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Scaling Up Payments for Watershed Services

Scaling Up Payments for Watershed Services. 7 th Peer Review Meeting SDC Global Programme Water Initiatives September 10, 2014. Scaling Up PWS.

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Scaling Up Payments for Watershed Services

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  1. Scaling Up Payments for Watershed Services 7th Peer Review Meeting SDC Global Programme Water Initiatives September 10, 2014

  2. Scaling Up PWS Investing in Watershed Services: utilizing innovative finance – payments for watershed services – to scale up nature-based approaches for addressing the global water crisis. • Phase 2: • projects in China, Mexico, Peru, and Ghana have moved to implementation and are developing sustainable financing mechanisms; • Bolivia is scaling up and has implemented a sustainable financing strategy COMMUNITY ANALYTICAL PROJECTS

  3. Emerging Results • On-going analysis of lessons learned – weak demand, reliance on public/donor financing is a major barrier to scale • Moving to sustainability in the demonstration projects – integrating PWS, sustainable supply chains, and impact investing – the pathway to scale?

  4. Number of programs continues to grow (left), but the water financing gap remains (right)

  5. DEMAND: Public subsidies still accounted for >90% of watershed investment in 2013. Share of transactions by program type, 2013 Source: Forest Trends’ Ecosystem Marketplace. (2014). State of Watershed Investment 2014.

  6. Top challenges: raising start-up capital and securing buyers

  7. Scale & sustainability: • Aligning PWS with: • ‘green road’ to development • sustainable supply chains • impact investment • PPF

  8. Corporate buyer – Water Benefit Certificate tm Water tariff Water fund Water footprint (agriculture, beverage, mining, energy) Sustainable Beef Sustainable Soy Sustainable Cotton Reduced erosion & sedimentation Biodiversity Clean water for downstream users Reduced GHG emissions (avoided deforestation, soil carbon) Reduced flooding downstream Impact investors Soil Health Aquifer recharge Sustainable Cacao Sustainable Coffee Green Bond Infrastructure Investment Strategies Corporate buyer – voluntary carbon offset National / regional $$; REDD+ Cost curves: cost/benefit) Corporate – sustainable supply chain Green infrastructure investment priorities

  9. Contribution to GPWI’s Strategy • 2.4: Water Economics Tools & Concepts • PWS/IWS scaled up globally through analytical tools, demonstrations, and a global COP • Water Footprint concept is validated at regional level • Water Benefit Credits mechanism established Efficient use of water in agriculture, increased access to water for agriculture

  10. Questions?Thank you! jcassin@forest-trends.org www.watershedconnect.org

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