New SINCERE paper analyses the context for adopting payments for watershed services

The paper reveals that factors associated with a country's topography, hydrology, demography and institutions can influence PWS adoption.

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A SINCERE project case study focusses on paying for watershed services to cities in Peru. Photo: Bruno Locatelli, CIFOR.

Payments for watershed services (PWS) are an increasingly popular tool for watershed management, also in the Southern Hemisphere. However, the degree of PWS adoption varies across these countries: while frequently represented in Latin America, water-related payment schemes do not exist in large parts of Africa and Asia.

The causes for these adoption differences have so far been little discussed. Here we address this knowledge gap with a quantitative cross-national assessment of factors influencing the decision to adopt PWS schemes across tropical countries. Based on hypotheses from the literature, we construct a logistic regression model, testing the explanatory power of various economic, institutional, and physical-geographic variables on PWS adoption.

We show that various factors, in particular those associated with a country’s topography, hydrology, demographics, and institutions, significantly influence the probability of PWS adoption. Our analysis of the de facto framework conditions for PWS adoption also has repercussions for where donor investments in PWS would most likely pay off.

This research, in collaboration with colleagues from the von Thuenen Institute in Hamburg, forms part of the SINCERE project’s Work Package 1 on creating a knowledge map on innovative mechanisms that support the provision of forest ecosystem services.

Full reference:

Bösch, M., Elsasser, P., Wunder, S. 2019. Why do payments for watershed services emerge? A cross-country analysis of adoption contexts, World Development, Vol. 119, pp. 111-119. DOI: doi.org/10.1016/j.worlddev.2019.03.010.

Open access until 23 May

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Sven Wunder
Dr Sven Wunder works as Principal Scientist for EFI’s Mediterranean Facility (EFIMED). He leads EFI’s research activities on Payments for Environmental Services (PES) and other incentives and new business models for enhancing the provision of ecosystem services. Dr Wunder’s previous work has focused precisely on PES, but also on deforestation and poverty. His interests include the broader fields of natural resource management, biodiversity conservation, livelihoods, as well as climate change adaptation and mitigation. He has worked for CIFOR, IUCN, the Center for Development Research (Denmark) and Danida, in Brazil, Ecuador, Peru, and Indonesia. He received his PhD in Economics from the University of Copenhagen in 1992 and a DSc in Forestry from the Royal Veterinary and Agricultural University in Copenhagen in 2001.