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VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN

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Attribution - Please cite the work as follows: “Rawlins, Maurice, Stefano Pagiola, Kashif Shaad, Mahbubul Alam, Rosimeiry Portela, Srabani Roy, Derek Vollmer and Werner Kornexl. 2020. ‘Valuing the Ecosystem Services provided by Forests in Pursat Basin, Cambodia.’ World Bank: Washington D.C.

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The team thanks Chloe Hill, Herbert Navasca, and Topi Carlos for editing services.

Cover photo: Aerial shots of a remote waterfall in the Cardamom Mountains © Conservation International/photo by David Emmett CONTENTS

LIST OF TABLES iv LIST OF FIGURES v ACRONYMS AND ABBREVIATIONS vi GLOSSARY OF KEY TERMS vii ACKNOWLEDGEMENTS viii EXECUTIVE SUMMARY 1

1 BACKGROUND & OVERVIEW 12 1.1 How are Forest Ecosystem Services Contributing to Cambodia’s Economy? 14 1.2 Valuing Cambodia’s Ecosystem Services is Relevant and Timely 16 1.3 About this Analytical Work and Report 18 1.4 Overall Methodological Approach to Valuing Ecosystem Services 20

2 HYDROLOGICAL ANALYSIS 24 2.1 Overview 24 2.2 Pursat River Basin 26 2.3 Key Hydrological Datasets 27 2.4 Dam Characteristics 29 2.5 Area Under Irrigation 30 2.6 Modeling Approach 31 2.7 Hydrological Modelling Results 34 2.8 Limitations of the Analysis 43 2.9 Summary of Key Results 44

3 MONETARY VALUATION OF HYDROLOGICAL SERVICES 45 3.1 Overview 45 3.2 Methodology 46 3.3 Results 50 3.4 Summary 51

4 CARBON VALUATION 53 4.1 Background 53 4.2 Estimating Carbon Stocks 54

5 TOURISM BENEFITS 57

6 RECOMMENDATIONS 62 iv VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA Box 1.2: Box 1.1: BOXES TABLES Table 4.3: Table 4.2: Table 4.1: Table 3.3: Table 3.2: Table 3.1: Table 2.4: Table 2.3: Table 2.2: Table 2.1: Table 1.1: 7 Appendix 5:Tourism andCarbonNPV Analysis Appendix 4:Forest Conversion for Agriculture andCharcoal, andForest Protection Estimates Monthly Discharge Appendix 3:Scatter Plot ofMonthly WYLDfrom Sub-basinsasDirectly Contributing to Appendix 2:SWAT Parameters Appendix 1:Data Requirements REFERENCES CONCLUSION Cambodia Sustainable Livelihood andEcotourism Project (CSLE) Drivers ofDegradation inProtected Areas Estimated CarbonEmissions from Deforestation inthePursat River Basin Carbon Stocks by Forest Type Land Cover inthePursat River Basin,2016 Effect ofLand Cover Change onValue ofHEP Key AssumptionsUsedinValuation ofHEP Value ofWater asanInputto Production inDifferent Farming Categories the Pursat River Basin ofMainProjectedSummary Hydrological ImpactsofLandUseChange in Target Irrigated Areas inthePursat River Basin Dam Characteristics Water Availability atBacTrakuon Station Large Hydropower Dams inCambodia 71 70 79 19 17 48 50 49 44 30 30 56 28 54 55 80 82 15 78 76 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA v 13 31 27 37 14 16 47 47 41 23 35 55 29 26 43 42 42 39 36 59 38 65 65 58 64 48 40 40 Forest Land Cover Change in Cambodia, 2006-2018 Change Land Cover Forest Natural, Produced and Human Capital in Cambodia, 1995 – 2014 and Human Capital in Produced Natural, Overlaps Between Freshwater Habitats and Forest Landscapes in Landscapes and Forest Habitats Freshwater Between Overlaps of Cambodia Areas Mountainous the East and West Schematic Diagram of the Sequence of Biophysical and Economic Valuation in Valuation and Economic Biophysical of of the Sequence Schematic Diagram Agriculture Irrigated Supply for of Water Example with an Illustrative SEEA EEA Context, Land Cover 2016 Map and Distribution 2016 Land Cover Comparison of ERA5 Estimates with Values Measured at Local Gauge at Local Measured with Values of ERA5 Estimates Comparison Comparing Monthly Discharge Statistics for Two Time Periods Two Statistics for Discharge Monthly Comparing Estimated Maximum Area Under Cultivation in the Pursat River Basin River Under Cultivation in the Pursat Area Maximum Estimated Data for Validation of Hydrological Model of Hydrological Validation for Data Results from Daily and Monthly Calibration and Validation Calibration and Monthly Daily from Results Average Water Yield Distribution over Sub-basins and Quarters Over a Year Over Sub-basins and Quarters over Distribution Yield Water Average Water Yield Distribution by Sub-basins Linked to the Dams and Tributary St Prey Khlong St Prey and Tributary the Dams to Linked Sub-basins Distribution by Yield Water Average Annual Sediment Yield for SWAT Sub-basins SWAT for Annual Sediment Yield Average Comparison of Current Hydrological Flows to those of No-forest Counterfactual those of No-forest to Flows Hydrological of Current Comparison Spatial Changes in Water Yield Under the No-forest Counterfactual Compared Compared Counterfactual the No-forest Under Yield in Water Spatial Changes Conditions Current to Comparison of Inflows and Outflows from Each Dam Operations Dam Operations from Each and Outflows of Inflows Comparison Counterfactual and Under the No-forest Conditions Under Current Effect of Dam Operation on Projected Water Availability, Selected Years Selected Availability, Water on Projected Operation of Dam Effect Comparison of Estimated Water Demand and Estimates of Water Available at Available of Water and Estimates Demand Water of Estimated Comparison Years Station, Selected Bac Trakuon Estimated Irrigation Water Demand Deficit Under Current Conditions Demand Deficit Under Current Irrigation Water Estimated Paddy Rice Production Data, by Season by Data, Production Rice Paddy Key Characteristics of Farming Systems of Farming Characteristics Key Methodological Process for Valuation of Hydrological Services Used for HEP Used for Services of Hydrological Valuation for Process Methodological Carbon Stocks for Major Forest Types in the Pursat Basin in the Pursat Types Major Forest for Carbon Stocks Projected Visitors to PAs in the upper Pursat River Basin River in the upper Pursat PAs to Visitors Projected Projected Increase in Tourism and Carbon Benefits from the CSLE Project and Carbon Benefits from in Tourism Increase Projected Areas of High water Yield within PAs in the Cardamom Mountains in the Cardamom within PAs Yield of High water Areas Precipitation is Projected to Increase in the Wet Season Over Cardamom Mountains Cardamom Season Over in the Wet Increase to is Projected Precipitation Precipitation is Projected to Decrease in the Dry Season with Climate Change in the Dry Season with Climate Decrease to is Projected Precipitation

