Feasibility of PES in Ukraine - Convention on Biological Diversity

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Feasibility of PES in Ukraine - Convention on Biological Diversity

WORKING TOGETHER TO

INSPIRE SUSTAINABLE

SOLUTIONS

ECONOMIC AND INSTITUTIONAL

ANALYSIS OF THE FEASIBILITY OF

PAYMENTS FOR ECOSYSTEM

SERVICES IN UKRAINE


Author: Oleg Rubel

Editor: Maya Todorova

Translation: Mid Yokshire Chamber ong>ofong> Commerce and Industry - Bulgaria

Design concept: Boyan Petkov, Ina Kalcheva

Prong>inong>ted at Geosong>ofong>t EOOD

Cover photo: ©Anton Vorauer / WWF-Canon

© Text 2012 WWF Danube-Carpathian Programme

All rights reserved

This study was prepared as part ong>ofong> THE DANUBE ong>PESong> PROJECT: PROMOTING

PAYMENTS FOR ECOSYSTEM SERVICES AND RELATED SUSTAINABLE

FINANCING SCHEMES IN THE DANUBE BASIN.

This project promotes and supports land managers who help us sustaong>inong> the benefits that we all get

from nature. The project is implemented by the WWF Danube-Carpathian Programme with the

fong>inong>ancial support ong>ofong> the GEF through UNEP and the European Commission.

WWF-DCPO

Ottakrong>inong>ger Straße 114-116

1160 Vienna, Austria

Phone: +43 1 524 54 70

Fax: +43 1 524 54 70-70

WWF-Bulgaria

Phone: +359/2 950 50 40, +359/2 950 50 41

Phone /fax: +359/2 981 66 40

WWF-România

Str. Ioan Caragea Vod nr. 26A, 010537,

sector 1, Bucureti

Tel: +40 21 317 49 96

Fax: +40 21 317 49 97


CONTENT

INTRODUCTION

ACKNOWLEDGMENTS

WATER POLICY IN UKRAINE

INTEGRATED WATER RESOURCES MANAGEMENT IN UKRAINE

INTEGRATED WATER RESOURCE MANAGEMENT IN THE UKRAINIAN PART OF THE DANUBE RIVER BASIN

WATER USE IN UKRAINE

WATER USE IN THE ODESSA REGION

UKRAINIAN AGRICULTURAL POLICY AND WATER USE

IRRIGATION ON THE SCALE OF UKRAINE

IRRIGATION IN THE ODESSA DISTRICT

ECONOMY OF WATER CONSUMPTION PRICE

SPECIAL USE BY PRIMARY WATER USERS

WATER CHARGES FOR SECONDARY WATER USERS

FINANCIAL MECHANISM OF WATER USE AND WATER RESOURCES PROTECTION

FINANCIAL MECHANISMS IN OTHER NATURE MANAGEMENT SECTORS

WHAT IS NECESSARY TO BE DONE TO IMPROVE THE ECONOMIC MECHANISMS OF NATURE

MANAGEMENT?

REQUIREMENTS FOR THE INTRODUCTION OF MECHANISMS OF PAYMENTS FOR ECOSYSTEM SERVICES

POTENTIAL ong>PESong> SCHEMES

Reedbed management

Erosion control measures

Water quality and water resources management

Wetlands restoration and ecotourism

Implementation ong>ofong> ong>PESong> schemes ong>inong> other regions ong>ofong> Ukraong>inong>e

CONCLUSIONS

Appendix 1: MANAGEMENT OF REEDBED IN THE DANUBE DELTA REGION – STENSOVSKO-

ZHEBRIYANSKY FLOODPLAIN

Appendix 2: RESTORATION OF FOREST BELTS AND OTHER ANTI EROSION ACTIONS IN REGION OF THE

LOWER DANUBE

Appendix 3: RESTORATION OF RESOURCES IN THE UNIQUE AQUATICS OF THE DANUBE RIVER AND THE

NORTH-WESTERN PART OF THE BLACK SEA

Appendix 4: RENATURALIZATION OF POLDER IN THE AREA BETWEEN THE LAKES KARTAL AND

KUGURLUY

Appendix 5: RENATURALIZATION OF THE SASYK ESTUARY

Appendix 6: BOGATAYA FARM

Appendix 7: INTRODUCTION OF ong>PESong> MECHANISM IN THE KALMIUS RIVER BASIN

Appendix 8: THE SCHEME OF IRRIGATIN G NETWORKS IN THE ODESSA OBLAST

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INTRODUCTION

Recently, ong>inong>novative fong>inong>ancong>inong>g

mechanisms have been recognized

as essentials for addressong>inong>g

some ong>ofong> the identified failures ong>inong>

environmental management, ong>inong>

particular, Payments for Ecosystem

Services (ong>PESong>). In a situation ong>ofong> high

environmental concerns and limited

fong>inong>ancial resources, ong>PESong> can generate

additional alternative resources,

allocate funds to environmentally

friendly management practices and

sustaong>inong>able production patterns,

create ong>inong>centives for ong>inong>vestments,

and ong>inong>crease the ong>inong>volvement ong>ofong>

the private sector ong>inong> environmental

protection.

The second meetong>inong>g ong>ofong> the Workong>inong>g

Group on Integrated Water Resources

Management, held ong>inong> Geneva ong>inong>

June 2006, examong>inong>ed the concept ong>ofong>

payment for ecosystem services ong>inong>

terms ong>ofong> ong>inong>tegrated water resources

management, and proposed to

the United Nations Economic

Commission for Europe a Draft

Code ong>ofong> Conduct on Payments for

Ecosystem Services ong>inong> Integrated

Water Resources Management.

“Ecosystem services” literary mean

the benefits that people get from

nature. Accordong>inong>g to the Millennium

Ecosystem Assessment (2000), all

benefits from nature are classified ong>inong>to

4 groups ong>ofong> ecosystem services. These

ong>inong>clude:

• Provisionong>inong>g services, beong>inong>g the

capacity ong>ofong> ecosystems to provide

food, water supply, wood;

© Maxim Yakovlev, Danube Biosphere Reserve

The Danube Biosphere Reserve – the only place ong>inong> Europe where land grows due to sediments.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 1


• Regulatong>inong>g services, beong>inong>g the

capacity ong>ofong> ecosystems to regulate

the climate, floods, diseases, wastes

and quality ong>ofong> water;

• Cultural services - recreational,

aesthetic and spiritual needs;

• Supportong>inong>g services, such as soil

formation, photosynthesis and

nutrients cycle.

The term “ong>inong>vestments ong>inong>to ecosystem

services” is used ong>inong> the current

analysis to describe the fong>inong>ancial and

technical ong>inong>vestments ong>inong>to restoration,

preservation, protection ong>ofong>

ecosystems, which are important for

the provision ong>ofong> ecosystem services.

The report was developed withong>inong>

the project “Promotong>inong>g Payments

for Ecosystem Services and Related

Sustaong>inong>ed Fong>inong>ancong>inong>g Schemes ong>inong> the

Danube Basong>inong>”, which is implemented

by WWF with the fong>inong>ancial support

ong>ofong> UNEP through GEF. The report

covers:

• Analysis ong>ofong> water policy ong>inong> Ukraong>inong>e -

implementation ong>ofong> ong>inong>tegrated water

management ong>inong> Ukraong>inong>e and the

Ukraong>inong>ian Danube Basong>inong>;

• Structure and dynamics ong>ofong> water

consumption, ong>inong>cludong>inong>g irrigation;

• Fong>inong>ancial mechanisms related to

water protection and consumption;

• Measures necessary for the

ong>inong>troduction and improvement

ong>ofong> economic mechanisms and

implementation ong>ofong> ong>PESong>;

• Examples ong>ofong> potential ong>PESong> schemes.

ACKNOWLEDGMENTS

The author is grateful to all experts and water users who helped to prepare the

analysis:

Olga Genova, Aleksandr Voloshkevich, Natalia Goriup, Mikhail Zmud,

Valentong>inong>a Lavrenova, Oleg Skaraev, Natalya Sekova, Valery Babchuk,

Larisa Kupong>inong>ens, Viktor Golubchenko, Natalya Zakorchevna.

Special gratitude ong>ofong> the author to Maria Tarasova.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 2


WATER POLICY IN UKRAINE

Ukraong>inong>e belongs to European

countries with poor local water

resources, which are distributed very

unevenly. The water use efficiency is

extremely low, and the water ong>inong>tensity

ong>ofong> GDP (water consumed per unit

ong>ofong> gross domestic product) is high

enough 1 .

The reform ong>ofong> the water management

system ong>inong> Ukraong>inong>e remaong>inong>s a major

subject for discussion by authorities

and scientists. The practical

implementation ong>ofong> river basong>inong>

management based on ong>inong>tegrity,

ong>inong>terrelationship and consistency

with economic development, has been

under discussion for a long time.

The issues ong>ofong> basong>inong> management

autonomy related to the priorities

ong>ofong> carryong>inong>g out water management

and protection busong>inong>ess; attractong>inong>g

ong>inong>vestments for the implementation

ong>ofong> promisong>inong>g ong>inong>novative projects;

commercialization ong>ofong> public areas ong>ofong>

water management remaong>inong> pendong>inong>g.

Prong>inong>ciples ong>ofong> ong>inong>teraction between

basong>inong> management admong>inong>istration

and relevant subsections ong>ofong> the

Mong>inong>istry ong>ofong> Environment ong>ofong> Ukraong>inong>e

and other agencies also remaong>inong>

vague, which agaong>inong> creates the same

regulatory vacuum for development

ong>ofong> appropriate water management

projects, which can dramatically alter

the functional orientation ong>ofong> the water

use ong>inong> general and ong>inong> its different

sectors.

The norms ong>ofong> the environmental law,

adopted by the Law ong>ofong> Ukraong>inong>e “On

Environmental Protection” 2 are

the basis ong>ofong> the legal relations ong>inong> the

field ong>ofong> water resources management

and protection. The Water Code ong>ofong>

Ukraong>inong>e 3 , approved by the Resolution

ong>ofong> the Verkhovna Rada ong>ofong> Ukraong>inong>e

on June 6, 1995, № 214/95-VR is

the basic document regulatong>inong>g the

legal relations ong>inong> the field ong>ofong> water

use. Accordong>inong>g to its provisions, the

tasks ong>ofong> water legislation ong>ofong> Ukraong>inong>e

are to regulate legal relationships

ong>inong> order to ensure the conservation,

science-based and rational water

use for the needs ong>ofong> the society

and the economy, water resources

recharge, protection ong>ofong> water from

pollution, contamong>inong>ation and

depletion, prevention ong>ofong> harmful

effects ong>ofong> water and mitigation ong>ofong>

their consequences, improvong>inong>g the

status ong>ofong> water bodies and protection

ong>ofong> the water use rights ong>ofong> enterprises,

ong>inong>stitutions, organizations and

ong>inong>dividuals 4 . Ukraong>inong>e has ratified

several ong>inong>ternational conventions,

1

Which is also explaong>inong>ed by underestimation ong>ofong> GDP ong>ofong> Ukraong>inong>e because ong>ofong> high rate ong>ofong> shadow economy –

up to 40-60% (see http://ekonomist.kiev.ua/economics/tenevaya-ekonomika-ukraong>inong>y.html)

2

http://zakon1.rada.gov.ua/cgi-bong>inong>/laws/maong>inong>.cgi?nreg=1264-12

3

http://zakon1.rada.gov.ua/cgi-bong>inong>/laws/maong>inong>.cgi?nreg=213%2F95-%E2%F0

4

Ibid

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 3


ong>inong> particular, the ong>Conventionong> on

Transboundary Watercourses,

and declared ong>inong>tention to follow

the implementation ong>ofong> the Water

Framework Directive 2000/60/EC ong>ofong>

the European Union under the Action

Plan “Ukraong>inong>e - EU” approved by the

Cabong>inong>et ong>ofong> Mong>inong>isters ong>ofong> Ukraong>inong>e №

117 – p ong>ofong> 4/22/05 and number 36 - p

ong>ofong> 2/12/05.

Dependong>inong>g on the type ong>ofong> economic

agents participatong>inong>g ong>inong> the water use

process, the volume ong>ofong> operation and

the environmental impacts on water

resources, two major groups ong>ofong> water

use can be identified: general water

use by the general public on common

base which is not related to generatong>inong>g

any prong>ofong>it and special water use by

busong>inong>esses and ong>inong>dividuals.

The management ong>ofong> the general water

use on common base is limited to the

establishment ong>ofong> sanitary ong>inong>spection

rules, which aim at consumers’ safety,

and rules that prevent environment

deterioration as a result ong>ofong> negligent

treatment, pollution or contamong>inong>ation

ong>ofong> water bodies. It is implemented

by the local authorities which agree

their management decisions with

the governmental agencies for

environmental protection, water

resources monitorong>inong>g, sanitary and

epidemiologic security.

Water legislation ensures the

implementation ong>ofong> a wide range ong>ofong>

measures for water protection from

pollution, depletion, prevention ong>ofong>

the harmful effects ong>ofong> water and

elimong>inong>ation ong>ofong> the consequences ong>ofong>

disasters.

Special water use is a fence ong>ofong> water

from water objects with application

ong>ofong> constructions or technical devices,

use ong>ofong> water for dump ong>ofong> pollutong>inong>g

substances ong>inong> water objects, ong>inong>cludong>inong>g

a fence ong>ofong> water and dump ong>ofong> pollutong>inong>g

substances with turnaround waters

Fishong>inong>g is an important maong>inong>stay for local communities.

© Maxim Yakovlev, Danube Biosphere Reserve

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 4


with application ong>ofong> channels 5 .

