Payments for environmental services (PES) is a topic of increasing interest in Ecuador, particularly as a way to leverage funding for environmental protection. Payment systems are emerging, but as Ecuador’s experience of PES is recent, the implications for national and local welfare are not yet clear.
The objective of this study was to provide guidance in order to ensure that policies support payments systems that are beneficial to the poor, as well as to the environment. The report focuses on two case studies of payments for watershed services in Pimampiro and Cuenca.
Research findings include:
- further understanding of the hydrological functions provided by particular ecosystems is needed;
- further information is required on the value of watershed services;
- a tax managed by the municipalities should be levied on water for agricultural use based on consumption;
- household surveys may not be the most effective way to gather information to evaluate social impacts of a compensation mechanism.
