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

Main message: Hydropower is key to development in many parts of the Himalayas. In order to sustain large hydropower projects, it is important to involve communities and share benefits with them. However, such benefit sharing or payment may not necessarily come in the form of cash, but can take other forms, including project-based support, which could be more sustainable for upstream land-use management. Local institutions, whether formal or informal, play a significant role in making such incentive-based projects effective and transparent. Case 8: Participatory Watershed Management Projects – Erosion control in Tarbela and Mangla, Pakistan

Setting: The Tarbela and Mangla watersheds in Pakistan are home to two of the largest earth-filled dams (13.69 km3 and 9.12 km3 respectively) in the world and two hydropower stations generating 3,478 MW and 10,000 MW of electricity respectively. The two watersheds experience high rates of reservoir sedimentation and soil erosion caused by human and physical factors such as deforestation on slopes, cultivation without soil/water controls, and grazing intensity (Khattak, 1991). Both dams have lost volume and the ability to regulate flow for irrigation, with the Tarbela reservoir losing one third of its volume and the Mangla losing 20 per cent since its construction in the 1970s (Butt et al., 2011). To reduce the high rates of reservoir sedimentation, the Pakistan Ministry of Water and Power started two participatory watershed management projects in 1980. Entitled “poverty reduction through participatory watershed management” projects, they involved five two-year disbursements from 2004–2007, with the smallest projects costing US$ 0.6 million in the Mangla watershed and US$ 3.3 million in the Tarbela (Pakistan Environmental Annual Plan, 2004). Services, payment and beneficiaries: These projects incentivized local communities to adopt best management practices in soil and water techniques such as check dams (small agricultural dams that slow water flow), terracing and reforestation on commercial

plantations (Porras and Neves, 2006). The sellers of the ecosystem services are the farmers and private landowners of upstream areas of the reservoir who adopt improved land management techniques. They receive direct payments from the Water and Power Development Authority (i.e. the government is the buyer of the service). Payments have been in-kind compensations and technical assistance along with other inputs to construct upstream soil and water conservation structures in the dam reservoirs. There are direct negotiations between the stakeholders involved and national government entities, such as the Ministry of Water and Power and the Forest Department, which operate as administrators of the Tarbela and Mangla dams. Lessons learned: The project watershed conservation activities have supported emerging community organizations and have generated employment opportunities. From 2004 to 2005, investments in the Tarbela watershed resulted in 96 nurseries, a plantation of 8,000 acres, the provisioning of check dams on 2,320 acres, terracing on 525 acres and general maintenance activities on 30,000 acres of land. Similarly, in the Mangla Watershed Management Project, 4,500 acres of land were afforested, upon which silt traps, check dams and terracing were constructed. This resulted in the sediment load being reduced by 25 per cent, reduced peak flows and increased total water supplies (Porras and Neves, 2006).

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Incentives for Ecosystem Services (IES) in the Himalayas