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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 of Commerce and Industry - Bulgaria Design concept: Boyan Petkov, Ina Kalcheva Printed at Geosoft EOOD Cover photo: ©Anton Vorauer / WWF-Canon © Text 2012 WWF Danube-Carpathian Programme All rights reserved This study was prepared as part of THE DANUBE PES 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 sustain the benefi ts that we all get from nature. The project is implemented by the WWF Danube-Carpathian Programme with the fi nancial support of the GEF through UNEP and the European Commission. WWF-DCPO Ottakringer Straße 114-116 1160 Vienna, Austria Phone: +43 1 524 54 70 Fax: +43 1 524 54 70-70 WWF-Bulgaria WWF-România Str. Ioan Caragea Vodă nr. 26A, 010537, sector 1, Bucureúti Phone: +359/2 950 50 40, +359/2 950 50 41 Tel: +40 21 317 49 96 Phone /fax: +359/2 981 66 40 Fax: +40 21 317 49 97 CONTENT INTRODUCTION 01 ACKNOWLEDGMENTS 02 WATER POLICY IN UKRAINE 03 INTEGRATED WATER RESOURCES MANAGEMENT IN UKRAINE 07 INTEGRATED WATER RESOURCE MANAGEMENT IN THE UKRAINIAN PART OF THE DANUBE RIVER BASIN 09 WATER USE IN UKRAINE 10 WATER USE IN THE ODESSA REGION 12 UKRAINIAN AGRICULTURAL POLICY AND WATER USE 13 IRRIGATION ON THE SCALE OF UKRAINE 15 IRRIGATION IN THE ODESSA DISTRICT 16 ECONOMY OF WATER CONSUMPTION PRICE 18 SPECIAL USE BY PRIMARY WATER USERS 19 WATER CHARGES FOR SECONDARY WATER USERS 24 FINANCIAL MECHANISM OF WATER USE AND WATER RESOURCES PROTECTION 25 FINANCIAL MECHANISMS IN OTHER NATURE MANAGEMENT SECTORS 27 WHAT IS NECESSARY TO BE DONE TO IMPROVE THE ECONOMIC MECHANISMS OF NATURE MANAGEMENT? 28 REQUIREMENTS FOR THE INTRODUCTION OF MECHANISMS OF PAYMENTS FOR ECOSYSTEM SERVICES 31 POTENTIAL PES SCHEMES 32 Reedbed management 32 Erosion control measures 32 Water quality and water resources management 33 Wetlands restoration and ecotourism 33 Implementation of PES schemes in other regions of Ukraine 34 CONCLUSIONS 35 Appendix 1: MANAGEMENT OF REEDBED IN THE DANUBE DELTA REGION – STENSOVSKO- ZHEBRIYANSKY FLOODPLAIN 36 Appendix 2: RESTORATION OF FOREST BELTS AND OTHER ANTI EROSION ACTIONS IN REGION OF THE LOWER DANUBE 38 Appendix 3: RESTORATION OF RESOURCES IN THE UNIQUE AQUATICS OF THE DANUBE RIVER AND THE NORTH-WESTERN PART OF THE BLACK SEA 40 Appendix 4: RENATURALIZATION OF POLDER IN THE AREA BETWEEN THE LAKES KARTAL AND KUGURLUY 42 Appendix 5: RENATURALIZATION OF THE SASYK ESTUARY 44 Appendix 6: BOGATAYA FARM 47 Appendix 7: INTRODUCTION OF PES MECHANISM IN THE KALMIUS RIVER BASIN 49 Appendix 8: THE SCHEME OF IRRIGATIN G NETWORKS IN THE ODESSA OBLAST 51 INTRODUCTION Recently, innovative fi nancing June 2006, examined the concept of mechanisms have been recognized payment for ecosystem services in as essentials for addressing terms of integrated water resources some of the identifi ed failures in management, and proposed to environmental management, in the United Nations Economic particular, Payments for Ecosystem Commission for Europe a Draft Services (PES). In a situation of high Code of Conduct on Payments for environmental concerns and limited Ecosystem Services in Integrated fi nancial resources, PES can generate Water Resources Management. additional alternative resources, allocate funds to environmentally “Ecosystem services” literary mean friendly management practices and the benefi ts that people get from sustainable production patterns, nature. According to the Millennium create incentives for investments, Ecosystem Assessment (2000), all and increase the involvement of benefi ts from nature are classifi ed into the private sector in environmental 4 groups of ecosystem services. These protection. include: The second meeting of the Working • Provisioning services, being the Group on Integrated Water Resources capacity of ecosystems to provide Management, held in Geneva in food, water supply, wood; © Maxim Yakovlev, Danube Biosphere Reserve Yakovlev, © Maxim The Danube Biosphere Reserve – the only place in Europe where land grows due to sediments. WWF 2012 - Payments for Ecosystem Services in Ukrainе / page 1 • Regulating services, being the Sustained Financing Schemes in the capacity of ecosystems to regulate Danube Basin”, which is implemented the climate, fl oods, diseases, wastes by WWF with the fi nancial support and quality of water; of UNEP through GEF. The report covers: • Cultural services - recreational, aesthetic and spiritual needs; • Analysis of water policy in Ukraine - implementation of integrated water • Supporting services, such as soil management in Ukraine and the formation, photosynthesis and Ukrainian Danube Basin; nutrients cycle. • Structure