As to the department structure ong>ofong>

water management ong>inong> Ukraong>inong>e there

are:

• Legislative and representative

bodies, local government bodies:

performong>inong>g normative, fiscal, and

partly analytical and ong>inong>formational

functions (the Verkhovna Rada ong>ofong>

Ukraong>inong>e, the Verkhovna Rada ong>ofong> the

Autonomous Republic ong>ofong> Crimea,

Kyiv and Sevastopol City Councils,

regional councils, rural, village,

town and district (ong>inong> the cities)

councils;

• Executive agencies: the Cabong>inong>et ong>ofong>

Mong>inong>isters, the Council ong>ofong> Mong>inong>isters

ong>ofong> the Autonomous Republic ong>ofong>

Crimea and public admong>inong>istration

at regional and local levels

(ong>inong>stitutional, normative, fiscal

functions);

• Specially authorized bodies for

the management, conservation

and reproduction ong>ofong> water

resources (ong>inong>tegrated management,

implementation ong>ofong> the unified

scientific-technical policy,

coordong>inong>ation ong>ofong> activities

ong>ofong> mong>inong>istries, departments,

enterprises, ong>inong>stitutions and

organizations ong>ofong> this area):

Mong>inong>istry ong>ofong> Regional Development,

Construction and Communal

Livong>inong>g ong>ofong> Ukraong>inong>e - production

and operatong>inong>g ong>ofong> environmental,

ong>inong>vestment, analytical and

ong>inong>formation functions; the Mong>inong>istry

ong>ofong> Environment and Natural

Resources ong>ofong> Ukraong>inong>e – executong>inong>g

environmental, analytical and

ong>inong>formation, ong>inong>vestment functions;

the State Agency for Water

Resources ong>ofong> Ukraong>inong>e – production

and operatong>inong>g ong>ofong> environmental,

analytical and ong>inong>formation,

ong>inong>vestment functions (Fig. 1) 6 .

The State Agency for Water Resources

ong>ofong> Ukraong>inong>e 7 is the central specially

authorized body ong>ofong> the executive

power ong>inong> the area ong>ofong> water use and

protection, and reproduction ong>ofong>

water resources. The maong>inong> tasks

ong>ofong> the Agency are: developong>inong>g and

implementong>inong>g the state policy for

water resources development and land

reclamation; surface water resources

management, use and reproduction;

operatong>inong>g the complex public water

facilities, ong>ofong>f-farm irrigation and

draong>inong>age systems.

5

Charges for special water use is imposed with the aim ong>ofong> encouragong>inong>g rational water use and protection,

and reproduction ong>ofong> water resources accordong>inong>g to the Act ong>ofong> the Cabong>inong>et ong>ofong> Mong>inong>isters ong>ofong> Ukraong>inong>e №836

ong>ofong> 18.05.99 “On norms ong>ofong> charges for special water use and charges for water use for the needs ong>ofong> the

hydropower engong>inong>eerong>inong>g and the water transport”.

6

Tarasova M.L. Organizational and economic mechanism ong>ofong> water resources management ong>inong> Ukraong>inong>e –

doctoral thesis speciality 08.00.03 – Economy and national economy management, Doneck- 2011-255 pp.

7

Clause on State Agency ong>ofong> water resources ong>ofong> Ukraong>inong>e, approved by the decree ong>ofong> the President ong>ofong>

Ukraong>inong>e ong>ofong> April,13,2011 № 453/2011.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 5


Verhovna Rada

ong>ofong> Ukraong>inong>e

Determong>inong>ation ong>ofong> public

policy and authorities

Cabong>inong>et ong>ofong> Mong>inong>isters ong>ofong>

Ukraong>inong>e

Coordong>inong>ation ong>ofong> activities

Specially authorized bodies ong>inong> the field ong>ofong> water resources

management, use, protection and reproduction

Mong>inong>istry ong>ofong> Regional Development, Construction and Communal Livong>inong>g

Mong>inong>istry ong>ofong> Ecology and Natural Resources

State Agency ong>ofong> Water Resources

Public ong>inong>stitutions whose authority is connected to water use

Mong>inong>istry ong>ofong> Energy and Coal Mong>inong>ong>inong>g Industry

Ukraong>inong>ian State Service ong>ofong> Sea and River Transportation, Mong>inong>istry ong>ofong>

Infrastructure

State Agency ong>ofong> Fishong>inong>g Management

Mong>inong>istry ong>ofong> Industry

Public ong>inong>stitutions whose activities/ decisions

ong>inong>directly ong>inong>fluence the situation ong>inong> field ong>ofong> water use

Mong>inong>istry ong>ofong> Social Policy

Mong>inong>istry ong>ofong> Agrarian

Policy and Food

Public ong>inong>stitutions with authoriries ong>ofong> ong>inong>ter-branch character

Mong>inong>istry ong>ofong> Health

Mong>inong>istry ong>ofong> Economic Development and Trade

Mong>inong>istry ong>ofong> Fong>inong>ance

National Statistics Service

National Tax Service

Fig.1.

Structure ong>ofong> water

resources management

bodies ong>inong> Ukraong>inong>e

State Agency on Investments and National Projects

Management

State Agency ong>ofong> Energy Efficiency and Savong>inong>g

State Agency ong>ofong> Ecological Investments

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 6


INTEGRATED WATER RESOURCES MANAGEMENT IN UKRAINE

The implementation ong>ofong> state policy

on sustaong>inong>able development ong>ofong> the

water economy is based on strategic

objectives ong>inong>cludong>inong>g the restoration

and protection ong>ofong> water bodies,

improvement ong>ofong> the technical and

sanitary quality ong>ofong> water economy

systems, rational water use. The

Ukraong>inong>ian Law on State Programme

ong>ofong> Water Economy Development (№

2988 - SH from 1/17/02) proposes

priority actions which ong>inong> the future

(until 2011) will contribute to the

improvement ong>ofong> the environmental

status ong>ofong> land reclamation systems,

reachong>inong>g conformity ong>ofong> the water

bodies environmental and resource

status with the basic standard

requirements, which guarantee

the safety ong>ofong> the population and

achievement ong>ofong> the balance between

the levels ong>ofong> anthropogenic impacts

on water bodies and their recharge

capacity 8 .

The need to implement the prong>inong>ciples

ong>ofong> river basong>inong> management ong>inong> Ukraong>inong>e

is set ong>inong> the Water Code ong>ofong> Ukraong>inong>e.

One ong>ofong> the development areas ong>ofong>

the water basong>inong> management is the

design and ong>inong>troduction ong>ofong> fong>inong>ancial

mechanism ensurong>inong>g the direct long>inong>k

between the payments for water use

and the fundong>inong>g ong>ofong> water conservation

measures withong>inong> the river basong>inong>s.

Accordong>inong>g to the State Agency ong>ofong>

Water Resources 9 , nong>inong>e water basong>inong>

management agencies (WBMA) (the

Dnieper, the Dniester and Prut, the

Danube, the Crimean, the Southern

Bug, the Seversky Donets, the Western

Bug, the Desnyanskiy, the Ros River)

and five basong>inong> councils (the Dniester,

the Danube, the Southern Bug, the

Seversky Donets, the Western Bug)

should have been set up 10 by 2010.

Accordong>inong>g to the “Priorities ong>ofong>

management reform and protection ong>ofong>

water resources for the period 2006 –

2015” the establishment ong>ofong> the basong>inong>

management agencies for the Tisza,

the Pripyat, the Azov Sea, the Upper

and Lower Dnieper is planned 11 . The

ecosystem approach to water use,

protection and restoration is the most

comprehensively laid down ong>inong> the

National project on environmental

rehabilitation ong>ofong> the Dnepr river

8

Stashuk V.A. Ecological and economic basis ong>ofong> water resources basong>inong> management. –Dnipropetrovsk:

Publishong>inong>g House “Zoria”, 2006. – 480pp.

9

Site ong>ofong> the State Agency ong>ofong> Water Resources ong>ofong> Ukraong>inong>e: http://www.scwm.gov.ua/

10

Accordong>inong>g to the State Agency ong>ofong> Water Resources:

http://www.scwm.gov.ua/ong>inong>dex.php?option=com_content& task=view&id=2&Itemid=3.

11

Priority directions ong>ofong> reformong>inong>g ong>ofong> water resources management and protection for the period 2006-2015.

Oficial site ong>ofong> State Committee ong>ofong> Ukraong>inong>e for Water Economy – 2009. December,27

http://www.scwm.gov.ua/ong>inong>dex.php?option=com_content&task=view&id=195&Itemid

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 7


asong>inong> 12 . What places constraong>inong>ts

on the ong>inong>troduction ong>ofong> river basong>inong>

management approach is imperfect

economic mechanisms, funded maong>inong>ly

by the state and the absence ong>ofong> legal

framework for the functionong>inong>g ong>ofong> basong>inong>

agencies accordong>inong>g to The polluter

pays and Self-fong>inong>ancong>inong>g and selfsufficiency

prong>inong>ciples.

Comparative analysis ong>ofong> the

managerial functions ong>ofong> the EU river

basong>inong> agencies and their Ukraong>inong>ian

counterparts shows that they mostly

operate ong>inong> different water use areas.

EU river basong>inong> agencies work on

standardization and fong>inong>ancial issues

ong>ofong> water use (chargong>inong>g water users,

decisions about loans and grants) and

research work (economic analysis ong>ofong>

water use withong>inong> the basong>inong>).

Ukraong>inong>ian basong>inong> management agencies

work on the direct implementation

ong>ofong> water supply (ensurong>inong>g the needs

ong>ofong> the population and sectors ong>ofong>

economy ong>inong> water, implementation

ong>ofong> its ong>inong>ter-basong>inong>s transfer schemes),

and on the control ong>ofong> the quality ong>ofong>

surface water resources, compliance

with environmental laws, as well

as providong>inong>g a number ong>ofong> fee-based

services ong>ofong> organizational and

consultative nature 13 .

Up to 1000 local people are ong>inong>volved ong>inong> harvestong>inong>g reed.

© Maxim Yakovlev, Danube Biosphere Reserve

12

Site «UNDP GEF Dnipro Basong>inong> Environment Programme». – 2009. – October, 22.

http://www.dnipro-gef.net:80/first_stage-ru/otchety-po-proektam

13

Tarasova M.L. Organisational and economic mechanism ong>ofong> water resources management ong>inong> Ukraong>inong>e –

doctoral thesis speciality 08.00.03 – Economy and national economy management, Doneck - 2011-255pp

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 8


INTEGRATED WATER RESOURCE MANAGEMENT IN THE

UKRAINIAN PART OF THE DANUBE RIVER BASIN

Reformong>inong>g the system ong>ofong> water

management ong>inong> the Odessa oblast

(region) started with the foundation

ong>ofong> the Danube River Basong>inong> Water

Resources Management Agency

(WBMA) ong>inong> Izmail, responsible for:

water resources management ong>ofong> the

Ukraong>inong>ian part ong>ofong> the Danube River

Basong>inong> withong>inong> Reni, Bolgrad, Izmail

and Kilia districts ong>ofong> the Odessa

oblast; operation ong>ofong> the Danube water

reservoirs Cahul, Karatal, Kugurluy-

Ialpug, Katlabuh and Kilia; operation

ong>ofong> hydraulic structures (high-water

dams, locks, channels) (Fig. 2).

The Danube River Basong>inong> Council was

founded ong>inong> July 2008, ong>inong> the Danube

region ong>ofong> Ukraong>inong>e, with the support

ong>ofong> TACIS project “Improvong>inong>g crossborder

cooperation ong>inong> ong>inong>tegrated

management ong>ofong> water resources ong>inong> the

Lower Danube Euroregion”.

Representatives ong>ofong> regional

and district councils, district

admong>inong>istrations, public ong>inong>stitutions

(Basong>inong> Management, Department

ong>ofong> Ecology, hydro-meteorological

observatory, sanitary and

epidemiologic service), water users,

scientific and public organizations

formed the Basong>inong> Board. The

Secretariat ong>ofong> Basong>inong> Council was

established as a permanent workong>inong>g

Fig. 2. Watersheds ong>inong> Odessa District

body, on the basis ong>ofong> the Danube

WBMA.

In the framework ong>ofong> the TACIS project

“Improvong>inong>g cross-border cooperation

ong>inong> ong>inong>tegrated management ong>ofong> water

resources ong>inong> the Lower Danube

Euroregion” the Management Plan for

the Ukraong>inong>ian part ong>ofong> the basong>inong> ong>ofong> the

Lower Danube was developed 14 .

The management ong>ofong> the river basong>inong>

water resources can be implemented

on the basis ong>ofong> basong>inong> agreement

which is the maong>inong> legal ong>inong>strument

© Roman Sizo, Centre for Regional Studies

14

Dyakov O. Transfer to basong>inong> prong>inong>ciple ong>ofong> water resources management ong>inong> the Odessa region: problems

and perspectives/ O. Dyakov. - http://old.niss.gov.ua/Monitor/januar2009/18.htm

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 9


and consolidates the relationship ong>ofong>

the contractong>inong>g parties. As ong>ofong> today,

such agreements are concluded on the

management ong>ofong> the Danube, as well as

the Dniester and Southern Bug rivers.

In this way, ong>inong> the Odessa region

ong>ofong> the Ukraong>inong>ian Danube region,

the first steps towards creatong>inong>g a

system ong>ofong> river basong>inong> management

have been made; favorable

conditions for the implementation

ong>ofong> the prong>inong>ciples ong>ofong> ong>inong>tegrated water

resources management ong>inong> the context

ong>ofong> implementation ong>ofong> the Water

Framework Directive 200/60 have

been created.

WATER USE IN UKRAINE

Over the past 20 years production

volumes ong>inong> Ukraong>inong>e decreased. The

declong>inong>e was especially notable ong>inong>

the early 90s.This was reflected to

some extent ong>inong> the volume ong>ofong> water

withdrawal.

ong>inong> million m.cubic

40000

35000

30000

25000

20000

15000

10000

5000

Although the total water withdrawal

ong>inong> 2009 declong>inong>ed ong>inong> comparison with

1980 by almost 20 billion m 3 , the high

level ong>ofong> transportation losses and the

high proportion ong>ofong> discharged waste

water remaong>inong>s the manifestation ong>ofong>

deterioration ong>inong> water use 15 (Fig. 3).

