Reciprocal watershed agreements – otherwise known as Watershared agreements – are simple, grassroots versions of incentive-based conservation that help upper watershed forest and land managers to sustainably manage their forest and water resources to benefit both themselves and downstream water users. Watershared agreements focus on changing behaviour through economic and non-economic incentives and building institutional capacity: in other words, on showing local authorities and water users that watershed protection is in their own interests, and then on helping to create the institutional framework needed to plan and implement it.

This new Inside Story on Climate Compatible Development by Nigel Asquith of Natura Bolivia describes how:

• Watershared agreements, which provide alternative development tools such as beehives, fruit tree seedlings and irrigation systems to upstream landowners, are a quick and low-cost route to forest conservation in upland watersheds of Latin America.
• The agreements rely on local negotiations and consensus, avoiding the red tape associated with nationally funded conservation incentive schemes.
• Watershared agreements can address multiple objectives, for example economic development as well a forest conservation and climate change mitigation and adaptation.
• The agreements allow for the participation of poor people because formal land titles are not a
• requirement, and bureaucracy is low. Their flexibility means that participants can design and implement them to suit local needs rather than to comply with national policies and laws.
• Households and private sector enterprises, such as water user associations, irrigators and cattle ranchers, contribute to financing the programmes.
• Public-awareness campaigns can play an important part in securing the changes in behaviour and practices that are needed to make agreements work.
• One benefit of the agreements is that they have been proven to play a role in reducing local conflicts.