Assessment." The paper includes an introduction to the framework and the scoping stage of impact assessment; a second working paper, "Ecosystem Services Review for Impact Assessment: Guide to Impact Analysis and Mitigation" covers later stages of assessment.
Available on-line only, this e-document is a tutorial provided by WWF's Center for Conservation Finance to assist any individual with an interest in finding ways to help sustainably finance conservation. Conservation finance, unlike grants or donor based philanthropy, relies on financial techniques at the macro and micro level, to generate revenue for establishing, operating, and protecting the natural world. Various conservation finance publications, descriptions and examples of actual applications of conservation finance techniques with links to relevant databases and websites are provided within this e-document.
Scores of projects across both the developed and developing worlds are using environmental finance to preserve endangered species, improve water quality, and preserve wetlands — all based on the premise that nature’s living ecosystems deliver valuable services that make them worth more alive than dead. Now it’s time to expand this reasoning to the ocean, where fish are vanishing, coasts are eroding, and algae are having a field day.
Carpe Diem West Academy maintains a compendium of water and climate-related tools and training materials, organized according to a eight-state 'roadmap' for decision-making under climate uncertainty. Resources are screened and evaluated using a number of criteria, and are presented with a summary and user reviews. Carpe Diem West Academy also offers a 'Tool of the Month' feature and regular webinars exploring tools and their applicability in further depth.
Watersheds across the United States have used different forms of water quality trading over the last decades as a flexible tool for meeting water quality goals. The successes, failures, and valuable lessons learned gathered by pioneering groups can be instrumental in helping new trading programs lay the groundwork for success. Those lessons have been gathered in In It Together: A How-To Reference for Building Point-Nonpoint Water Quality Trading Programs. This report, prepared for the U.S. Department of Agriculture (USDA) Office of Environmental Markets, incorporates these lessons, with existing resources from USDA, the U.S. Environmental Protection Agency, and others, into this how-to reference (as part of USDA's ongoing efforts to advance market-based solutions as important tools for landowners implementing conservation practices). Part 1 presents an overview and current status of point-nonpoint water quality trading programs and serves as a primer. It summarizes existing water quality trading programs for newcomers to the field.
These guidelines specify what should be included in an ecological assessment of a wetland site before restoration. The guidelines are organized as a detailed outline of an application, including assessment of the site and the mitigation approach. Although this document is now a more than a decade old, it may still be quite useful.
The number of initiatives that protect and restore forests, wetlands, and other water-rich ecosystems has nearly doubled in just four years as governments urgently seek sustainable alternatives to costly industrial infrastructure, according to a new report from Forest Trends’ Ecosystem Marketplace. “Whether you need to save water-starved China from economic ruin or protect drinking water for New York City, investing in natural resources is emerging as the most cost-efficient and effective way to secure clean water and recharge our dangerously depleted streams and aquifers,” said Michael Jenkins, Forest Trends President and CEO. “80 percent of the world is now facing significant threats to water security. We are witnessing the early stages of a global response that could transform the way we value and manage the world’s watersheds.” The report, State of Watershed Payments 2012, is the second installment of the most comprehensive inventory to date of initiatives around the world that are paying individuals and communities to revive or preserve water-friendly features of the landscape. Such features include wetlands, streams, and forests that can capture, filter, and store freshwater.
This report examines fourteen case studies where cities around the United States have adopted green infrastructure solutions to reduce stormwater pollution. These cities have found that a green infrastructure approach - such as green roofs, permeable pavement, rain gardens, and street trees - is often more cost-effective than traditional stormwater management infrastructure like storage systems and pipes. It also provides ancillary benefits including flood resilience and even increased water supplies. offers key policy and technical recommendations for cities, states, and at the federal level to promote and optimize green infrastructure investments.
This paper looks at existing tools in the Clean Water Act for protecting in-stream flows, and thereby breaking down the regulatory wall between water quality and water quantity governance. The authors focus on five southwestern states - CO, NV, UT, AZ, and NM - and four possibly policy tools: water quality standards, 401 water quality certification, 303(d) impaired waters listing and TMDL development, and Category 4C waters listing.