Losses at transportation, million ong>inong> m. cubic

Water fence ong>ofong> all million ong>inong> m. cubic.

Water removal, million ong>inong> m. cubic

Share ong>ofong> the dumped polluted waters, %

%

50

45

40

35

30

25

20

15

10

5

0

0

1980 1985 1990 1995 2000 2005 2010

years

Fig. 3. Characteristics ong>ofong> water withdrawal and discharge ong>inong> Ukraong>inong>e

15

Khvesyk M. GolYan V Rationalization ong>ofong> Water Use ong>inong> the Modern Civilized Measure: Strategic Choice ong>ofong>

Domong>inong>ant and Institutional Ordonnance Mykhaylo Khvesyk, Vasyl Gol Yan. — The Economist Ukr J. — №4.

— 2011 — P.34-35

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 10


In 2009, 14 478 million m 3 ong>ofong> water

was withdrawn from natural sources.

Compared to 2008, the total ong>inong>take

decreased by 1 251 million m 3 , which

ong>inong> turn could be long>inong>ked to the fall

by 15% ong>ofong> Ukraong>inong>e’s GDP under the

conditions ong>ofong> the global economic

crisis 16 .

The country maong>inong> water users

remaong>inong> the electric power companies,

communal and agricultural

companies, and metallurgy (Fig. 4).

ong>inong> million m.cubic

7000

6000

5000

The ong>inong>dustry

Agriculture

Housong>inong>g and communal services

4000

3000

2000

1000

0

2001 2002 2003 2004 2005 2006 2007 2008

years

Fig. 4. Dynamics ong>ofong> water use by the maong>inong> sectors ong>ofong> the economy ong>ofong> Ukraong>inong>e (excludong>inong>g

marong>inong>e waters) 17 , 2001-2007, mil.m 3

16

Economic crisis ong>inong> Ukraong>inong>e (2008-2009) URL: http://ru.wikipedia.org/?oldid=38626755 (date ong>ofong> address:

22.10.2011).

17

Accordong>inong>g to State Agency ong>ofong> Water Resources: http://www.scwm.gov.ua/

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 11


WATER USE IN THE ODESSA REGION

Water resources ong>ofong> the Odessa region

consist ong>ofong> groundwater and surface

water. The stocks ong>ofong> surface waters ong>inong>

the region are unevenly distributed.

The northern and central parts ong>ofong> the

region are characterized by limited

reserves, and the southern part related

to the basong>inong> ong>ofong> the Dniester and the

Danube, has a large supply ong>ofong> water.

In 2009, water withdrawal totaled to

2 134.0 million m 3 , which was 453.0

million m 3 less than ong>inong> 2008. Reduced

amount ong>ofong> withdrawal ong>ofong> surface

freshwaters ong>inong> 2009 was maong>inong>ly due

to decrease ong>inong> the volume ong>ofong> water

transfer ong>inong> the water exchange carried

between the lake Sasyk and the

Danube reservoirs and Tatarbunary

water canal.

In 2009, 322.6 million m 3 ong>ofong> fresh

water was used ong>inong> the region (Fig.

5), ong>inong>cludong>inong>g 33.77 million m 3 from

ground sources, respectively: on

housong>inong>g - 122.0 million m 3 ; on

production - 61.12 million m 3 ; on

agriculture - 12.21 million m 3 ; on

irrigation - 71.29 million m 3 ; on

fisheries - 54.63 million m 3 and on

other sectors - 1.35 million m 3 .

Fish economy

17%

Municipal needs

38%

Irrigation

22%

Agricultural water

supply

4%

Industrial needs

19%

Fig. 5. Structure ong>ofong> water consumption ong>inong> the Odessa region by economic sectors

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 12


In 2009, the volume ong>ofong> water used

for housong>inong>g needs was reduced by 1.5

million m 3 . The volume ong>ofong> water use

ong>inong>creased: for ong>inong>dustrial needs - 6.2

million m 3 , irrigatong>inong>g - 7.5 million

m 3 , agricultural use - 0.02 million m 3

(Fig. 6).

million m.cubic

600

500

400

It is used fresh water (ong>inong>cludong>inong>g sea water) ong>inong>cludong>inong>g:

Industrial needs

Municipal needs

Irrigation

Agricultural water supply

Fish economy

Water losses at transportation

300

200

100

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

years

Fig. 6. Dynamics ong>ofong> water use ong>inong> the Odessa region by economic sectors

UKRAINIAN AGRICULTURAL POLICY AND WATER USE

Ukraong>inong>e has favorable natural

conditions for agricultural production,

which is a traditional activity. The

absence ong>ofong> land reform, poor logistical

support for agriculture, disparities ong>inong>

prices for ong>inong>dustrial and agricultural

products, state ong>ofong> the social

development ong>ofong> rural areas impede the

development ong>ofong> agriculture. This has

led to deterioration ong>ofong> the capital stock

and equipment ong>inong> agriculture, and to a

declong>inong>e ong>inong> production volumes.

In 2000, agriculture ong>inong> Ukraong>inong>e

improved the dynamics ong>ofong>

development, which is associated

primarily with the important reforms

conducted ong>inong> this year, as well as with

positive effects ong>ofong> devaluation caused

by the fong>inong>ancial crisis ong>inong> late 1998 and

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 13


early 1999.

Accordong>inong>g to the Land-Utilization

Institute ong>ofong> Ukraong>inong>ian Academy ong>ofong>

Agrarian Sciences 18 about 3.2 million

ha ong>ofong> degraded and unproductive

arable land ong>inong> Ukraong>inong>e need

conservation. This is due to the high

level ong>ofong> tilled land, ong>inong>creased area ong>ofong>

row crops, straw burnong>inong>g after harvest

ong>ofong> cereals, decrease ong>ofong> the use ong>ofong>

organic and mong>inong>eral fertilizers.

The reduced number ong>ofong> livestock

led to the decrease ong>inong> areas under

fodder crops, ong>inong>cludong>inong>g annual and

temporary grass.

Accordong>inong>g to the State Committee on

Land Resources ong>ofong> Ukraong>inong>e (ong>inong> 1996),

19 360.4 thousand ha ong>ofong> farmlands

were exposed to wong>inong>d erosion, 13

284.2 thousand ha - to water erosion

(the so-called washed earth). Due

to erosion, about 11 million tons ong>ofong>

humus is lost every year.

The maong>inong> factor determong>inong>ong>inong>g

significant development ong>ofong> erosion

processes ong>inong> Ukraong>inong>e is the high

ong>inong>tensity ong>ofong> developong>inong>g agricultural

lands and the use ong>ofong> imperfect farmong>inong>g

technologies. Application ong>ofong> organic

fertilizers decreased from 257 million

tons ong>inong> 1990 to 12 million tons ong>inong>

2007, or by nearly 20 times, which

created a substantial threat to the

preservation ong>ofong> fertility. Due to the

dramatic declong>inong>e ong>inong> livestock, the

use ong>ofong> organic fertilizers per utilized

agricultural area decreased 9 times.

The primary issues that need to be

solved ong>inong> agriculture are: conversion

to organic farmong>inong>g; ong>inong>crease ong>ofong> the

use ong>ofong> mong>inong>eral and organic fertilizers

and pesticides to an optimum level

with simultaneous high-quality

regulation, observong>inong>g their necessary

territorial, quantitative and qualitative

proportions; implementation ong>ofong>

soil conservation measures, erosion

control measures; eco landscape

design and plannong>inong>g ong>ofong> agricultural

activities and land use at all

hierarchical levels; optimal eco-humus

system ong>ofong> soil cultivation withong>inong> the

ong>inong>dividual farms; ensurong>inong>g ecological

safety ong>ofong> ong>inong>dividual agricultural

objects 19 .

18

http://www.uaan.gov.ua/viddil.php

19

Kupong>inong>ets L.E. Ekologization ong>ofong> food complex: the theory, methodology, mechanisms. - Odessa: Institute

ong>ofong> market problems and economic-ecological researches ong>ofong> NAS ong>ofong> Ukraong>inong>e, 2010 - 712 pp.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 14


IRRIGATION ON THE SCALE OF UKRAINE

Land reclamation is a major factor ong>inong>

the ong>inong>tensification ong>ofong> agriculture, an

important component ong>ofong> sustaong>inong>able

agricultural production, especially

ong>inong> years with unfavorable climatic

conditions. Reclaimed land is actually

an ong>inong>surance fund ong>ofong> the Ukraong>inong>ian

state.

Withong>inong> Ukraong>inong>e there are three

climatic zones: humid Forest zone

(25% ong>ofong> the area), not humid Forest-

Steppe zone (35%) and dry Steppe

(40%).

Irrigated lands are spread on an area

ong>ofong> 2.33 million ha. The maong>inong> irrigated

lands are located ong>inong> the steppe zone

- 2.0 million ha (86% ong>ofong> the total

irrigated area), 324 thousand hectares

ong>inong> the forest-steppe zone and 9.5

thousand hectares ong>inong> the forest zone

are irrigated. The share ong>ofong> irrigated

land ong>inong> the total agricultural land is

7.2%. In the Autonomous Republic

ong>ofong> Crimea the ratio ong>ofong> irrigated area

to arable land is 30%, ong>inong> Kherson

region - 26%, ong>inong> Zaporizhsky -

13%, ong>inong> Dnipropetrovsky - 11%, ong>inong>

Odessa -11%, ong>inong> Nikolaev - 11.1%, ong>inong>

Donetsk - 8% 20 . Because ong>ofong> the poor

technical condition ong>ofong> the irrigation

network and lack ong>ofong> irrigation systems

considerable part ong>ofong> irrigated land

remaong>inong>s unused.

Services ong>ofong> water supply to agricultural

producers are among the maong>inong> ones

ong>inong> the water management system ong>ofong>

Ukraong>inong>e. Typical Ukraong>inong>ian practice

is the compensation ong>ofong> water users

for adverse weather conditions. An

element ong>ofong> fosterong>inong>g the development

ong>ofong> irrigated agriculture ong>inong> Ukraong>inong>e is

the ong>ofong>fset ong>ofong> 50% to 80% ong>ofong> consumed

water to farmers usong>inong>g irrigated land.

This is one ong>ofong> the measures ong>ofong> state

support to rural areas, approved

by the Government ong>ofong> Ukraong>inong>e “On

urgent measures to mitigate the

negative effects ong>ofong> drought and ensure

the formation ong>ofong> graong>inong> resources for

harvest year 2007” on June 4, 2007,

№ 794.

Compensation ong>ofong> 35 million UAH

from the state budget ong>inong> 2007 was

paid to agricultural enterprises

ong>ofong> all forms ong>ofong> ownership and

management (except the budget

ones), which ong>inong>clude farmers, private

agricultural enterprises, physical

persons and entrepreneurs growong>inong>g

open field crops on irrigated areas

or fillong>inong>g rice-fields with water. In

addition, the state reclamation pump

ong>inong>stallations received 7 million UAH

from budgetary funds to cover the

expenditures for electricity used for

water delivery 21 .

20

Staschuk V.A. Ecological and economic basis ong>ofong> water recourses basong>inong> management. – Dnipropetrovsk:

“Zoria” Publishers, 2006. – 480 pp.

21

Institutional ong>inong>surong>inong>g ong>ofong> ecologically balanced water use ong>inong> modern conditions: Monogragh / M.A.Khvesyk,

V.L.Golyan, O.V., Jarotska, N.V. Korjunova. – Donetsk:”Jugo-Vostok Ltd”, 2008. – 455 pp.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 15


million m.cubic

8000

7000

6000

5000

4000

3000

2000

1000

0

1980 1985 1990 1995 2000 2005 2010

years

Fig. 7. Dynamics ong>ofong> water use for irrigation and its share ong>inong> total water use ong>inong> Ukraong>inong>e 22 .

In 2007, 1131 million m3 ong>ofong> water was

spent on irrigation, which represents

5 times less than ong>inong> 1990 (Fig. 7).

The maong>inong> reasons for this are the

stagnation ong>ofong> agricultural production

ong>inong> areas ong>ofong> the Black Sea economic

region, low ong>inong>vestment capacity ong>ofong>

agricultural enterprises with respect to

the ong>inong>troduction ong>ofong> modern irrigation

equipment, as well as the ong>inong>capacity

ong>ofong> water users to pay for special

utilization ong>ofong> water resources for

irrigation.

IRRIGATION IN THE ODESSA DISTRICT

As to natural moisture, the territory ong>ofong>

the Odessa region lies ong>inong> unfavorable

for agricultural production climatic

conditions. The irrigation system ong>inong>

the area is developed.

There are 231.3 ha ong>ofong> reclamation

land, ong>ofong> which 226.8 thousand ha

ong>ofong> irrigated land, out ong>ofong> which 220

thousand ha ong>ofong> public networks

(Appendix 8). The length ong>ofong> irrigation

network is 5 370 km, ong>ofong> which large

maong>inong> canals and pipelong>inong>es, belongong>inong>g

to the Regional Water Department -

998.1 km. 8 684 hydraulic equipments

are placed on the irrigation network,

22

Accordong>inong>g to State Agency ong>ofong> Water Resources: http://www.scwm.gov.ua/

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 16


3 119 ong>ofong> which are state owned. 242

public pumps deliver water to the

system. The balance value ong>ofong> the

reclamation funds is 1 482.6 mil UAH.

In the pre-crisis period, ong>inong> the Odessa

region the gross share ong>ofong> irrigated

area ong>ofong> different crops was as follows:

20% ong>ofong> the cereals, 40% ong>ofong> the fodder,

80% ong>ofong> the vegetables, 100% ong>ofong> the

rice. At the same time the share ong>ofong>

irrigated land only amounted to

8.9%. Nowadays, with no additional

cost, it is possible to supply water for

irrigation ong>ofong> 140 - 150 thousand ha 23 .

In 2010, water withdrawal and

supply to water users was carried

out ong>inong> accordance with contractual

obligations. As a whole ong>inong> the nong>inong>e

districts ong>ofong> the region agreements

were signed with 212 water users for

68.1 hectares ong>ofong> irrigated area.

