Presentation made in the Multi-stakeholder Dialogue in PSD/PES 12-13 September 2013 FAO, Rome Marcela Quintero (CIAT), Roger Loyola (MINAM), Yolanda Puemape (MINAM)

1. Rewarding water-related ecosystem services in the Canete
Basin, Peru
Marcela Quintero (CIAT), Roger Loyola (MINAM), Yolanda Puemape (MINAM)
Multi-stakeholder dialogue 12-13 September 2013 FAO, Rome

2. RES initiative location

3. Peruvian case study, Canete River watershed – Current situation
Upper basin
(4000-5800
(4000-5800
(4000-5800
Ecosystemanduse (m3/s)
Water service provision
River flow land uses
(Water yield (mm))
Extensive degrading 0
grazing, subsistence
agriculture(mostly from springs)
1111-1507
Middle basin
(350 – 4000
(350 – 4000
(350 – 4000
Hydropower company
51-256
Shrimp growers
250, 64
Lower basin
(0-350)
(0-350)
(0-350)
Urban dwellers 0-50
Water inefficient commercial agriculture
Tourists (rafting)

4. Desired situation
Upper basin
(4000-5800
Investment in
conservation
alternatives
Middle basin
(350 – 4000
Lower basin
(0-350)
Watershed’s
socioeconomic
asymmetries might
be balanced by this
benefit-sharing
mechanism
Transfer
part of their
benefits
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)

5. Key fact: The Canete PES scheme is
designated as the MINAM’s offical pilot
case
TIMELINE
Key fact: Legal feasibility
in one of the main gaps
limiting the advance
towards PES negotiation
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 .
2009
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.
January
2011
2010
CIAT includes Canete as the
Peruvian study site in a project
supported by the CPWF
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
Consevation InternationaI
supports the legal analysis
for implementing the
scheme in Canete
CIAT conducted studies on
economic valuation and
hydrological priority areas as
inputs for PES design
MINAM disseminated the PES
initiative widely and kept
supporting it even after two
changes of Ministry and one
change of government

6. 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

7. TIMELINE (2)
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 GEFIFAD project was formulated
(pending for approval)
Based on legal analysis
recommendations, PES
implementation actions
incorporated in the action
plan of the Natural Reserve
(upstream area).
2011
Actors from multiple disciplines
came together to be part of a
ESS Law discussion group led by
MINAM. CIAT/CPWF part of the
invitees
Key fact: CIAT is
invited by IFAD and
MINAM to be part of
the project
formulation mission.
Technical-sciencebased project results
are taken into
account in this.
2012
There is a final version of the
Law to be subject of public
consultation and congress
approval
Key fact: Law discussion considered
lessons learned from practice
including Canete regarding the
conceptual approach, institutional
bottle necks, legal constraints, etc.

8. Scheme for Rewarding for Waterrelated Ecosystem Services
Watershed
committee
$
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

9. Overcoming bottlenecks for RES implementation
Remaining gaps
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
•
•
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

10. 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.