Scope of Payment for Ecosystem Services Mechanism for ... - icimod

grasslands, cultivated areas, riparian areas and wetlands form groups of ecosystems.These are defined as the benefits obtained from the ecosystems within a watershed thatsupport downstream water users, including ecosystems (Smith et al., 2006).Watersheds provide a wide range of goods and services to both urban and ruralpopulation and play an important role in supporting urban life and development.Watersheds are also a source of economic goods that are vital to livelihoods andeconomies, and provide spaces for recreation and cultural heritage (PEDRR, 2011).Table 2.1: Key water-related services in a typical watershed1.Provisioning services• Freshwater supplyServices focused on directly supplying • Crop and fruit productionfood and• Livestock productionnon-food products from water flows • Fish production• Timber and building materials supply• Medicines2.Supporting servicesServices provided to support habitatsandecosystem functioning3.Cultural and amenity servicesServices related to recreation and humaninspiration4.Regulating servicesServices related to regulating flows orreducinghazards related to water flows• Hydroelectric power• Wildlife habitat• Flow regime required to maintaindownstream• Aquatic recreation• Landscape aesthetics•Cultural heritage and identity•Artistic and spiritual inspiration• Regulation of hydrological flows(buffer runoff,soil water infiltration, groundwaterrecharge,maintenance of base flows)• Natural hazard mitigation (e.g. floodprevention)(Source: Smith et al. 2006)Payment for Ecosystem Services or PES is a novel mechanism in which „providers‟ (orsellers)of environmental services are rewarded (paid) by consumers or beneficiaries ofthese environmental services. There is increasing interest in PES and incentive-basedmechanisms with growing demand of food drinking water and energy combined withpressure on natural resources in most parts of the world. The PES terminology is appliedto a wide range of very diverse situations and there is no single definition of PES. In an9