Paying for watershed services to cities in Peru

Centre for International Forestry Research (CIFOR)

The Center for International Forestry Research’s innovation case is in Cusco, Peru. In 2013, the National Water Regulating Body of Peru approved an increment in the urban water tariff to provide a reward for ecosystem services around Piuray Lake, located near the city. This reward mechanism is being developed after the drinking water facility initiated a dialogue with communities and the rural municipality in 2012 about restoring the ecosystems of the micro-watershed and the services they provide.

This innovation case will work with local and national stakeholders to develop the knowledge base needed for the reward mechanism and study its establishment. The main stakeholders are the local communities in the Piuray micro-watershed, the local authorities, several NGOs, Cusco’s water facility, and the National Water Regulating Body. They will be involved in co-producing knowledge related to the mechanism, for example by analysing problems and proposing solutions during participatory workshops. The boundary partners, such as the national and local institutions, have an interest in knowledge related to the mechanism to facilitate environmental management and to manage tradeoffs between local rural needs and urban water demand.

This innovation case will contribute to the implementation of an equitable and efficient reward mechanism that contributes to enhancing the wellbeing of rural communities and urban water users and to improving the relationships between stakeholders. It is expected that the impacts of the mechanism will increase resilience of the social ecological system and help it adapt to climate change.

The SINCERE project will provide the means for generating key knowledge, connect this case to various European case studies, and help compare and disseminate the lessons learned.

Bruno Locatelli (CIFOR and CIRAD, University of Montpellier)