Using Water Funds to Finance Watershed Conservation in the Andes and Costa Rica

Water resources are a key environmental service. Water funds are a mechanism to link conservation of watersheds and biodiversity with water utilisation and conservation. Although there are many other environmental services, water, and water funds, can act as proxies or catalysts to protect many others including biodiversity, carbon storage, soils, biogeochemical cycles, pollination, waste cycling, etc. Such protection goes a lot further than the economical benefits (Luck et al., 2009). The establishment of compensation mechanisms sets in motion public awareness and capacity building which benefits both social and environmental systems. The Conservancy has been successful in the replication of the Water Conservation Funds model in other parts of Latin America (CAF and TNC, 2009). In Colombia, we are working to create water funds in Bogota (Werman, 2009), East Cauca Valley, Cali, Sierra Nevada and Medellin. In Ecuador, several water funds are already working with TNC support, this includes Paute, Zamora, Espindola and Tungurahua.