and dynamics of water The term “investments into ecosystem consumption, including irrigation; services” is used in the current analysis to describe the fi nancial and • Financial mechanisms related to technical investments into restoration, water protection and consumption; preservation, protection of ecosystems, which are important for • Measures necessary for the the provision of ecosystem services. introduction and improvement of economic mechanisms and The report was developed within implementation of PES; the project “Promoting Payments for Ecosystem Services and Related • Examples of potential PES 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, Valentina Lavrenova, Oleg Skaraev, Natalya Sekova, Valery Babchuk, Larisa Kupinens, Viktor Golubchenko, Natalya Zakorchevna. Special gratitude of the author to Maria Tarasova. WWF 2012 - Payments for Ecosystem Services in Ukrainе / page 2 WATER POLICY IN UKRAINE Ukraine belongs to European of appropriate water management countries with poor local water projects, which can dramatically alter resources, which are distributed very the functional orientation of the water unevenly. The water use effi ciency is use in general and in its different extremely low, and the water intensity sectors. of GDP (water consumed per unit of gross domestic product) is high The norms of the environmental law, enough 1. adopted by the Law of Ukraine “On Environmental Protection” 2 are The reform of the water management the basis of the legal relations in the system in Ukraine remains a major fi eld of water resources management subject for discussion by authorities and protection. The Water Code of and scientists. The practical Ukraine3, approved by the Resolution implementation of river basin of the Verkhovna Rada of Ukraine management based on integrity, on June 6, 1995, № 214/95-VR is interrelationship and consistency the basic document regulating the with economic development, has been legal relations in the fi eld of water under discussion for a long time. use. According to its provisions, the tasks of water legislation of Ukraine The issues of basin management are to regulate legal relationships autonomy related to the priorities in order to ensure the conservation, of carrying out water management science-based and rational water and protection business; attracting use for the needs of the society investments for the implementation and the economy, water resources of promising innovative projects; recharge, protection of water from commercialization of public areas of pollution, contamination and water management remain pending. depletion, prevention of harmful Principles of interaction between effects of water and mitigation of basin management administration their consequences, improving the and relevant subsections of the status of water bodies and protection Ministry of Environment of Ukraine of the water use rights of enterprises, and other agencies also remain institutions, organizations and vague, which again creates the same individuals 4. Ukraine has ratifi ed regulatory vacuum for development several international conventions, 1 Which is also explained by underestimation of GDP of Ukraine because of high rate of shadow economy – up to 40-60% (see http://ekonomist.kiev.ua/economics/tenevaya-ekonomika-ukrainy.html) 2 http://zakon1.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=1264-12 3 http://zakon1.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=213%2F95-%E2%F0 4 Ibid WWF 2012 - Payments for Ecosystem Services in Ukrainе / page 3 in particular, the Convention on and rules that prevent environment Transboundary Watercourses, deterioration as a result of negligent and declared intention to follow treatment, pollution or contamination the implementation of the Water of water bodies. It is implemented Framework Directive 2000/60/EC of by the local authorities which agree the European Union under the Action their management decisions with Plan “Ukraine - EU” approved by the the governmental agencies for Cabinet of Ministers of Ukraine № environmental protection, water 117 – p of 4/22/05 and number 36 - p resources monitoring, sanitary and of 2/12/05. epidemiologic security. Depending on the type of economic Water legislation ensures the agents participating in the water use implementation of a wide range of process, the volume of operation and measures for water protection from the environmental impacts on water pollution, depletion, prevention of resources, two major groups of water the harmful effects of water and use can be identifi ed: general water elimination
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