Incentives for Ecosystem Services (IES) in the Himalayas: A ‘Cookbook’ for Emerging IES Practitioners in the Region

Fiscal Year


Total (NPR)

Use of payment





– –

510,256 300,000

To buy drinking water pipe To construct school buildings To construct Indradevi temple For irrigation Schoolteacher salary

510,256 300,000

– – – – 200,000 36,000 800,000

– – – – 200,000 36,000 800,000

– – – – 200,000 36,000 800,000

35,000 50,000 200,000 12,000 265,000

35,000 50,000 1,000,000 156,000 4,000,000

– – 200,000 36,000 1,335,000

To conserve forest Bhumidanda VDC








Table 5. Direct payments received annually by Bhumidanda VDC. Source: Mr. Rit Narayan Shrestha, personal communication, Sep 9, 2015.

Dhulikhel drinking water supply system


Rate of water tariff (Before 2010)

Rate of water tariff (From July 2014)

Up to 10,000 litres 10,000–25,000 litres 25,000–50,000 litres More than 50,000 litres

NPR125 per month NPR17 per 1,000 litres NPR25 per 1,000 litres N/A

NPR 160 per month NPR 22 per 1,000 litres NPR 38 per 1,000 litres NPR 76 per 1,000 litres

Table 6. Rate of water tariffs for water supply. Source: Mr. Rit Narayan Shrestha, personal communication, Sep 9, 2015.

and Dhulikhel are now being challenged because those upstream are more aware of the uses and multiple taps on their resources downstream. Upstream dwellers have perceived that their water sources are producing less water and anticipate that they will face water scarcity in the future and will not meet their water demands for agriculture (Neupane, n.d.). According to DDWSUC, the discharge rate in Kharkhola dropped from 52 litres/sec in 1987 to 37 litres/sec in 2005, representing a decrease of 29 per cent. These changes are likely related to a broad-scale shift in the hydrological regime, while downstream uses are also changing and intensifying, such as shifts from subsistence to commercial farming, and an increase in the use of water for commercial/industrial production. Possible improvements: As gravel mining activity, for example, has badly damaged critical water zones (Neupane n.d.), areas prone to erosion should be better

managed to protect existing water flows and quality. More attention needs to be paid to which species are planted, as tree species have an impact on water held and released from the landscape e.g. native species of Shorea can improve the water-retention capacity of upstream areas. Specific activities to conserve the source should be identified and performance-linked compensation should be introduced to the upstream communities. On the downstream side, possibilities to reduce water use or identify other sources need to be explored. For example, promoting rainwater harvesting at the household level could be an option. Lastly, the process of setting up the IES scheme could be institutionalized through legal frameworks and policies to give more responsibility to the government and develop solidarity between upstream and downstream communities (Neupane n.d.). Otherwise, the long-term sustainability of the scheme appears to be at risk.


Incentives for Ecosystem Services (IES) in the Himalayas

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