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Cost effectiveness of Payments for Watershed Services: A case study of water supply to Greater Mumbai, India.

Submitted by Malin Lindgren 29th May 2015 15:07

The 9th International Conference on Community-Based Adaptation (CBA9) took place in Nairobi, Kenya, from April 24-30 2015. The CBA series of conferences focus on the latest developments in community-based adaptation to climate change. The theme of this year's event was "Measuring and enhancing effective adaptation", and all the posters presented at the conference were summaries of projects related to the conference theme. This poster is one of the posters featured at the conferance. For more information about CBA9, visit: If you want to learn more about community based adaptation, please visit the GICBA platform on weADAPT

Why PES as CBA?

Why Payments for Ecosystem Services (PES) as Community-Based Adaptation (CBA)?
- Forest conservation can slow climate change as also mitigate its current and future impacts.
- Yet limited success in achieving this goal as communities benefit more from alternate land uses and forest exploitation than forest conservation.
- Payments to rural communities for forest services like recreation, carbon sequestration through PES could make forest conservation attractive and wean them from deforestation.
- Added advantage of integration of forest management with service users and community 

Broad Methodology

- Use of historical data and regression models. 
- WTA through Provision Point Mechanism.
- Benefit transfer mechanisms.

The Case Study

- Focus –  Forest watershed services and local financing opportunities.
- Logic -Rural communities protect forests and sells its services, Greater Mumbai Municipal Corporation buys.
- Estimation: Opportunity costs of the local communities and deforestation induced costs.
- Analysis: Cost effective analysis against Business as Usual model.

Moving Forward

- Target PES in areas having higher deforestation rate .
- Bundling of services needed for cost effectiveness.
- Nonetheless, low increase in water charges (1.21 USD/household/year for protecting 39791 ha forests) make it worthwhile to try PWS in the critical watersheds supplying drinking water.
- Well-functioning institutions must for success.
- However, Institutional frameworks not in place so Govt. financed PES more feasible in initial stages  of PES projects.
- Need develop Ecosystem Services Index.


This poster was designed and produced by Sunita Singh.