Arab Environment Watch : IUCN advocating markets for watershed services

The option of developing market mechanisms for water resource management has been advocated by a lot of international development organizations with an economic liberalization state of mind by led by the World Bank and the World Water Council. This approach has been criticised by the other spectrum of development organization with more interest in social democracy, pointing out that this approach will render water as a commodity subject to market forces.

In the middle, a new framework of economic valuation methodology is focusing on establishing markets for watershed services. The World Conservation Union (IUCN) is advocating the use of economic valuation for aquatic ecosystems services as described in its latest publication "Pay-Establishing payments for watershed services".

IUCN states that Nature provides clean water for free – but only if watersheds upstream are kept safe and healthy, and soils free from pollution. Once the landscapes that make up watersheds – for example forests, grasslands, cultivated and riparian areas, and wetlands - are disrupted or contaminated, water becomes very expensive to purify.

These fair water markets can also help break the cycle of water overuse, deforestation and impoverished rural communities. Already 1 billion people live in areas where there is not enough water to meet basic needs, with the real onslaught of climate change still to come. Furthermore, 70% of water that is being used for agricultural production is wasted, and investments go to expanding production rather than increasing water efficiency.

Water payment schemes require careful design and people involved need to understand the benefits and costs associated with creating such markets. The new book ‘Pay’ lays out a range of payment schemes that are commonly used, from private trading, to cap-and-trade, to certification and public payment schemes. A water market and payment scheme needs to be tailored to the social, economic and political realities in any specific location. As with all natural and biological solutions, no one size fits all.

The book can be downloaded from here