Before the begong>inong>nong>inong>g ong>ofong> irrigation

season there was water exchange

ong>ofong> 3.84 million m 3 ong>inong> reclamation

network, worth to the value ong>ofong> 303

thousand UAH, water reservoirs ong>ofong>

18.9 million m 3 were filled to the

value ong>ofong> 1.8 million UAH. Durong>inong>g the

irrigation season 71.2 million m 3 ong>ofong>

draong>inong>age water to the value ong>ofong> 1.4 mil.

UAH was pumped. In 2008 ong>inong> Odessa

region 63.8 million m 3 ong>ofong> water was

supplied for irrigation (2.3 mil.m 3 ),

ong>ofong> which 51.8 million m 3 (81% ong>ofong> the

regional volume) to the farms ong>inong> the

Danube Region (Fig. 8).

million m.cubic

140

120

100

80

Odessa oblast

Bolgrad rayon

Izmail rayon

Tatarbunary rayon

Reni rayon

Kilia rayon

60

40

20

0

2000 2003 2004 2005 2006 2007 2008

years

Fig. 8. Use ong>ofong> water for irrigation ong>inong> the Danube Region and the Odessa region

23

Accordong>inong>g to the ong>inong>formation ong>ofong> the Odessa Regional Water Management Department:

http://www.watermd.od.ua/ong>inong>dex.php?mod=pages&page=%20melioration_ukr

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 17


In the past three years, ong>inong> the Odessa

region more than 600 hectares

ong>ofong> trickle irrigation were put ong>inong>to

operation each year, currently 4 263

ha are covered by trickle irrigation.

The value ong>ofong> the service ong>ofong> delivery ong>ofong>

1m3 ong>ofong> water ong>inong> the Odessa region is

3.6 kopecks, and for the rice systems it

is 1.2 kopecks. The value ong>ofong> electricity

supply for 1m 3 ong>ofong> water from ong>inong>take

poong>inong>t is 7 kopecks.

What is needed ong>inong> the ong>inong>frastructure

ong>ofong> agriculture as one ong>ofong> the most

water-ong>inong>tensive ong>inong>dustries is

renovation and improvement ong>ofong>

existong>inong>g irrigation systems, brong>inong>gong>inong>g

irrigation to optimum ratio with other

reclamation measures, improvement

ong>ofong> soil properties and ong>inong>crease ong>ofong> their

fertility, use ong>ofong> advanced water-savong>inong>g

technologies and irrigation regimes,

preventong>inong>g floodong>inong>g ong>ofong> land.

In the fisheries sector, the maong>inong>

problem is to convert the fish ponds

ong>inong>to an effective barrier ecological

construction, by radical improvement

ong>ofong> technical condition on the ponds.

In light ong>ofong> the growong>inong>g environmental

crisis phenomena and the ong>inong>troduction

ong>ofong> energy power consumption limits

ong>inong> agriculture, there is a need to

improve irrigation regimes and

norms. The perspective is water savong>inong>g

and reduction ong>ofong> irrigation norms by

mong>inong>imization ong>ofong> evaporation, which

can be achieved by night irrigation,

underground and trickle irrigation,

reduction ong>ofong> the total volume ong>ofong>

irrigation.

ECONOMY OF WATER CONSUMPTION PRICE

The development ong>ofong> market relations

ong>inong> Ukraong>inong>e requires the establishment

ong>ofong> economic relations ong>inong> the field ong>ofong>

water use, which will take ong>inong>to account

the ong>inong>terests ong>ofong> the state, the owners/

managers ong>ofong> water resources, and the

ong>inong>dividual water users.

In order to development ong>ofong> fee-payong>inong>g

water usong>inong>g the followong>inong>g tasks have

to be solved: providong>inong>g economic

conditions for the development

ong>ofong> market relations ong>inong> the field ong>ofong>

natural resources use; development

ong>ofong> payment mechanism for the use ong>ofong>

water resources; raisong>inong>g a trust fund;

development ong>ofong> market mechanisms

for rational water use, takong>inong>g ong>inong>to

consideration environmental

requirements.

The payment for water use as natural

resource occupies a special place ong>inong>

the economic mechanism ong>ofong> water

management.

In Ukraong>inong>e, chargeable water use was

ong>inong>troduced ong>inong> the 1980s.

On the basis ong>ofong> new methodological

approaches to economic valuation ong>ofong>

water, the so-called “rental concept”

was developed ong>inong> 1992, on the basis

ong>ofong> which temporary tariffs on water

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 18


use for all water users were identified,

approved by the Cabong>inong>et ong>ofong> Mong>inong>isters

ong>ofong> Ukraong>inong>e (1994) upon presentation

by the Mong>inong>istry for Ecological Safety ong>ofong>

Ukraong>inong>e.

SPECIAL USE BY PRIMARY WATER USERS 24

The concept ong>ofong> payment for water use

is based on the prong>inong>ciples ong>ofong> ownership

ong>ofong> water resources ong>ofong> Ukraong>inong>e, the

Law “On Environmental Protection”,

and the Water Code ong>ofong> Ukraong>inong>e.

Accordong>inong>g to this concept the special

water use is any ong>ofong> the followong>inong>g types

ong>ofong> water use: withdrawal ong>ofong> water

with the use ong>ofong> facilities or technical

devices, discharge ong>ofong> sewage waters

and pollutants, use ong>ofong> water obtaong>inong>ed

from water bodies or from other

water users, and use ong>ofong> water without

its removal from water bodies for

hydropower engong>inong>eerong>inong>g, fishery

and water transport on the basis ong>ofong>

a permit issued ong>inong> the prescribed

manner (Fig. 9).

Special use is based on the licensong>inong>g

system and fees. The order, rules,

regulations and payments for

each kong>inong>d ong>ofong> special water use

are established by normative and

legislative acts on the state level and

depend on fong>inong>ancial, environmental

and social policy ong>ofong> the country.

Compliance with the break-even

policy and environmental security

ong>ofong> water use provides for the

organization ong>ofong> management process

ong>inong> accordance with the prong>inong>ciples ong>ofong>

sustaong>inong>able development to balance

the ong>inong>terests ong>ofong> all stakeholders:

busong>inong>ess, consumers and environment

agents.

The “special water use”, defong>inong>ed

by article 48 ong>ofong> the Water Code

ong>ofong> Ukraong>inong>e 25 , shall be subject to

mandatory environmental taxation

ong>inong> addition to payment for the direct

volume ong>ofong> water used. Accordong>inong>g to

the Tax Code ong>ofong> Ukraong>inong>e 26 , charges

for special use ong>ofong> water consist ong>ofong>: 1)

Fees for special water use from water

bodies, 2) environmental tax for the

direct discharge ong>ofong> pollutants ong>inong>to

water bodies.

24

With Maria Tarasova

25

Act ong>ofong> the Cabong>inong>et ong>ofong> Mong>inong>isters ong>ofong> Ukraong>inong>e “On charge rates for special water use” ong>ofong> 18.05.1999 №836.-

Site ong>ofong> Verhovna Rada “General Legislation”.-2010.- July,8.

http://zakon.rada.gov.ua/cgi-bong>inong>/laws/maong>inong>.cgi?nreg=836-99-%EF

26

Tax Code ong>ofong> Ukraong>inong>e: (e-resource)//Site ong>ofong> Mong>inong>istry ong>ofong> Fong>inong>ance ong>ofong> Ukraong>inong>e.-2010.-October,7.

http://www.mong>inong>fong>inong>.gov.ua/control/publish/ article/maong>inong>?art_id=85496&cat_id=71369

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 19


Water use

water use (water bodies use) ong>inong> order to satisfy the needs ong>ofong> the population, ong>inong>dustry,

agriculture, transport and other spheres ong>ofong> economy, ong>inong>cludong>inong>g the right for water

withdrawal, sewage discharge and other use ong>ofong> water (water bodies) (Cl.1 the Water

Code ong>ofong> Ukraong>inong>e)

General water use

Special water use

is exercised free ong>ofong> charge by the citizens

to satisfy their needs, without water bodies

beong>inong>g assigned to ong>inong>dividuals, and without

grantong>inong>g the relevant permits (Cl.47 the

Water Code ong>ofong> Ukraong>inong>e)

Is the water withdrawal from water bodies

with the help ong>ofong> constructions or technical

devices, water use and pollutants discharge

ong>inong>to water bodies, ong>inong>cludong>inong>g water withdrawal

and pollutants discharge with return waters

usong>inong>g canals (Cl.48, the Water Code ong>ofong>

Ukraong>inong>e)

Swimmong>inong>g;

Boatong>inong>g;

Amateur and sports fishong>inong>g;

Animals waterong>inong>g;

Water withdrawal from water

bodies without the help ong>ofong> any

constructions or devices, and

water withdrawal from wells

Withdrawal from the water body

Water withdrawal from water bodies

with the help ong>ofong> constructions or

devices

Environmental pollution by sewage

discharge;

Water transportation losses

Without withdrawal from the water

body

Water

supply

Waste

water

discharge

National economy use

Water use for hydropower

engong>inong>eerong>inong>g;

Water bodies use for water transport;

Fishery

Fig. 9. Structure ong>ofong> water use classification ong>inong> Ukraong>inong>e.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 20


The charge rates on water resources

special use are set by the Cabong>inong>et ong>ofong>

Mong>inong>isters ong>ofong> Ukraong>inong>e Resolution

836 ong>ofong> 18.05.99 “On the charge rates

for special use ong>ofong> water resources

and the payments for water use for

hydropower engong>inong>eerong>inong>g and water

transport” (Table 1). Despite the

correction process, these rates remaong>inong>

relevant.

Table 1. Charge rates on special use ong>ofong> water resources and surface water bodies (1999).

River basong>inong>s, ong>inong>cludong>inong>g all kong>inong>d ong>ofong>

tributaries

The Dnieper North ong>ofong> Kiev (the Pripiat

and the Desna), city ong>ofong> Kiev ong>inong>cluded

The Dniper South ong>ofong> Kiev

The Ingulets excluded

The Ingulets

The Severskiy Donets

The Jujniy Bug (without the Ingulets)

The Ingul

The Dniestr

The Wisla and West Bug

The Prut and Siret

The Tisa

The Danube

The rivers ong>ofong> Crimea

The rivers ong>ofong> Azov region


5,04

4,79

7,31

9,83

5,54

6,80

3,02

3,02

2,27

2,27

2,02

10,08

12,1

5,54

In total, ong>inong> Ukraong>inong>e there are 45

regions, accordong>inong>g to the charge rates

for water ong>inong>take. The ratio ong>ofong> the

lowest and the highest fee for 1 m 3 ong>ofong>

water ong>inong>take from surface sources is 1

to 32.

Accordong>inong>g to Section XVI ong>ofong> the Water

Code ong>ofong> Ukraong>inong>e “Charges for special

use ong>ofong> water” the list ong>ofong> water uses

subject to environmental charges,

ong>inong>cludes:

» The use ong>ofong> water takong>inong>g ong>inong>to

account its losses from the water

supply system by water withdrawal

(primary water users) and/or from

water withdrawal equipment ong>ofong> the

primary water users on the basis

ong>ofong> the charge rates (Table 1), the

actual volume ong>ofong> used water, and the

prescribed limits 27 ;

27

The limits ong>ofong> the special water use ong>ofong> water bodies with state importance are determong>inong>ed directly by the

State Agency ong>ofong> Water Resources, the limits for water bodies ong>ofong> local importance are determong>inong>ed by the

relevant local authorities (basong>inong> management admong>inong>istration). Accordong>inong>g to the data ong>ofong> the State Agency ong>ofong>

Water Resources the payments for special water use ong>inong> Ukraong>inong>e represent between 500 thousand and 1

billion UAH per year.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 21


» The charge rate is set accordong>inong>g to

“the prevalence ong>ofong> water resources,

their quality, reproduction capacity,

accessibility, comprehensiveness,

efficiency, location, possibility ong>ofong>

processong>inong>g and neutralization ong>ofong>

waste and other factors” and is

subject to differentiation based on:

whether the water body is a surface

or groundwater source; type ong>ofong>

water basong>inong> to which the surface

water body belongs; location ong>ofong> the

underground water body; type ong>ofong>

economic activity.

» A coefficient ong>ofong> 0.3 is applied to the

charges ong>ofong> housong>inong>g and communal

companies and a coefficient ong>ofong> 0.005

is applied to the charges ong>ofong> the

thermo-electric power stations.

» For special use ong>ofong> mong>inong>e, quarry and

draong>inong>age water the charge is set

accordong>inong>g to the actual volumes

ong>ofong> water and the charge rate (5.93

UAH/100m 3 ong>ofong> water). For water

ong>inong>cluded ong>inong> drong>inong>ks ong>inong>gredients the

charge is set accordong>inong>g to the volume

ong>ofong> water and the charge rates: 25.60

UAH/1 m 3 ong>ofong> surface water and

29.86 UAH/100 m 3 ong>ofong> underground

water.

» For the use ong>ofong> water without

withdrawal from water bodies for

hydropower engong>inong>eerong>inong>g the charge

is set accordong>inong>g to the standard

charge rate (5.24 UAH/10 000

m 3 ong>ofong> water for all rivers ong>inong> 2011),

the actual volume ong>ofong> water passed

through the turbong>inong>e, and limits on

water use.

» For water transport the charge is set

ong>inong> accordance with time ong>ofong> use ong>ofong>

surface water durong>inong>g the reportong>inong>g

period and the charge rates:

0.09 UAH/ton-km for cargo selfpropelled

and non-propelled fleet,

and 0.01 UAH/per person per night

ong>ofong> operation for passenger ships.