This booklet has been created as an initial resource for public sector officials interested in fostering an environment in which PES transactions can occur. While PES legal and policy readiness is likely to look very different from one country to another—depending on legal frameworks, as well as historical and current circumstances and pressures—understanding policy options for getting ready for PES transactions is an important first step towards assessing readiness within a specific national context.
This tool allow users to make hydrological and financial comparisons between conventional stormwater management strategies and green interventions. Users can input site statistics, and a range of green infrastructure interventions to see outcomes in both hydrological (discharge and peak discharge by lot and site levels, total detention size requirements, and average annual discharge) and financial (life cycle costs, first-year site construction and maintenance costs, and benefits over a 100-year life cycle, by lot and in total) terms.
This report introduces readers to the water fund model and offers a framework to assess their effectiveness.
Water Funds are governance and financial mechanisms organized around the central principle of watershed conservation. This document is intended to assist people working on Water Funds to understand their information needs and become familiar with the strengths and weaknesses of various monitoring approaches. This primer is not intended to make people monitoring experts, but rather to help them become familiar with and conversant in the major issues so they can communicate effectively with experts to design a scientifically defensible monitoring program. The document highlights the critical information needs common to Water Fund projects and summarizes issues and steps to address in developing a Water Fund monitoring program. It explains key concepts and challenges; suggests monitoring parameters and an array of sampling designs to consider as a starting-point; and provides suggestions for further reading, links to helpful resources, and an annotated bibliography of studies on the impacts that result from activities commonly implemented in Water Fund projects. While this document highlights the importance of setting clear goals and objectives, which will guide a Water Fund and its activities and define what information should be tracked, it does not provide detailed information about how to develop goals and objectives. For more information on this process, see the Conservancy’s primer on Water Fund creation and design, Water Funds: Conserving green infrastructure: A guide for design, creation and operation.
"Forests for Water: Exploring Payments for Watershed Services in the U.S. South" offers an introduction to payments for watershed services and other incentive-based mechanisms, and how these mechanisms might work to conserve forested watersheds in the Southern United States. The brief, which was produced by the World Resources Institute, covers possible participants in watershed services transactions and steps for landowners to take in valuing and marketing these services.
This report conveys findings from a survey of payments for watershed services (PWS)-type programs across the United States, analysis of those mechanisms, including commonalities and challenges, and implications for scaling up the PWS model. The report focuses on innovative programs; better-known mechanisms for watershed payments like the Conservation Reserve Program are not included.
Policymakers, natural resource managers, researchers, and expert practitioners from 13 Chinese provinces and 15 countries recently convened at Katoomba XVIII: Forests, Water, and People in Beijing to advance investments in natural infrastructure for water security in an urbanizing world. The setting reflected China’s global leadership in eco-compensation as well as regional opportunities to improve the efficiency and effectiveness of investments in watershed services. Over the four-day meeting, participants presented and discussed innovative approaches from China and around the world for addressing water risk through investments in natural infrastructure. Sessions focused on innovative financing for natural infrastructure, new approaches by governments and business, managing the water-energy-food-nexus, and urban partnerships for watershed protection. Participants also delved into ongoing investments in Beijing’s watershed, focusing on efforts led by the neighboring Beijing Municipality and Hebei Province. Drawing on insights and observations during the meeting as well as experience from around the world, meeting participants developed recommendations, presented in these documents.
The use of markets and market-based mechanisms to conserve and pay for ecosystem services is a growing global trend that is gaining a solid foothold not just in the carbon markets, but also biodiversity and water markets. Furthermore, these payments for ecosystem services (PES) are a practice that is no longer solely important to environmentalists but has become of essential interest to small local communities, government regulators, businesses, and financiers all over the world. PES encompass innovative private deals, financing schemes, and government programs that have been structured around the premise that natural ecosystems provide valuable services, and that if marketed correctly, these services might help watershed and biodiversity conservation pay for itself and generate income for those willing to participate.This booklet is meant to serve as context and provide background for the Katoomba conference: "Avoiding Deforestation in the Amazon through PES Markets" held in Mato Grosso, Brazil in April 2009.
