Incentives for hydrological services: reinvesting in water at the source

Investments in water-related projects generally consider only the built or engineered infrastructure essential for conduction, distribution and treatment. But drinking water systems, hydropower and irrigation are intimately dependent on natural ecosystems, both terrestrial and aquatic. Functioning ecosystems stabilize flows, ensure water quality, reduce sediment and absorb and degrade contaminants. Unfortunately, around the world, silt-filled reservoirs, increasing treatment costs, and dwindling water supplies attest to the costs of not considering nature’s infrastructure in these investment decisions.

EcoDecision has been a pioneer in setting up mechanisms that bring together stakeholders, upstream and downstream, to invest in restoring and conserving functioning watersheds. Marta Echavarria has been globally recognized for her work in establishing watershed protection mechanisms in Colombia, Ecuador and Peru. As Managing Partner of EcoDecision she led the design, negotiation and establishment of the first fiduciary water fund for watershed protection in the world. Known as FONAG, in Quito, Ecuador, this model is being replicated in other Latin American and Asian countries. Despite Mark Twain’s adage that “water is for fighting over” this approach has demonstrated the power of shared concern for water to forge partnerships and consensus benefiting people and nature.