» For fish-breedong>inong>g the charge is

set accordong>inong>g to actual volumes

ong>ofong> water needed for replenishong>inong>g

ong>ofong> the ponds while breedong>inong>g fish

or other aquaculture ong>inong> the fish

farms (ong>inong>cludong>inong>g the volume ong>ofong>

water needed for filtration and

evaporation), and charge rates:

27.52 UAH/10 000 m 3 ong>ofong> water ong>inong>

case ong>ofong> operation ong>ofong> surface water

bodies, and 33.09 UAH/10 000 m 3

ong>inong> case ong>ofong> operation ong>ofong> groundwater

bodies.

These types ong>ofong> charges, except

losses ong>inong> water supply systems,

are considered general operatong>inong>g

costs, and are ong>inong>cluded ong>inong> the cost ong>ofong>

production, and ong>inong> the economically

grounded tariff for the provision ong>ofong>

piped water supply and sanitation

service. The owners ong>ofong> water supply

networks are charged for the water

loss.

Accordong>inong>g to the Water Code, the

charges for special water use from

water bodies ong>ofong> national and local

importance are allocated (Fig. 10).

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 22


Charges for surface waters use

for the needs ong>ofong> hydropower

engong>inong>eerong>inong>g, fishery and water

transport

100%

Charges for water use durong>inong>g

transportation

50%

80%

State budget

ong>ofong> Ukraong>inong>e

Charges for use ong>ofong> water

resources ong>ofong> public importance

Charges for use ong>ofong> water

resource s ong>ofong> local importance

100%

50%

20%

Regional

budgets

Budget ong>ofong>

Autonomous

Republic ong>ofong> Crimea

Allocation ong>ofong> the charges for the use ong>ofong> water resources ong>ofong> public

importance, situated on the territory ong>ofong> the Autonomous Republic ong>ofong> Crimea

Fig. 10. Allocation ong>ofong> the charges for the special use ong>ofong> water ong>inong> Ukraong>inong>e 28

Environmental taxes on the discharge

ong>ofong> pollutants directly ong>inong>to water bodies

are considered general operatong>inong>g

costs and are ong>inong>cluded ong>inong> the cost ong>ofong>

production. It is determong>inong>ed based on

the charge rates, the actual volume

ong>ofong> discharged pollutants, the fixed

discharge limits, and the correction

coefficient, determong>inong>ed on the location

ong>ofong> the source ong>ofong> contamong>inong>ation.

The tax rates for dischargong>inong>g

pollutants ong>inong>to water bodies (Table 2)

are set based on the type ong>ofong> pollutant

prevailong>inong>g ong>inong> the discharge.

The allocation ong>ofong> the tax for the

discharge ong>ofong> pollutants directly

ong>inong>to water bodies (up to 2011

“environmental pollution tax for

dischargong>inong>g waste waters”) is done ong>inong>

accordance with the provisions ong>ofong> the

environmental law (Fig. 11).

28

Tarasova M.L. Organisational and economic mechanism ong>ofong> water resources management ong>inong> Ukraong>inong>e –

doctoral thesis speciality 08.00.03 – Economy and national economy management, Doneck- 2011 – 255 pp.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 23


Table 2. Rates ong>ofong> the environmental tax for discharge ong>inong>to water bodies

Maong>inong> contamong>inong>ants

Ammonium Nitrogen

Organic substances

Suspended matters

Oil products

Nitrates

Nitrites

Sulphates

Phosephates

Chlorides

Rate UAH/t

52,5

21

1,5

309

4,5

258

1,5

42

1,5

WATER CHARGES FOR SECONDARY WATER USERS

The charges for special water use by

secondary water users is calculated

accordong>inong>g to an aggregate costs,

ong>inong>cludong>inong>g salaries, admong>inong>istrative

costs, monitorong>inong>g, etc. Thus ong>inong> each

area ong>inong> the Ukraong>inong>ian Danube region

the irrigation tax depends on the

number ong>ofong> pumpong>inong>g stations. The

most expensive water ong>inong> the area is

ong>inong> Tatarbunary and Kilia – up to 12

kopecks (Appendix 5).

However, the actual payment is not

for water, but for the electricity spent

on water pumpong>inong>g. Agricultural

producers (farmers) ong>inong> Ukraong>inong>e do

not actually pay for water (as a kong>inong>d

ong>ofong> special water use ong>inong> accordance

with the Law ong>ofong> Ukraong>inong>e “On

Environmental Protection”, № 1268-

XII ong>ofong> 26.06.1991, Article 38 29 ).

Moreover, the cost ong>ofong> water supply to

the field is beard by the state ong>inong> the

form ong>ofong> subsidies for the activities

ong>ofong> the regional water management

admong>inong>istrations.

In case ong>ofong> non-fulfillment ong>ofong> technical,

sanitary and environmental conditions

ong>ofong> use ong>ofong> water resources ong>ofong> Ukraong>inong>e

disciplong>inong>ary, admong>inong>istrative, civil,

and crimong>inong>al penalties are stipulated,

through economic penalties ong>inong>cludong>inong>g

full compensation ong>ofong> the economic

losses, caused by the ong>ofong>fender.

29

Art. 38. General and special use ong>ofong> natural resources: The use ong>ofong> natural resources ong>inong> Ukraong>inong>e is realized

accordong>inong>g to the rules ong>ofong> general and special use ong>ofong> natural resources. ...Accordong>inong>g to the rules ong>ofong> the

special use ong>ofong> natural resources the citizens, enterprises, admong>inong>istration and organizations can assume

possession, use or rent ong>ofong> nature resources on the basis ong>ofong> special permits registered accordong>inong>g to the

fixed rules for payment for the operation ong>ofong> manufacturong>inong>g or other activities and on preferential terms ong>inong> the

cases foreseen by the Ukraong>inong>ian law.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 24


Tax on discharge ong>ofong> pollutants directly ong>inong>to the water

bodies

100%

30% 70%

50%

20%

State budget ong>ofong>

Ukraong>inong>e

Budget ong>ofong> the

Autonomous

Republic Crimea

Budget ong>ofong> cities

Kiev and

Sevastopol

Regional

budgets

Local budgets

10% 10%

10%

Fig. 11. Structure ong>ofong> the environmental tax on the discharge ong>ofong> pollutants directly ong>inong>to

water bodies

FINANCIAL MECHANISM OF WATER USE AND WATER

RESOURCES PROTECTION

Fong>inong>ancial and economic state ong>ofong>

water management, conservation

and reproduction ong>ofong> water resources

is determong>inong>ed by the tariff, fiscal and

ong>inong>vestment policies ong>ofong> the state. The

maong>inong> sources ong>ofong> generation ong>ofong> funds,

to be used for the provision ong>ofong> water

supply and sewage outfall services and

fundong>inong>g ong>ofong> water protection programs

and activities are:

• Payments made by economic agents

for usong>inong>g centralized water supply

and sewage outfall services (UAH 77

688 mil. ong>inong> 2009)

• Rents for use ong>inong> ong>inong>dustrial quantities

ong>ofong> water from surface water bodies

(UAH 1.2 million.)

• Charges for special water use (UAH

708.97 mil.)

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 25


• Current costs ong>ofong> the busong>inong>ess on

nature protection, related to the

operation and maong>inong>tenance ong>ofong> nature

conservation ong>inong>struments (UAH 4

272.97 mil.);

• Investments ong>inong> fixed assets, with the

aim ong>ofong> buildong>inong>g and reconstruction

ong>ofong> environmental facilities, purchase

ong>ofong> equipment for environmental

activities: sewage water purification,

protection and remediation ong>ofong> soil,

groundwater and surface water

(UAH 1 712.71 mil)

• Taxes for pollution ong>ofong> environment

through sewage discharge (69.7 mil.)

• Penalties for admong>inong>istrative ong>ofong>fences

ong>inong> the field ong>ofong> water resources

protection (0.981 mil.)

• Payments for damages and losses

ong>inong>curred as a result ong>ofong> violations ong>ofong>

environmental laws ong>inong> the field ong>ofong>

water resources (UAH 4.14 million).

The maong>inong> sources ong>ofong> fong>inong>ancong>inong>g the

environmental protection costs, as ong>inong>

previous years, are the enterprises’

own funds coverong>inong>g respectively 76.5%

ong>ofong> capital ong>inong>vestment and 95.8% ong>ofong>

operatong>inong>g costs. The state and local

budgets covered 20.5% and 4.1%,

respectively. In 2009 UAH 54.06

mil from the development costs ong>ofong>

the State Budget ong>ofong> Ukraong>inong>e was

planned to be spent on protection and

reproduction ong>ofong> water resources, UAH

3 mil ong>ofong> which to be spent directly on

sewage waters purification.

A comparative analysis ong>ofong> the

structure (Table 3) ong>ofong> State Budget

ong>ofong> Ukraong>inong>e and the expenditures on

water protection measures ong>inong>dicates

improper use ong>ofong> nature conservation

funds.

Table 3. A comparative analysis ong>ofong> receipts from the use ong>ofong> water resources and public

expenditures on water protection measures

Receipts

Expenditures

Direction ong>ofong> Fong>inong>ancong>inong>g

Direction ong>ofong> Fong>inong>ancong>inong>g

Leasong>inong>g ong>ofong> ponds ong>inong> river basong>inong>s

Charges for special water use

Tax for pollutions by discharges

Total

UAH

mil

1,2

708,9

20,9

731,0

International cooperation

Applied scientific ong>inong>vestigations

Capacity buildong>inong>g

Monitorong>inong>g ong>ofong> nature resources condition

Purification ong>ofong> sewage water

Management and control

Establishment ong>ofong> national environmental

network

Total

UAH

mil

1,2

2,7

3,7

25,0

3,0

4,0

14,4

54,0

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 26


FINANCIAL MECHANISMS IN OTHER NATURE MANAGEMENT

SECTORS

In 2007, the taxes for special use ong>ofong>

forests amounted to UAH 173 million.

Forests reproduction ong>inong> 2007 was

executed on an area ong>ofong> 73.6 hectares,

ong>inong>cludong>inong>g 60 thousand hectares ong>ofong>

plantong>inong>g and seedong>inong>g and 13.6 hectares

ong>ofong> natural reproduction (to the total

amount ong>ofong> UAH 60 million accordong>inong>g

to estimations).

In 2007, the forestry enterprises ong>ofong> the

State Forestry Committee undertook

forest protection measures on an area

ong>ofong> 150.1 thousand hectares. Biological

methods ong>ofong> forest protection from

pests were applied on an area ong>ofong> 132.3

thousand ha (88%). Over UAH 2.3

mil was spent on forest protection

measures.

In 2007, payments for land ong>inong>to

Ukraong>inong>e’s budget were UAH 3.8

billion.

In 2007, the State budget ong>ofong> Ukraong>inong>e

provided fundong>inong>g ong>ofong> UAH 9.5 million

for land protection, ong>inong> fact the State

Committee for Land Conservation

fong>inong>anced activities for the total amount

ong>ofong> UAH 9.4 million.

The funds were used as follows: UAH

4 466.3 thousand on construction ong>ofong>

erosion–preventive facilities and UAH

1 855.7 thousand on land reclamation.

The Land Code ong>ofong> Ukraong>inong>e and the

Law on the Protection ong>ofong> land hold

the farmers responsible for soil

fertility restoration. Land restoration

is carried out ong>inong> other sectors ong>ofong> the

economy as well. Every year, the

companies ong>ofong> Gosugleprom (Coiladmong>inong>istration)

plan the works on

land resources protection, which are

grouped ong>inong> 15 directions. In 2007, a

total ong>ofong> 98 types ong>ofong> work were carried

out to the amount ong>ofong> UAH 39.4

million.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 27


WHAT IS NECESSARY TO BE DONE TO IMPROVE THE ECONOMIC

MECHANISMS OF NATURE MANAGEMENT?

Fiscal management ong>ofong> water use

today makes a start from the need to

strengthen the budget role ong>ofong> brong>inong>gong>inong>g

water resources ong>inong> the economic

turnover. The low percentage ong>ofong>

revenues for special use and use ong>ofong>

water for hydropower engong>inong>eerong>inong>g and

transport ong>inong> the budgets on different

levels requires reviewong>inong>g the charge

rates for special water use.

The practice ong>ofong> direct government

subsidies and subsidies for water

management has shown its

helplessness. Commercialization ong>ofong>

water component ong>ofong> the economy

is required, and the solution ong>ofong> this

problem depends on the efficient

operation ong>ofong> fong>inong>ancial ong>inong>stitutions ong>inong>

the water resources market. Takong>inong>g

this ong>inong>to account, national water

policy elements should be ong>inong>troduced,

which get fong>inong>ancial and credit

ong>inong>stitutions ong>inong>terested ong>inong> ong>inong>vestong>inong>g

resources ong>inong>to rational economic use

ong>ofong> water resources 30 .

Current tax system requires

improvements, which consist ong>ofong>

consistent enhancement ong>ofong> the role ong>ofong>

payments for water use, ong>inong>troduction

ong>ofong> taxes like excise taxes on products,

the use ong>ofong> which is associated with

damage caused to the water resource

potential. At the same time it is

necessary to extend tax facilities to

companies and organizations that

master high efficient technology, such

as closed and non-waste systems ong>ofong>

water use.

It is necessary to encourage the

busong>inong>esses not only to reimburse the

hazardous substances emissions,

wastewater discharges and excessive

use ong>ofong> natural resources, but to

provide a permanent limitation ong>ofong> the

negative impact on the environment

through the development ong>ofong>

environmental ong>inong>frastructure and the

use ong>ofong> the mechanisms ong>ofong> payment for

ecosystem services 31 .

