1. CIAT’s current research in water- related ecosystem services and benefit-sharing mechanisms Contribution to the CRP5’s Basins SRP Marcela Quintero Addis Abeba; May 28th, 2012

2. Contributing to these SRP entry points: Introducing and consistently follow the principles of benefit-sharing Understand and consider resource variability in basin management

3. Ecosystem services–oriented Benefits Sharing Mechanisms (BSM) in the Andes (CPWF 2 nd Phase) A mechanism negotiated in a basin between the actors that benefits from ES and those whose decisions determine the provision of ES, in order to share among them the benefits and costs associated to the delivery of ES

4. Current research sites (CPWF 2 nd phase)

5. Designing BSM Stakeholder engagement Policies Institutional arrangements Technologies and information BSM Importance of partners for research implementation and BSM implementation

6. Research for negotiating evidence-based benefit sharing mechanisms 1.What Water-related Ecosystem Service and where is it provided?* 2.Who benefits from it and what is the magnitude of the benefit?* 3.What land and water management should be promoted to maintain/improve ecosystem services at the basin scale?* 4.What are the opportunity costs of these improvements? 5.What will be the effect of a ES-based BSM on poverty and equity?

7. What Water-related Ecosystem Service and where is it provided? Total water yield Improvement/ maintenance of hydrological regime (base flows and peak flows) Retention of sediments and nutrients All of these are environmental externalities Require the understanding of upstream-downstream linkages

8. Other CIAT’s research sites in the Andes

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

10. What Water-related Ecosystem Service and where it is provided? Hydrological modeling Land use and cover map Local climatic information Streamflow measurements Soil map units and characteristics Digital elevation models

11. Who benefits from WES and what is the magnitude of the benefit? WES beneficiaryWES economic valueCurrent water charge Irrigated agriculture (US$ m 3 ) 0.0014 (0,46 M)0.003 Tourists (US$/.) 15.75 (0,76 M)n.a. Urban users Residential (US$ mon -1 ) 0.37 (0,063M)3.1 - 15 Commercial (US$ mon -1 ) 0.64 (0,017M)6.3 - 44.4 Hydropower company (US$ per additional m3) 0.055 Hydropower company (US$ / per additional 5M m3)* 10 M * Due to improvements in water flow regulation (base flows) Economic valuation of WES for different actors in the Canete River Basin (Peru) These values are reference values to be used for anticipated negotiation processes.

12. What land and water management should be promoted to maintain/improve ecosystem services at the basin scale? Impacts of conservation agriculture in potato-pasture systems At the plot and basin scale

13. Conservation agriculture impacts 13 Conservation agriculture Traditional agriculture % Volumetric Water More water stored, restoring the buffer role of paramo Conservation agriculture Traditional agriculture Accumulated Organic Matter (g/g) Better soil porosity, filtration, increased carbon storage (Quintero, 2010)

14. What are the opportunity costs for improving WES delivery? 14 S Annual net income: US$ 2,183/ha Annual net income: US$ 1,870/ha Conservation agriculture and paramo restoration supported by revolving fund Farmers‘ insufficient gain and risk aversion: only 11% converted Revolving fund credit: +180 farmers /year Potato cropping, grazing pressure, degradation of paramo (Vidal & Quintero, 2010)

15. What are the opportunity costs for improving WES delivery?

16. What would be the effects of Basin BSM on poverty and equity?

17. Changes in Gini Coefficient for per capita expenditures (2007- 2009) How a transfer of resources by means of a BSM may improve equity conditions? (Celis y Escobar, 2012)

18. Contributing to these SRP entry points: Introducing and consistently follow the principles of benefit-sharing Understand and consider resource variability in basin management

19. CLIMATE CHANGE ECOSYSTEMS ECOSYSTEM SERVICES LIVELIHOODS MITIGATION ADAPTATION - + -/+ Streamflow regulation Biodiversity conservation Carbon sequestration Food production Linkage between climate change predictions and water variability and yield

21. Our key next users Providing policymakers with compelling evidence Environmental authorities (regional and national) – Ministry of Environment (Peru); CORPOCALDAS, CAR, CORPOGUAVIO (Colombia) Authorities advisors – GIZ (Ecuador, Mexico); Patrimonio Natural (Colombia)

22. Our research partners Local NGOs with field and extension experience (FUNDESOT, PANGEA) Regional research organizations (RIMISP, CONDESAN) National and International Universities (UNAL, UNALM)

24. Antecedents CPWF 1 st phase project (PN22) – In four Andean watersheds – Provided the basis to test methodological approaches and tools for informing Payment for Watershed Services design – Permitted reflection about PES concept – Part of the formulation of the Andes BDC (2 nd phase) about BSM (beyond “pure” PES schemes)

25. Research Highlights: Putting the pieces together for designing a PES Where payments should be targeted to? Identification of service providing areas using hydrological modeling What should be the payments amount to be made by ES beneficiaries? Estimation of economic value of watershed services for different ES users: How payments should be used? Ex-ante assessment of likely eco-efficient land use alternatives; ecosystem conservation measures and social development projects.