Rewards for water-related ecosystem services from the Andean highlands

Water flows in Peru's Cañete basin

How do we balance user of ecosystems services - such as clean water - with preservation of the environments that provides such benefits? In the Cañete river basin on Peru's central coast, partners are working to do just that. Water in the basin comes down from the Andean highlands, recognized for its valuable biological diversity, its role in hydric regulation, and for its in supporting community livelihoods. The benefits accrue to people further downhill through hydropower, tourism, agriculture, domestic and commercial use.

Fund for Rewarding Ecosystems Services

To ensure land at the top is effectively and equitably managed by the communities that live there, Peru's Ministry for the Environment (MINAM) and the International Center for Tropical Agriculture (CIAT) have developed a Fund Rewarding Ecosystem Services. The fund combines and IFAD and GEF endowment with payments from downstream users to reward communities in the upper basin for restoration and conservation of the watershed.

Law on Rewards Mechanisms for Ecosystem Services

Looking beyond the Cañete basin, the partners supported the development of Law on Rewards Mechanisms for Ecosystem Services, which was passed by Peru's Parliament in 2014. The law established mechanism by which ecosystems service user, such as businesses and city dwellers who depend on reliable water, reward ecosystem stewards, such as upland farmers who maintain and preserve the ecosystem. The mechanism is applicable across all 53 coastal river basins in Peru.