The analysis ong>ofong> the present structure

ong>ofong> the bodies associated with the use

and protection ong>ofong> water resources,

their ong>inong>herent functions and the

scope ong>ofong> their activities leads to

the conclusion that the modern

organizational structure ong>ofong> water

management hong>inong>ders the ong>inong>troduction

ong>ofong> economic ong>inong>struments. Today, there

is no water body admong>inong>istration which

is capable ong>ofong> workong>inong>g on self-fong>inong>ancong>inong>g

30

Khvesyk M. GolYan V, Khvesyk J.M. Institutional environment ong>ofong> sustaong>inong>ed water use ong>inong> market relations

conditions: national and regional dimensions: Monograph. – NAS Publishers, 2005. – 280pp

31

Doroguntsov S.I., Khvesyk M.A., Golovynskiy I.L. Water resources ong>ofong> Ukraong>inong>e (problems ong>ofong> theory and

methodology): Monograph.-K.: Publishong>inong>g centre “Kyivsky Universytet”, 2002. – 227pp

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 28


asis. Its absence deprives the

price ong>ofong> water ong>ofong> its most important

function: to be a source ong>ofong> ong>inong>come for

the companies from which they can

reimburse expenditures and generate

prong>ofong>it.

Transfer ong>ofong> water charges ong>inong>to

the budget made it impossible to

accumulate fong>inong>ancial resources for the

reproduction processes, song>inong>ce it is not

associated to the ong>inong>vestments ong>inong> water

management, the payment has not

become a lever for its development,

nor it has become a steady source ong>ofong>

budget funds.

Also prong>inong>ciples ong>ofong> ong>inong>teraction between

basong>inong> management bodies and the

relevant subsections ong>ofong> the Mong>inong>istry

ong>ofong> Environment ong>ofong> Ukraong>inong>e and other

agencies remaong>inong> vague, and this

agaong>inong> creates the same regulatory

vacuum for targeted development

ong>ofong> appropriate water management

projects that will dramatically alter the

functional orientation ong>ofong> water use ong>inong>

general and ong>inong> its different sectors.

A great mass ong>ofong> water users

(agriculture, population), not covered

by the payment for water use,

remaong>inong>ed outside the scope ong>ofong> this

economic ong>inong>ducement.

The effective price has to reduce the

pressure on water resources. This is

especially true for agriculture. There is

no system ong>ofong> sound water tariffs based

on consumption volumes, the reason

for this partly consistong>inong>g ong>inong> the lack

ong>ofong> control ong>ofong> water ong>inong>take and poor

management ong>inong>formation system and

data collection system.

The elaboration ong>ofong> tariffs should be

a reasonable compromise between

different political goals, namely

takong>inong>g ong>inong>to account actual price for

the services, a cost-effective prices

criterion and social equity. This

requires ong>inong>telligent ong>inong>formation about

the real cost ong>ofong> water, the number ong>ofong>

services actually received by different

sectors, ong>inong>cludong>inong>g communal, the

condition ong>ofong> the ong>inong>frastructure and

necessary ong>inong>vestments 32 .

An important factor is also the lack ong>ofong>

water quality record ong>inong> the formation

ong>ofong> tariffs for end consumers. The

ong>inong>troduction ong>ofong> such a mechanism

would encourage measures to

improve water quality ong>ofong> the primary

consumers and water enterprises.

Besides, state water management

departments are monopolists

ong>inong> the market for water supply.

This situation can be remedied

if ong>inong>dependent bodies - special

commissions 33 - have the authority

to approve tariffs for housong>inong>g and

communal services for the city or

32

Management plan ong>ofong> the Ukraong>inong>ian part ong>ofong> the Lower Danube basong>inong>. Information and analytical report,

Program ong>ofong> neighborhood Romania-Ukraong>inong>e, project 2007/141-164 Development ong>ofong> cross-border

cooperation ong>inong> ong>inong>tegrated management ong>ofong> water resources ong>inong> Euroregion “Lower Danube”, 2009

33

http://zakon1.rada.gov.ua/cgi-bong>inong>/laws/maong>inong>.cgi?nreg=1682-14

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 29


egion, as the Law ong>ofong> Ukraong>inong>e “On

natural monopolies” has envisaged.

Natural water monopolists will

become public companies, which, ong>inong>

turn, will have to be legalized.

© Maxim Yakovlev, Danube Biosphere Reserve

Fauna ong>inong> the Danube Biosphere Reserve ong>inong>cludes 1,925 species.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 30


REQUIREMENTS FOR THE INTRODUCTION OF MECHANISMS OF

PAYMENTS FOR ECOSYSTEM:

• Introducong>inong>g ong>inong>to Ukraong>inong>ian

legislation the categories ong>ofong>

ecosystem services, payments

for ecosystem services (ong>PESong>) and

ong>inong>vestment ong>inong> ecosystem services;

• Developong>inong>g a mechanism for

economic and environmental

transfer associated with the

implementation ong>ofong> the prong>inong>ciple ong>ofong>

payment for ecosystem services;

• Endorsong>inong>g amendments to the Law

ong>ofong> Ukraong>inong>e “On Environmental

Protection” and the Budget and Tax

Code ong>ofong> Ukraong>inong>e on the reallocation

ong>ofong> the environmental charges/

taxes ong>inong> favor ong>ofong> enterprises

under programmes (projects)

implementong>inong>g ong>PESong>;

• Initiatong>inong>g the establishment ong>ofong>

agencies for ecosystem services as

part ong>ofong> the system ong>ofong> public-private

partnership.

Verkhovna Rada ong>ofong> Ukraong>inong>e registered

a draft Law ong>ofong> Ukraong>inong>e, which

envisages changong>inong>g the allocation

structure ong>ofong> the charges on the use

ong>ofong> natural resources. Begong>inong>nong>inong>g with

January 1, 2013, ong>inong> Ukraong>inong>e, 70%

ong>ofong> this charge will remaong>inong> at the

company 34 . With this aim ong>inong> view,

companies and organizations have

to develop plans for environmental

policy and environmental activities.

On the other hand, these 70% may be

a reserve for the implementation ong>ofong>

ong>PESong> ong>inong> Ukraong>inong>e.

The issues ong>ofong> the basong>inong> management

autonomy should be solved with

priorities to water management

and protection busong>inong>ess ong>inong> the

context ong>ofong> attractong>inong>g ong>inong>vestment

resources for the implementation ong>ofong>

promisong>inong>g ong>inong>novative projects and

the commercialization ong>ofong> public water

management sector.

34

Accordong>inong>g to ong>inong>formation from Tatiana Timochko, chairman ong>ofong> All-Ukraong>inong>ian ecological league,

25.10.20011

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 31


POTENTIAL ong>PESong> SCHEMES

Reedbed management

In the past, the reed was used by

paper production factory ong>ofong> Izmail but

after the collapse ong>ofong> the Soviet Union

the production was ceased and the

resource remaong>inong>ed unused. Today,

the reed is harvested and sold on

ong>inong>ternational markets to be used ong>inong>

construction and production ong>ofong> light

furniture (it is known that reed from

Ukraong>inong>e was used for makong>inong>g sunprotectong>inong>g

umbrellas ong>inong> Greece, for

Erosion control measures

Large part ong>ofong> the lands ong>inong> the Danube

area is plowed (on the place ong>ofong>

formerly naturally existong>inong>g steppes).

Maong>inong>ly cereals are cultivated and

practices are entirely ong>inong>tensive. The

quantities ong>ofong> fertilizers or pesticides

loads to the soil are not monitored

and there are no good agricultural

practices to ensure the balance.

Farmers use maong>inong>ly fertilizers because

the livestock breedong>inong>g ong>inong> the region

is ong>inong> declong>inong>e. This resulted ong>inong> high

pollution ong>ofong> underground water. For

this reason, accordong>inong>g to the experts

the quality ong>ofong> surface water is better

than the underground water.

Takong>inong>g all this ong>inong>to account a possible

ong>PESong> scheme is to harvest the reed

and use it both as manure and for

prevention ong>ofong> wong>inong>d erosion by the use

ong>ofong> reed mats (Appendix 2).

The second identified possibility

example).

There is a lot ong>ofong> reed ong>inong> the Danube

delta which should be reasonably

managed ong>inong> order to conserve the

sustaong>inong>able environmental status ong>ofong>

the wetlands. The implementation ong>ofong>

ong>PESong>-scheme ong>ofong> reedbed management

is proposed on the basis ong>ofong> the

Danube Biosphere Reserve (Ukraong>inong>e)

(Appendix 1).

ong>ofong> the decision ong>ofong> this problem are

restoration ong>ofong> old gardens with the

row-spacong>inong>gs sowed by a grass and

decrease ong>inong> level ong>ofong> use ong>ofong> pesticides

and fertilizers. In this case farmers

could pay to owners ong>ofong> a garden. Use

ong>ofong> ong>inong>volved with grasses pollong>inong>ators

ong>inong>volved with grasses can be

additional benefit (service) for farmers

and can potentially reduce the expense

ong>ofong> fertilizers.

The third potential possibility is

the bookmark ong>ofong> vong>inong>eyards - under

condition ong>ofong> their organic use.

Fourth option is the restoration ong>ofong>

steppe habitats but this would have

very low economic value.

Fifth option is the restoration and

creation ong>ofong> forest protection belts

(Appendix 2) – the issue is that

borders between plots are not private

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 32


property and then the payment

Water quality and water resources management

scheme would work very hard.

The free-ong>ofong>-charge use ong>ofong> water basong>inong>s

by aquaculture producers ong>inong> the area

is an ordong>inong>ary practice ong>inong> the Danube

river basong>inong>. The river basong>inong> has maong>inong>ly

lakes which are used for irrigation,

drong>inong>kong>inong>g and some ong>ofong> them for fishery

activities.

The aquaculture producers as a rule

pay neither for the special water

use nor for the maong>inong>taong>inong>ong>inong>g ong>ofong>

ong>inong>frastructure which regulates the

water regime. Their only ong>inong>put is

plantong>inong>g the basong>inong> with fish.

The fish catch consists not only ong>ofong> the

bred fish but also ong>ofong> Danube native

species. Song>inong>ce the most common

species are silver carp, grass carp,

carp, they overtake the place ong>ofong> the

other species. The are two more

issues: (1) nobody regulates how

much fish is caught – usually the catch

declared is much lower than the real

one; also, species that are not bred

are caught and sold but not declared

(2) water is polluted with the fertilizer

used by the fish farms but because ong>ofong>

corruption it is not possible to impose

penalties.

In addition, after beong>inong>g used ong>inong> the

Wetlands restoration and ecotourism

In order to restore wetlands ong>inong> the

Danube-adjacent region ong>ofong> Ukraong>inong>e

it is necessary to take the followong>inong>g

actions: to make detailed ong>inong>ventory ong>ofong>

lakes the polluted water is discharged

ong>inong> the Danube River, which is used

water supply by the cities ong>ofong> Kilia,

Izmail and Vilkovo.

In fact, the fish farms use the

ong>inong>frastructure and the resources

(such as water, the natural function

ong>ofong> the basong>inong> to produce fish feed) and

ong>inong>frastructure (gates) for free.

Solvong>inong>g these issues can be

achieved by usong>inong>g the experience ong>ofong>

ong>inong>ternational ong>inong>stitutions such as the

International Commission for the

Protection ong>ofong> the Danube (ICPDR). It

is necessary to connect the managers

with other similar busong>inong>esses ong>inong>

Europe to share their experience.

Measures are necessary to convong>inong>ce

the fish farms managers to pay for the

ecosystem services; to convong>inong>ce the

state representatives that measures

should be taken ong>inong> accordance with

the requirements ong>ofong> the EU Water

Framework Directive.

As a measure to compensate the

damage caused to the Danube

Biosphere Reserve it is necessary

to propose the buildong>inong>g ong>ofong> sturgeon

factory near Kiliya (Appendix 3).

flood-lands with further exclusion ong>ofong>

certaong>inong> zones from economic usage; to

develop strategy for implementation

ong>ofong> a complex plan for gradual

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 33


exclusion from use ong>ofong> degraded

agricultural lands and restoration ong>ofong>

wetlands; to develop and implement

mechanisms for excludong>inong>g parts

ong>ofong> wetlands from the agricultural

rotation ong>inong> view ong>ofong> future restoration

ong>ofong> the natural habitats ong>ofong> these areas;

to develop and implement a plan for

restorong>inong>g Danube flood-lands located

between Danube-adjacent lakes and

the river accordong>inong>g to the Program ong>ofong>

environmental network ong>ofong> Ukraong>inong>e; to

create the Green Corridor ong>ofong> the Lower

Danube takong>inong>g ong>inong>to consideration

anti-floods protection ong>ofong> territories;

to ong>inong>clude the Danube-adjacent

lakes and flood-lands to the Danube

Biosphere Reserve ong>ofong> the National

Academy ong>ofong> Sciences ong>ofong> Ukraong>inong>e; to

create trilateral biosphere reserve

ong>ofong> the Lower Danube ong>inong>cludong>inong>g the

respective territories ong>inong> Moldova and

Romania; to restore and ong>inong>crease

the area ong>ofong> riverong>inong>e forests, floodmeadows

and polders along the

Danube (Appendix 4).

Rehabilitation ong>ofong> the Sasyk estuary

can be realized by convertong>inong>g it ong>inong>to

its natural state ong>ofong> marong>inong>e estuary

through removong>inong>g the dam. The

aim ong>ofong> the project is to overcome

the adverse impact ong>ofong> convertong>inong>g

the Sasyk estuary ong>inong>to a fresh water

reservoir and to create environmental

conditions for sustaong>inong>able social and

economic development ong>ofong> the adjacent

areas. Activities withong>inong> the project

are to develop and realize the plan

ong>ofong> rehabilitation ong>ofong> the Sasyk estuary

through dam removal; to guarantee

the future environmental use ong>ofong> the

Sasyk estuary by ong>inong>cludong>inong>g the entire

estuary ong>inong> the Danube Biosphere

Reserve, to combong>inong>e environment

protectong>inong>g and recreational use ong>ofong> the

Sasyk estuary through construction

ong>ofong> a yacht port, to reconstruct the

Danube–Sasyk canal to be used for

rowong>inong>g; to develop ong>inong>frastructure for

environmental, rural, recreational,

historical, ethnical and sport tourism;

to ong>inong>crease the attractiveness ong>ofong> the

Sasyk coastal areas for recreation

construction which must take ong>inong>to

consideration the environmental

status ong>ofong> the estuary (Appendix 5).

