Cooperative agreements for ecosystem services have become increasingly important tools for reducing conflicts. These agreements include voluntary cooperation, corporate-private agreements and payments for environmental services (PES – also known as payments for ecosystem services). Countries as diverse as Costa Rica, Mexico, and China are using national tax revenues to pay citizens to conserve forests and natural vegetation. National forest conservation PES schemes seem perfect precursors for national REDD (Reduced Emissions from Degradation and Deforestation) schemes given their economies of scale for equitable disbursement of benefits to providers of public goods.

However, national PES schemes are often standardized and non-targeted, giving landowners the choice as to which land parcel to enroll, and can receive the same benefit regardless of the quality or environmental importance of their land. If resource-dependent communities are to adapt to climate risks, they must be able to act and manage resources collectively (Adger 2003). In national level PES, landowners and local communities are often removed form involvement in higher level decision making and can the vital buy-in needed in order to sustain the benefits of PES.

A different form of PES has been developing. Epitomized by initiatives in Ecuador and Bolivia, these compensation schemes are locally implemented, focus on local priorities, and promote and build on local social norms. Payments are made in kind in the form of alternative development. In fact, PES is a misnomer for many such schemes and locals prefer terms such as Andean Reciprocal water Agreements (ARA - for Acuerdos Recíprocos por Agua) that better reflect both mechanics of the initiatives and local culture.

This research project aspired to identify the components of national and local level PES schemes that have been successful and the factors underpinning success, in order to aid the design of more robust PES systems that can be efficient promoters and catalysts of climate compatible development. These systems would be expected to take advantage of the economies of scale top-down national schemes as well as the effectiveness of local bottom-up schemes.

To this end, the project

• Assessed the ability of bottom-up watershed PES schemes, or ARAs, to cost-effectively pioneer climate compatible development.
• Compared the effectiveness of locally-led, bottom-up ARAs with national led government PES programmes.
• Evaluated the effectiveness of social marketing campaigns.
• Developed a guide for how to scale-up and institutionalize locally led ARAs so that such schemes can operate with economies of scale.

The project proposed a unique approach to combining adaptation, mitigation and development objectives into one index, which could then be used to evaluate and compare future climate compatible development projects as well as monitor their progress over time. One of the outputs of the project was the production of a methodological guide on how to scale-up and institutionalize locally-led ARAs, to be presented to at least 30 local and national government officials in four countries, and to be translated in English, Spanish, Chinese and Indonesian. As such, the project is also expected to have a strong impact at the international level.

The project targeted policy-makers at the national level, as well as NGOs and communities in the targeted countries (Bolivia, Colombia, Ecuador, Mexico, Costa Rica and Peru), to learn how ARA-type programmes can pioneer climate compatible development and how to eventually translate this knowledge into national laws.

Project outputs:

A major output of this project is the ARA Guide to Reciprocal Water Agreements for People and Nature, a user-guide for community leaders to negotiate reciprocal water agreements locally from the bottom-up.

The project team has also published the following articles and briefs so far:

• Driving adoption of payments for ecosystem services through social marketing, Veracruz, Mexico
• Establishing reciprocal agreements for water and biodiversity conservation through a social marketing campaign in Quanda Watershed, Peru
• Investing in Latin American Water Factories, in the Havard Review of Latin America.

On World Water Day, Kevin Green had a blog posted on the Landscapes blog highlighting the work of the research team thus far and the hypotheses being explored by the project.

In 2013, based on the project's successful ARA experience, state law-makers from Bolivia’s Santa Cruz Department (an area 50% larger than the United Kingdom) produced a draft ‘Sustainable Santa Cruz’ law to promote watershed protection, climate change adaptation, mitigation and economic development.

For more information, please visit RARE’s website on reciprocal water agreements.

CDKN funding: £490,000

Lead: Rare Conservation Latin America, Mexico; Keith Alger

Partners: Nigel Asquith, Fundacion Natura, Bolivia; Rosalia Arteaga, Fundacion Natura Regional, Ecuador; Luis Gamez, Public Utilities Company of Heredia, Costa Rica; Chrsito Marais, Department of Environmental Affairs: Natural Resource Management Programmes, South Africa.