Water Market

Getting clean water through market incentives is booming, and smart, as this article from Ecosystem Marketplace reports.

An excerpt.

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.

“Experts at Forest Trends’ Ecosystem Marketplace, which tracks a variety of programs that provide “payments for environmental services” or PES, find investments in watershed services emerging in both the developed and developing world as a “powerful new source for financing conservation”—and also a way to provide new “green” income opportunities for rural communities.

“The report counts at least 205 programs—up from 103 in 2008—that in 2011 collectively generated US $8.17 billion in investments, an increase of nearly $2 billion above 2008 levels. The report also identifies a raft of new programs gearing up for launch in the next year. “The level of activity is far more intense than it was just a few years ago when we began tracking these types of investments,” Jenkins said.

“For the most part, the watershed investment programs documented in the report involve relatively simple exchanges, but the return on investment can be considerable.

“For example, authorities in China are providing new health insurance benefits to 108,000 residents in struggling communities that lie upstream of the bustling southern coastal city of Zhuhai in exchange for adopting land management practices that will improve drinking water for the region. The program is just one among many such efforts underway in China, which emerged in the Ecosystem Marketplace report as the world leader in using investments in watershed services to deal with water challenges. In fact, China accounts for 91 percent of the watershed investments in 2011 documented in the report.

“China has the lowest amount of freshwater resources per capita of any major country in the world, according to the World Bank, and water scarcity and water pollution already cost China 2.3 percent of its gross domestic product. “Water insecurity poses probably the single biggest risk to the country’s continued economic growth today, and the government has clearly decided that its ecological investments will pay off,” the Forest Trends report states.

“On the other side of the world, officials in New York City were faced with the prospect of spending billions of dollars on new water treatment infrastructure. They opted instead for a much cheaper program that compensates farmers in the Catskills for reducing pollution in the lakes and streams that provide the city with its drinking water. The effort has been credited with, among other things, keeping safe drinking water flowing from city taps throughout Hurricane Sandy and its aftermath—filtration plants and water infrastructure require electricity to function, while natural ecosystems function throughout even the longest power outages.”

About David H Lukenbill

I am a native of Sacramento, as are my wife and daughter. I am a consultant to nonprofit organizations, and have a Bachelor of Science degree in Organizational Behavior and a Master of Public Administration degree, both from the University of San Francisco. We live along the American River with two cats and all the wild critters we can feed. I am the founding president of the American River Parkway Preservation Society and currently serve as the CFO and Senior Policy Director. I also volunteer as the President of The Lampstand Foundation, a nonprofit organization I founded in 2003.
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