The Danube region has a considerable

potential for ethnical, cultural,

rural and environmental tourism

development thanks to its outstandong>inong>g

natural resources, architecture,

applied art and origong>inong>al folklore. The

ong>PESong> can fong>inong>d the place ong>inong> tourism

projects too (Appendix 6).

Implementation ong>ofong> ong>PESong> schemes ong>inong> other regions ong>ofong> Ukraong>inong>e 35

Ukraong>inong>e, as a whole, is characterized

as low water-secured country. Local

busong>inong>esses, housong>inong>g and agriculture

already experience the problem.

Conversion ong>ofong> agriculture and forestry

to the new economic mechanisms

could work, but economic

opportunities are still not assessed.

35

with Nataliya Zakorchevnaya.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 34


CONCLUSIONS

Ukraong>inong>e has a well developed system

ong>ofong> charges for water resources use,

ong>inong>cludong>inong>g, direct charges for the water

resources withdrawal and a system

ong>ofong> tariffs for secondary water users.

Song>inong>ce 2011 an environmental tax on

discharges ong>ofong> pollutants ong>inong>to water

resources operates. There is also a

system ong>ofong> fong>inong>es.

Institutional ong>inong>activity, which

manifests itself ong>inong> the “conservation

ong>ofong> the Soviet admong>inong>istrative

system ong>ofong> water management, is

characterized by high monopolization,

unprong>ofong>itability, and therefore,

unattractiveness for foreign ong>inong>vestors

to develop the water economy sector

ong>ofong> Ukraong>inong>e.

Nowadays the payment for

A ong>PESong> mechanism to fight the water

pollution ong>ofong> Calmius River from

housong>inong>g outfall is under development.

The scheme will aim at creatong>inong>g forestprotectong>inong>g

strips along the river and

communication with citizens aimong>inong>g

at decreasong>inong>g the river pollution

(Appendix 7).

ecosystem services remaong>inong>s out ong>ofong>

a legal Ukraong>inong>ian field and ong>ofong>ficial

mechanisms ong>ofong> ecological economy,

but has ong>inong>terestong>inong>g prospects ong>ofong>

implementong>inong>g ong>inong> the Ukraong>inong>ian

conditions.

A serious barrier to the ong>inong>troduction

ong>ofong> payments for ecosystem services

is the fiscal and budgetary legislation

ong>ofong> Ukraong>inong>e. Legal mechanisms ong>ofong>

“horizontal” payments for the use ong>ofong>

ecosystem services are missong>inong>g.

However, the maong>inong> barrier to the

formation ong>ofong> a system ong>ofong> payments

for ecosystem services is the weak

willong>inong>gness ong>ofong> the consumers to pay

irrespective ong>ofong> their fong>inong>ancial situation

and organizational status.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 35


Appendix 1 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

MANAGEMENT OF REEDBED IN THE DANUBE DELTA REGION –

STENSOVSKO-ZHEBRIYANSKY FLOODPLAIN

Location: South ong>ofong> the Odessa

oblast, Kilia rayon (area)

Area – 9 700 hа

Background: The Danube delta has

unique geographical position and rich

natural resources. However much

further ong>inong>tensification ong>ofong> traditional

nature usong>inong>g (ong>inong>cludong>inong>g fishong>inong>g) leads

to the declong>inong>e ong>ofong> its economic and

ecological potential. Real alternatives

are needed. A good opportunity for

Ukraong>inong>ian part ong>ofong> the delta is the use

ong>ofong> the reed resources. Its greatest

supplies ong>inong> Europe are comong>inong>g from

the delta ong>ofong> the Danube. Already

today from the Ukraong>inong>ian Danube

delta about 800 thousand sheaves ong>ofong>

reed are exported ong>inong> a year. And that

makes about 6–8% ong>ofong> the European

market. More than thousand persons

are employed ong>inong> this economic sector.

Volumes ong>ofong> the harvested reed can

be trebled under condition ong>ofong> havong>inong>g

mong>inong>imum negative ong>inong>fluence on the

natural Danube ecosystems.

The maong>inong> measures: The primary

production ong>ofong> reed biomass on the

territory ong>ofong> the Danube Biosphere

Reserve accounts for about 900

thousand tons. That is, it is possible

to consider this resource almost

unlimited. In reality, necessity ong>ofong> the

Fig. 12. Danube Biosphere Reserve.

landscape mosaic maong>inong>tenance, reed

restorong>inong>g and regulation ong>ofong> the balance

ong>ofong> biogenesis substances demands

workong>inong>g out and implementong>inong>g ong>ofong>

effective system ong>ofong> reed management.

In particular, it concerns Stnensovsko-

Zhebrijansky floodplaong>inong>s.

The role ong>ofong> stakeholders: Now on

the territory ong>ofong> the Danube Biosphere

Reserve (DBR, Ukraong>inong>ian part ong>ofong> the

Danube Delta) the reed is harvested

© Danube Biosphere Reserve

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 36


on an area ong>ofong> 3.8 thousand hectares

located ong>inong> island territory ong>ofong> Belgorod

and ong>inong> Stensovsko-Zhebrijansky

floodplaong>inong>s. DBR together with Open

Company “Econg>ofong>orpost” carries out the

melioration actions ong>inong> Stensovsko-

Zhebrijansky floodplaong>inong>s, the channel

restoration, management ong>ofong> the

hydrological mode and the biogenic

component ong>ofong> ecosystem.

Benefits and expected results:

Cooperation ong>ofong> the Danube Biosphere

Reserve with Open Company

“Econg>ofong>orpost” on management ong>ofong>

Stensovsko-Zhebrijansky floodplaong>inong>s

can form a basis for ong>inong>troduction ong>ofong>

the ong>PESong> mechanism. Involvement

ong>ofong> an external ong>inong>vestor can provide

stability to the ecosystem services

(quality, quantity ong>ofong> reed) and also to

improve the environmental conditions

ong>ofong> the floodplaong>inong>s.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 37


Appendix 2 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

RESTORATION OF FOREST BELTS AND OTHER ANTI EROSION

ACTIONS IN REGION OF THE LOWER DANUBE

Location: South ong>ofong> the Odessa oblast (region), Kilia, Izmail, Reni rayons

(areas)

© Google Maps

Problem/background: Creation

ong>ofong> wood strips and other plantations

ong>inong> agricultural landscapes is a long

time known method ong>ofong> fight agaong>inong>st

soil erosion which is widely used ong>inong>

Ukraong>inong>e and ong>inong> the Danube Region.

Thanks to the creation ong>ofong> an extensive

network ong>ofong> wood strips on farmlands

ong>inong> Ukraong>inong>e it was possible to reduce

the impact ong>ofong> the phenomenon

known as “black” storms when strong

wong>inong>d worn out the dry top layer

ong>ofong> the soil. Forest belts are also a

place ong>ofong> dwellong>inong>g for many species.

Unfortunately, the cases ong>ofong> cuttong>inong>g

down ong>ofong> strips ong>ofong> woods have recently

expanded. Further destruction ong>ofong>

forest plantations especially ong>inong> a

steppe zone leads to simplification ong>ofong>

the structure ong>ofong> the agro landscape,

soil erosion and reduction ong>ofong>

biodiversity.

In territory ong>ofong> the Odessa oblast there

are 47.3 thousand hectares ong>ofong> forests,

70 % ong>ofong> which require reconstruction

estimated to UAH 14.2 mil. Barrier to

the forest restoration represents the

fact that the land does not belong to

farmers but to local village councils.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 38


In turn, the conversion ong>ofong> the land

from agricultural to forest category is

ong>inong>accessible to farmers.

The maong>inong> measures: The Izmail

Forestry is ready to carry

out restoration/plantong>inong>g ong>ofong>

forest belts. The plantation costs

(ong>inong>cludong>inong>g the seedlong>inong>g) account for

UAH 1.6 thousand per 200 square

meters. Simultaneously, on separate

sites, vong>inong>eyards can be planted with

anti erosion purposes (this has its

advantages regardless ong>ofong> the high

costs - up to UAH 80 thousand per

hectare). The use ong>ofong> reed mats for

soil protection ong>inong> the wong>inong>ter (ong>inong> the

conditions ong>ofong> snowless wong>inong>ter) also is

recommended.

The role ong>ofong> stakeholders:

Involvong>inong>g ong>ofong> farmers ong>inong> the process

ong>ofong> forest belts plantong>inong>g can be

connected to the realization ong>ofong> Kyoto

Protocol mechanisms and other green

ong>inong>vestments schemes.

Benefits and expected results:

usong>inong>g ong>ofong> alternative measures agaong>inong>st

erosion will allow keepong>inong>g the soil

fertility and will promote carbon

deposition.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 39


Appendix 3 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

RESTORATION OF RESOURCES IN THE UNIQUE AQUATICS OF

THE DANUBE RIVER AND THE NORTH-WESTERN PART OF THE

BLACK SEA

Location: The Danube Delta.

Problem/background: On the

basis ong>ofong> long-term research ong>inong> all

Black Sea basong>inong> 6 species ong>ofong> sturgeon

were observed: Russian sturgeon

(Acipenser gueldenstaedtii Brandt

& Ratzeburg, 1833). Starry sturgeon

(Acipenser stellatus Pallas, 1771),

Spong>inong>y sturgeon (Acipenser nudiventris

Lovetsky, 1828), Sterlet sturgeon

(Acipenser ruthenus Long>inong>naeus, 1758),

Sturgeon (Acipenser sturio Long>inong>naeus,

1758), Beluga (Huso huso Long>inong>naeus,

1758), Persian Sturgeon (Acipenser

persicus colchicus Marti, 1940).

Due to the river flow regulation, the

degradation ong>ofong> spawnong>inong>g grounds

and water pollution, the number ong>ofong>

all species ong>ofong> sturgeon has decreased.

Currently, all sturgeons are listed ong>inong>

the Red Book ong>ofong> Ukraong>inong>e. Accordong>inong>g

to the last data, the Spong>inong>y sturgeon is

considered to be extong>inong>ct ong>inong> the region.

Reducong>inong>g ong>ofong> the sturgeon abundance

ong>inong> the Black Sea basong>inong> led to the

release ong>ofong> the feed niche previously

occupied by these species. The

favorable habitat conditions, feedong>inong>g

and wong>inong>terong>inong>g areas ong>inong> the western

Black Sea can significantly ong>inong>crease

the scale ong>ofong> the artificial reproduction

ong>ofong> sturgeons and their mass

ong>inong>troduction to the Black Sea basong>inong>, ong>inong>

particular to the Danube Delta.

In order the artificial reproduction

ong>ofong> sturgeon and its ong>inong>troduction ong>inong>to

the Black Sea Basong>inong> to succeed, the

productivity ong>ofong> the Danube sturgeon

plant should not be less than 8.0

million units ong>ofong> young fish with

the potential resources to brong>inong>g its

capacity to 10.0 million units/year.

As a result ong>ofong> regulation ong>ofong> the

Danube River ong>inong> the Iron Gates most

ong>ofong> the spawnong>inong>g habitat ong>ofong> beluga,

which earlier rose to Vienna, was

lost. Sturgeons, ong>inong> particularly starry

sturgeon, are ong>inong> a more favorable

situation. The followong>inong>g ratio ong>ofong>

species is proposed for a sturgeon

plant on the Danube River: Starry

sturgeon - 40% - 3.2 million units;

sturgeon - 30% - 2.4 million units;

beluga -30% - 2.4 million units.

The maong>inong> measures

The decision to build the sturgeon

plant ong>inong> the area ong>ofong> Kilia is supported

by Department ong>ofong> Fisheries ong>ofong>

the Mong>inong>istry ong>ofong> Agrarian Policy ong>ofong>

Ukraong>inong>e.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 40


The project aim is to prevent the

negative impacts on the aquatic

resources and to reduce the

anthropogenic impact on the Danube

Delta and the North-Western part ong>ofong>

the Black Sea.

Objectives:

• Creation ong>ofong> facilities for artificial

breedong>inong>g, cultivation, ong>inong>troduction

ong>ofong> sturgeon and sea aquaculture;

• Application ong>ofong> European methods

ong>ofong> control and protection ong>ofong> aquatic

resources ong>inong> conditions ong>ofong> ong>inong>creasong>inong>g

anthropogenic load;

• Creation ong>ofong> a unified system ong>ofong> data

collection and data management

ong>inong> relation to the status ong>ofong> aquatic

resources ong>ofong> the Danube River and

the north-western Black Sea;

• Introduction ong>ofong> new technologies

ong>inong> aquaculture ong>inong> the frame ong>ofong> pilot

projects on restoration ong>ofong> unique

and valuable aquatic species.

The role ong>ofong> stakeholders and a

willong>inong>gness to pay

The compensation funds from the

negative effects ong>ofong> exploitation ong>ofong>

navigable channel “Danube-Black

Sea” to the Danube Delta Biosphere

Reserve can be the source ong>ofong>

ong>inong>vestment for the creation ong>ofong> the fish

plant. Until recently, these funds were

accumulated ong>inong> the accounts ong>ofong> the

City Council Vilkovo, but the funds

can be redirected!

Amount ong>ofong> fundong>inong>g - 2.5 million

euros.

Benefits and expected results

Restoration ong>ofong> the Danube and Black

Sea sturgeon populations and other

species ong>ofong> valuable aquatic resources;

the planned 8.0 million specimens, ong>inong>

condition ong>ofong> 1% ong>ofong> commercial return

can ensure the annual production ong>ofong>

1637 tons.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 41


Appendix 4 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

RENATURALIZATION OF POLDER IN THE AREA BETWEEN THE

LAKES KARTAL AND KUGURLUY

Location: South ong>ofong> the Odessa oblast, Kilia rayon (areas)

Area – 1300 ha

Fig. 13. Potential usage ong>ofong> the polder.

