CAPITULO III: MATERIALES Y MÉTODOS
J. Características socio culturales
4.2. DISCUSIÓN
point source polluters that reduce emissions by more than they are required, or from non-point source polluters that adopt best management practices from an approved list. The list specifies measured and calculated credits. Measured cred- its are directly measurable, whereas calculated credits are based on a specified formula. Calculated credits will be subject to “uncertainty discounts” that reduce the value of the credit to account for variability in the effectiveness in particular activities. A provisional list of items includes a range of forestry activi- ties, e.g. buffer strips and filter strips.
Non-point sources are also subject to “Drainage Delivery Ratios”. These ratios seek to reflect the complex factors that affect the transmission of pollutant reductions to load reductions at the river mouth (e.g. uptake by vegetation, infiltration into groundwater, etc.). In addition “site-specific factors” are used to modify values to account for the level of diversion and reuse of water below the point of discharge. The aim to provide incentives for the most valuable activities in terms of pollution reduction to be taken up first.
Implementation of best management practices must be additional to any already required under existing regulations and be based on a plan drawn up by a qualified professional. Credits are only valid for sale if they represent meas- ured and verified reductions in pollutant emissions for a specified time period and have been transformed into signed “Reduction Credit Certificates”. All credits must be approved and registered.
Point source polluters regulated under the National Pollution Discharge Elimination System are likely to be the main source of demand, though credits can be purchased by anyone. Some permit holders will be permitted to trade with other permit holders or non-point source pollutants.
The proposal suggests that a private not-for-profit multi-stakeholder associa- tion, the “Idaho Clean Water Cooperative”, oversees trading. The Association will act as a clearing-house and be responsible for:
• receiving and registering non-point source “Reduction Credit Certificates” via Trade Notification Forms signed by both the seller and buyer;
• maintaining a central trade database;
• bringing buyers and sellers together – brokerage function; • preparing monthly watershed-wide trade summary; and • providing additional support to traders.
The private buyers and sellers retain significant responsibility for installing and maintaining non-point source reductions, monitoring their impacts and verify- ing these are correct. All these activities must be achieved prior to submitting a Reduction Credit Certificate to the Cooperative. All trades will be audited by the Environmental Protection Agency and the Idaho Department for Environmental Quality through the regular verification procedures for National Pollution Discharge Elimination System permits. Non-point source credits will be subject to on-site verification by the Soil Conservation Commission. Where credits are found to be false, the point source is liable.
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Of the two payment mechanisms not yet touched on, only retail-based trading has been tried in the USA under the Pacific Rivers Council’s Salmon Safe scheme. The lack of interest in retail-based markets contrasts with rapid expansion in this mechanism as a way of capturing willingness to pay for biodiversity protection. This may be partly accounted for by the local nature of watershed protection services and the limited market for labelled products. Nonetheless, the Salmon Safe scheme shows how a project may be broadened beyond a single watershed to tackle a regional problem, thereby expanding demand.
With respect to auctions, these are attracting increased interest, but have yet to be implemented. Box 24 above outlined how New South Wales envisages the use of auctions for allocating payments through its Environmental Service Investment Fund.
5.2.5 A preponderance of local markets
Watershed services are supplied at the watershed level. The size and location of a watershed will determine whether the trade is local, state-wide, provincial, national, regional or even international. Based on the cases reviewed, most markets that have emerged are local, often involving watersheds that supply urban or rural settlements (see Figure 20 below).
The preponderance of local markets is not surprising given the constraints associated with geographically dispersed markets. In larger catchments not only are hydrological linkages between upstream actions and downstream water impacts increasingly tenuous, but perceived links by beneficiaries and suppliers are less likely. Ultimately, unless downstream communities believe they gain from upstream watershed protection, they will not be willing to pay for supply. Furthermore, even where there exists a willingness to pay, where watersheds span political boundaries (e.g. national or even state borders), the risks involved may prevent payments emerging. Of the cases reviewed, only one proposes an international arrangement between Argentina and Bolivia.
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However, not all watershed service markets are tied to specific catchments. South Africa’s proposed Stream Flow Reduction Licensing system, for instance, aims to create a regional system for financing catchment management, while Colombia is implementing a national payment scheme. Retail-based markets, e.g. Salmon Safe products in the US Pacific Northwest, raise funds to improve regional watershed services and are not tied to a particular watershed.
5.2.6 Watershed markets are largely immature
Because markets for watershed protection are largely local affairs, numerous markets exist side-by-side. Using criteria set out in Section 2.4.1 (time since initiation, price discovery, market participation and sophistication in payment mechanisms) an attempt was made to classify individual market maturity. Figure 21 provides an overview of this assessment.
The majority of markets covered are classified as emerging or nascent, and proposed markets account for a quarter of cases. The most mature markets are concentrated in developed countries, with examples in the USA standing out.
5.2.7 Watershed markets strengthen non-market institutions
Markets for watershed protection services are closely intertwined with other local institutions, often complementing and reinforcing regulatory or cooperative systems for watershed management.Progress with water quality control initiatives in the USA, for instance, is often associated with the introduction of supporting trading and/or payment schemes (see Box 25 and Box 28). In New South Wales’ proposed salinity credit trading scheme (see Box 24), markets will play a key role in strengthening salinity regulations. In the developing world, markets provide essential finance for implementing watershed protection (e.g. China, Brazil, and Costa Rica).
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Markets also support cooperative arrangements that have come under strain due to diverging interests. As groups grow and become more heterogeneous, it is increasingly difficult to ensure individuals remain engaged. Cooperative arrangements have employed a range of schemes that permit those who gain most from watershed protection (e.g. irrigators) to compensate those that lose (e.g. landless). India’s long history of cooperative watershed management offers interesting examples of how benefit-sharing schemes may promote watershed protection (see Box 29).Box 29. India: nesting markets in cooperative watershed management India’s experience with participatory watershed management is extensive (Farrington et al, 1999; Hinchcliffe et al, 1999). Success stories are frequently held up to illustrate the potential for cooperative arrangements to outperform centralised, state-led approaches. Increased local ownership, improved access to local information on problems faced and reduced bureaucratic interference are a few of the benefits associated with a participatory approach.
While participatory watershed schemes are often grouped together, they are not all the same. In many cases cooperation is supported by sophisticated hierar- chical systems (e.g. Watershed Development Associations) that distribute responsibilities in an organised way. Market-based approaches also have a potentially valuable role to play in supporting coordination by offering: • a transparent and efficient way of managing participants’ interaction;
The success of payment mechanisms often depends on the strength of underlying social institutions. In Sukhomajri, India, over 20 years of experience with cooperation through a Water Users Association and Hill Resources Management Societies has underpinned new systems for sharing benefits from improved watershed protection.