This toolkit offers a comprehensive overview of designing a water quality trading program driven by National Pollutant Discharge Elimination System (NPDES) permits, with a focus on guiding permitting authorities in incorporating provisions for trading in permits.
At the inaugural meeting of the Latin America Conservation Council in November 2011, its members committed to a multi-year goal of using nature to secure clean water supplies for 25 of Latin America’s most at-risk cities. One of the five strategies chosen to reach this goal was to develop and show business cases that can clearly demonstrate the social and economic benefits of investing in nature, or as we also say, green infrastructure, which provides essential services for the development and well-being of human societies. This publication was developed under this context. Based on the information generated by the Latin America Water Funds Partnership, an initiative of The Nature Conservancy, FEMSA Foundation, Inter-American Development Bank and Global Environmental Facility, we gathered results related to the development and implementation of Water Funds in several Latin American cities to provide solid examples of why investing in nature benefitsboth people and economies.
This is a presentation to a CARE/WWF workshop on Pro-Poor Payments for Environmental Services; Bogor, Indonesia.
The main objective of this paper is to provide recommendations on the social impact assessment (SIA) of investments for watershed services (IWS) projects or programs. The paper draws on an extensive literature on the theory and practice of SIA, on the authors’ experiences of applying SIA in other natural resource contexts, and on discussions from a workshop with IWS program practitioners. It can be regarded as an introductory primer on SIA for IWS practitioners.
In South Africa, Working for Water provides one of the longest-standing and most successful examples of payments for ecosystem services (PES). Initiated in 1995 just one year after the end of apartheid, the program organizes poor South Africans in local communities to eradicate invasive alien plants (IAPs) through country's Department of Water Affairs and Forestry.
This paper presents various approaches to watershed payments around the world. It also offers guidance on designing payment mechanisms and key considerations for PWS advocates.
This is a case study reporting on a payments for watershed services (PWS) arrangement in Pimampiro, Ecuador to maintain forest cover and ensure clean water supplies.
These articles were commissioned by Ecosystem Marketplace to serve as context and provide background for the MARES Katoomba Meeting, held in Palo Alto, California, on February 9–10, 2010.
AQUASTAT is FAO's global information system on water and agriculture developed by the Land and Water Development Division of FAO. The objective of AQUASTAT is to provide users with comprehensive information on the state of agricultural water management across the world, with emphasis on developing countries and countries in transition. The information system consists of country profiles, regional reviews, water resources by country, links and online documents on water and agriculture.
The New York City watershed protection program may be the most well known example of economics driving a decision to invest in water based ecosystem services. In this narrative Albert Appleton, former Commissioner of the New York City Department of Environmental Protection and Director of the New York City Water and Sewer system, discusses the social and political process of developing this program. He gives insights in to the difficulty of breaking with status quo policy approaches and the benefits for following instinct allowing for innovation and cooperation that resulted in saving New York City billions of dollars and protecting their environment.
This paper aims to help demystify PES for non-economists, starting with a simple and coherent definition of the term. It then provides practical 'how-to' hints for PES design. It considers the likely niche for PES in the portfolio of conservation approaches. It concludes that service users will continue to drive PES, but their willingness to pay will only rise if schemes can demonstrate clear additionality vis-à-vis carefully established baselines, if trust-building processes with service providers are sustained, and PES recipients' livelihood dynamics is better understood. PES best suits intermediate and/or projected threat scenarios, often in marginal lands with moderate conservation opportunity costs. People facing credible but medium-sized environmental degradation are more likely to become PES recipients than those living in relative harmony with Nature. The choice between PES cash and in-kind payments is highly context-dependent. Poor PES recipients are likely to gain from participation, though their access might be constrained and non-participating landless poor could lose out. PES is a highly promising conservation approach that can benefit buyers, sellers and improve the resource base, but it is unlikely to completely outstrip other conservation instruments.
This document, produced by the Interagency Working Group, is intended to guide non-technical readers in designing, constructing, and maintaining a wetland project. It includes appendices with additional resources including relevant contacts, documents, and additional information specific to region and wetland type.
Resources that have not been voted on are not included in this list