Background: In the years 1980-84

on the territory ong>ofong> the polder landreclamation

works were conducted

and an irrigation system with three

pumpong>inong>g stations was created. As a

result ong>ofong> ceasong>inong>g ong>ofong> the state grants,

irrigation has not taken place song>inong>ce

1994 and recently the evacuation

ong>ofong> the water from the draong>inong>age

cannels has stopped. Currently the

collective agricultural enterprises ong>ofong>

«Novosel’skoe» and «Sunrise» use the

polder territory maong>inong>ly for livestock

grazong>inong>g.

As a result ong>ofong> the ceasong>inong>g ong>ofong> the

operations and further destruction ong>ofong>

the hydrological management system

© Roman Sizo, WWF Danube-Carpathian Programme,

“Partners for Wetlands” project

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 42


the polder territory is ong>inong>tensively

flooded and overgrown by reed. Area

suitable for growong>inong>g ong>ofong> agricultural

crops declong>inong>ed to 10-15 % ong>ofong> the total

polder area.

The maong>inong> measures: The project

ong>ofong> renaturalization ong>ofong> the polder aims

at renewal or creation ong>ofong> a system ong>ofong>

possibly complete variety ong>ofong> floodplaong>inong>

biotopes. Good access ong>ofong> visitors to

the restored sites will be ensured

correspondong>inong>g to the conception ong>ofong>

controlled tourist activity; conditions

for seasonal livestock grazong>inong>g are

created on the flood meadows. The

basic types ong>ofong> plants which form the

floodplaong>inong> biotopes were conserved

on adjacent areas. In the case ong>ofong>

restoration ong>ofong> the periodic floodong>inong>g,

the restoration ong>ofong> the wetland will be

achieved by the formong>inong>g ong>ofong> floodplaong>inong>

biotopes with high biodiversity.

The role ong>ofong> stakeholders

Reference costs ong>ofong> the equipment

located on the channel ong>ofong> Skunda

represents 400 thousands ong>ofong> Euro.

About 250 thousand Euro is needed

for constrictong>inong>g ong>ofong> environmental

ong>inong>frastructure. Partly the project

is already realized withong>inong> a TACIS

project ong>inong> 1998-1999. However,

disagreement ong>ofong> stakeholders to

co-ordong>inong>ate restoration measures

appeared an ong>inong>surmountable barrier

to the completion ong>ofong> this project.

Thus, the project waits for completion

already more than 10 years.

Benefits and expected results

The realization ong>ofong> the project will

allow reconstruction ong>ofong> the water

regime ong>ofong> the environmentally

important area ong>ofong> flood land ong>ofong> the

Danube. Natural habitats will be

restored. Conditions for sustaong>inong>able

nature usong>inong>g, livestock grazong>inong>g,

equestrian tourism, sportong>inong>g fishong>inong>g

will be created.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 43


Appendix 5 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

RENATURALIZATION OF THE SASYK ESTUARY

Location: south ong>ofong> the Odessa oblast,

Tatarbunari and Kiliya areas.

This is one ong>ofong> the largest water bodies

ong>inong> the north-western part ong>ofong> the Black

Sea. Its southern part is adjacent to

the Zhebriyanskaia Gulf ong>ofong> the Black

Sea. The Estuary has a connection to

the Danube River through its artificial

canal.

Area - 210 km 2 , volume ong>ofong> water -

about 0.5 km 3 , depth to 3.2 m

Problem/background: The

transformation ong>ofong> Sasyk Estuary

environmental status is related to

the implementation ong>ofong> the project

for construction ong>ofong> the Danube-

Dniester (Dnieper) irrigation system

ong>inong> the 1980s. The project implied

desalong>inong>ation ong>ofong> marong>inong>e water ong>inong> Sasyk

Estuary by separatong>inong>g it from the

Black Sea with a 14 km long dam;

pumpong>inong>g and dischargong>inong>g the salt

water ong>inong>to the sea and fillong>inong>g the dam

with fresh water from the Danube

via the Danube – Sasyk canal. This

reservoir was supposed to irrigate the

lands ong>ofong> Tatarbunari and Saratsky

areas ong>ofong> the Odessa oblast on area ong>ofong>

29.2 thousand hectares (first phase)

and then on further 28 thousand

hectares (second phase).

The environmentally and

economically groundless creation ong>ofong>

Fig. 14. The Sasyk

the Danube-Dniester irrigation system

on the base ong>ofong> conversion ong>ofong> marong>inong>e

Sasyk Estuary to fresh water reservoir

caused negative environmental

transformation and caused severe

economic, environmental and social

problems and conflicts.

The negative changes ong>inong> the

environmental state ong>ofong> Sasyk Estuary

are the followong>inong>g: simplification ong>ofong> the

biological structure ong>ofong> the water body

– decrease ong>ofong> the number ong>ofong> species,

especially ong>ofong> valuable fish species;

© Richard Lisovskyi, Scientific Centre for Marong>inong>e Ecology ong>ofong> Ukraong>inong>e

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 44


development ong>ofong> eutrophication

(development ong>ofong> blue-green algae

that are quite dangerous to humans),

deterioration ong>ofong> fishery resources.

Furthermore the medicong>inong>al mud

ong>ofong> Sasyk Estuaty (as reservoir) was

damaged by the ong>inong>troduction ong>ofong>

significant amounts ong>ofong> hazardous

substances and compounds with

waters from the Canal Danube - Sasyk.

The negative economic consequences

ong>ofong> reorganization ong>ofong> Sasyk Estuary

are deterioration ong>ofong> recreation and

sanitary potential ong>ofong> the region,

water pollution, ong>inong>tensified abrasive

process durong>inong>g high water levels ong>ofong>

the reservoir, negative impact on

Stentsovsko Zhebriyanskie floodplaong>inong>s

ong>ofong> the Danube River (territory ong>ofong> the

Danube Delta Biosphere Reserve).

The maong>inong> measures

Renaturalization ong>ofong> the Sasyk

Estuary ong>inong>volves its restoration to

its natural state as marong>inong>e estuary. In

order to rehabilitate the Sasyk Estuary

cost-effective options for its “marong>inong>e”

use are ong>ofong>fered: conservation,

recreation and tourism, ong>inong>cludong>inong>g

sailong>inong>g, fishong>inong>g and transport (river -

sea port).

“Improvement ong>ofong> marong>inong>e ecosystem ong>ofong>

the Sasyk Estuary by the construction

ong>ofong> connectong>inong>g canal and rehabilitation

ong>ofong> adjacent territories”. Fong>inong>ances

were allocated to develop feasibility

study ong>ofong> destroyong>inong>g the dam. The

Cabong>inong>et ong>ofong> Mong>inong>isters by Decree №

757 from August 18, 2010, created an

Interdepartmental Commission on

expediency and consequences ong>ofong> the

elimong>inong>ation ong>ofong> the dam on the Sasyk

Estuary.

The project “Aladong>inong>” identified

potential sources ong>ofong> ong>inong>vestment to

build a tourist complex on Sasyk

Estuary.

The ong>inong>vestors ong>ofong> the Sasyk yacht club

and the buildong>inong>g ong>ofong> Sasyk Marong>inong>e

Trade Port (Russian State Property

Fund) can be the fong>inong>ancong>inong>g source for

the operations on the rehabilitation ong>ofong>

the estuary.

The costs for plannong>inong>g and

technical measures for the

rehabilitation ong>ofong> the Sasyk Estuary

by buildong>inong>g a connectong>inong>g canal are

approximately € 4-6 million.

The role ong>ofong> stakeholders and a

willong>inong>gness to pay

On August 10, 2009 the Odessa

Regional State Admong>inong>istration

and the Odessa Regional Council

adopted the order number 615/A-

2009 - 420/2009-PR, accordong>inong>g to

which a workong>inong>g group is created to

develop and implement the project

Fig. 15. The Sasyk Estuary marong>inong>a project.

© Andrey Skachek, Velymyr Zizak

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 45


Benefits and expected results

The floodong>inong>g areas will decrease; the

ecological state ong>ofong> the estuary will

improve which will answer the needs

ong>ofong> the local population (swimmong>inong>g,

fishong>inong>g ong>ofong> quality fish). As a result ong>ofong>

the project implementation the health

and environmental condition ong>ofong> the

villages and resorts will improve,

water security and quality ong>ofong> fishery

products will ong>inong>crease. The number ong>ofong>

tourists will ong>inong>crease. Conditions for

reformong>inong>g the irrigation system will

be created; the functions ong>ofong> natural

spawnong>inong>g ong>inong> the North-Western part

ong>ofong> the Black Sea will be resumed.

The example ong>ofong> renaturalization ong>ofong>

such a large natural object is unique

and it will help attractong>inong>g additional

ong>inong>vestments ong>inong> future.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 46


Appendix 6 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

BOGATAYA FARM

Location: the Odessa Oblast, the

Izmail area, village ong>ofong> Bogatoe

Area: 20 hectares

Problem/background: The

tourism potential ong>ofong> the Danube

region is represented with very

favorable climatic conditions and

valuable natural resources. Abundant

livong>inong>g resources such as huntong>inong>g

resources ong>ofong> birds and mammals, fish

ong>ofong> the Danube Lakes, mouth ong>ofong> the

Danube and coastal zone, medicong>inong>al

plants are very important for tourism.

Under normal circumstances it is very

difficult for tourists to get acquaong>inong>ted

with the natural wealth ong>ofong> the Danube

region. An option is the establishment

ong>ofong> environmental museum with

elements ong>ofong> zoological park, the

creation ong>ofong> “green pharmacy” which

would be represented by the medicong>inong>al

and rare plants ong>ofong> the Danube region.

The maong>inong> measures

Creation ong>ofong> a historical, cultural,

ecological and ethnic Tourist

Information Centre “Bogataya Farm”

ong>inong>volves the creation ong>ofong>:

• Landfill for growong>inong>g ong>ofong> local

medicong>inong>al plants (Green Pharmacy);

• Zoo with the local fauna;

The farmstead “Bogataya”

• Dendropark, which presents local

rare and endangered plants;

• Introduction ong>ofong> pheasants ong>inong> the

surroundong>inong>g lands.

The role ong>ofong> stakeholders and

willong>inong>gness to pay

Private entrepreneur Valentong>inong>e

Lavrenova and her partners are willong>inong>g

to ong>inong>vest their own and borrowed

funds ong>inong> the development ong>ofong> “Bogataya

Farm”.

Amount ong>ofong> fundong>inong>g - 150 thousand

euros.

Benefits and expected results

Private ong>inong>vestment ong>inong> new

environmental tourist destong>inong>ations

will be realized ong>inong> the frame ong>ofong>

development ong>ofong> the concept ong>ofong> rural

© Valentong>inong>a Lavrenova

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 47


tourism ong>inong> the Danube Region.

The pheasant will be reong>inong>troduced ong>inong>

the surroundong>inong>g lands.

Green tourism complex will be created

ong>inong>cludong>inong>g sports facilities, certified

eco-beach, trails for horseback

ridong>inong>g, pier, fish hatcheries, crayfish

hatcheries, frog farm, pheasant

farm, “the street ong>ofong> craftsmen” who

represent local crafts (handmade

textiles ong>ofong> wool, hemp, silk, yard for

the processong>inong>g ong>ofong> a reed; smithy;

traditional production ong>ofong> organic

food).

© Maxim Yakovlev, Danube Biosphere Reserve

Reedbeds – typical ong>ofong> the Danube Biosphere Reserve.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 48


Appendix 7 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

INTRODUCTION OF ong>PESong> MECHANISM IN THE KALMIUS

RIVER BASIN

Location: 4 regions ong>ofong> Donetskaya

oblast.

River Kalmius runs ong>inong>to Azov sea

Length – 209 km, area ong>ofong> the

basong>inong> – 5070 km 2

Background: The water ong>ofong> Kalmius

River is used ong>inong> the ong>inong>dustry and

agriculture. The basong>inong> takes more

than 60% ong>ofong> the waste water ong>ofong> the

ong>inong>dustry ong>ofong> the region (350 thousand

pollutants). Flow regulation by

dams leads to decrease ong>ofong> the water

exchange, creation ong>ofong> stagnant and

unhealthy zones, siltation ong>ofong> the river

beds and shallowong>inong>g ong>ofong> the rivers.

The high level ong>ofong> water pollutions

as a result ong>ofong> ong>inong>efficient operation ong>ofong>

most ong>ofong> the waste water treatment

equipments and water transfer

systems ong>ofong> the busong>inong>esses and the lack

ong>ofong> water protection bands along the

rivers ong>ofong> the basong>inong> lead to breakong>inong>g the

environmental law, namely ploughong>inong>g

the floodplaong>inong>s up to the river edges,

“wild construction development”,

© Anton Vorauer / WWF-Canon

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 49


illegal dumpong>inong>g, quarries for sand, etc.

The basic measures

Brong>inong>ong>inong>g order ong>inong> the coastal protective

zones, implementation ong>ofong> the forest

melioration, where it will have the

maximal impact to reduce the water

pollution ong>inong> Kalmius river basong>inong>.

Stakeholders’ role

The private enterprises havong>inong>g

ong>inong>dustrial activity ong>inong> immediate

proximity with the river beds beong>inong>g

also water polluters will take part

ong>inong> creation ong>ofong> the scheme. The ong>PESong>

scheme will be put ong>inong>to practice under

direct guidance ong>ofong> Severskiy Donets

River Basong>inong> Council.

Benefits and expected results

Improvement ong>ofong> quality ong>ofong> water ong>inong>

basong>inong> ong>ofong> Kalmius river by streamlong>inong>ong>inong>g

ong>ofong> economic activities and carryong>inong>g

out ong>ofong> forest ameliorative actions ong>inong>

coastal zones.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 50


Appendix 8 / POTENTIAL PROJECT FOR IMPLEMENTATION OF ong>PESong>

THE SCHEME OF IRRIGATING NETWORKS IN THE

ODESSA OBLAST

© Odessa Regional Water Management Department.

The scheme ong>ofong> irrigation networks ong>inong> the Odessa region.

WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 51


WWF 2012 - Payments for Ecosystem Services ong>inong> Ukraong>inong>е / page 52

© Michel Gunther / WWF-Canon


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