Figure 1.1: Figure Figure 1.2: Figure Figure 1.3: Figure Figure 1.4: Figure Figure 2.1: Figure Figure 2.2: Figure Figure 2.3: Figure Figure 2.4: Figure Figure 2.5: Figure Figure 2.6: Figure Figure 2.7: Figure Figure 2.8: Figure Figure 2.9: Figure Figure 2.10: Figure Figure 2.11: Figure Figure 2.12: Figure Figure 2.13: Figure Figure 2.14: Figure Figure 2.15: Figure Figure 3.1: Figure Figure 3.2: Figure Figure 3.3: Figure Figure 4.1: Figure Figure 5.1: Figure Figure 5.2: Figure Figure 6.1: Figure Figure 6.2: Figure Figure 6.3: Figure FIGURES vi VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA NPASMP NDC NCA MUSLE MoWRAM MoE MME HRU HEP ha Hectares GHG FAO ERPA ECMWF CMTS ACRONYMS ANDABBREVIATIONS

Food andAgriculture Organization Management Plan National Protected Areas Strategy and Nationally Determined Contribution Natural CapitalAccounting Modified universal soil loss equation Meteorology ofWaterMinistry Resources and ofEnvironmentMinistry ofMinesandEnergy Ministry Hydrologic response units Hydroelectric power Greenhouse gas Emission Reduction Payment Agreement Weather Forecasts European Centre for Medium-Range Cardamom Mountains-Tonle Sap VSSPNP VCS tCO2e SWAT SVC SME SCS SEEA EEA RGC REDD+ PPU PA NTFP NSE

Tons ofcarbondioxide equivalent Soil andWater AssessmentTool Small andmediumenterprise Soil Conservation Service Veun Sai-SiemPang NationalPark Verified CarbonStandard Social valueofcarbon Accounts Accounting ExperimentalEcosystem System ofEnvironmental-Economic Royal Government ofCambodia and Forest Degradation Reduced Emissionsfrom Deforestation Percent prediction uncertainty Protected area Non-timber forest product Nash–Sutcliffe Efficiency VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA vii Biodiversity reflects the number, variety and variability of living organisms and how these and how and variability of living organisms variety the number, reflects Biodiversity benefits the basis of the multiple forms It another. to one location time from over change humans. to ecosystems by provided supply, pollination, water such as timber, ecosystems, from to people The benefits health and others. mental recreation, regulation, climate regulation, water action because an alternative received not that are of an action Benefits (costs) is undertaken. that are ecosystems of interacting of a cluster comprising land area A heterogeneous throughout. in a similar form repeated (e.g. plants, animals, air resources natural and non-renewable of renewable The stock to people. of benefits a flow yield to that combine soils, minerals) water, analysis, providing and economic resources natural integrates capital accounting Natural Natural such as GDP. measures than standard progress of development picture a broader to contribute resources natural how data showing a set of objective are capital accounts resources. natural affects the economy and how the economy the in modulating mitigation is the function of ecosystems or disaster regulation Hazard and in particularprotecting in and fires floods droughts, like events of extreme effects the impacts. from human well-being the quantity of regulate to the capacity of ecosystems to refers Sediment regulation benefits, like key and thus delivering network the stream sediment reaching eroded functions. quality and reservoir maintaining soil and water as categorized or usefulness of something – and is often The worth, importance human needs and values reflect and instrumental. Anthropocentric anthropocentric goal, use or need. a specific Instrumental values serve preferences. that can be defined as the ability of service regulation is an ecosystem flow Water the reducing storms, rain from water and store capture to and catchments watersheds are flows so that slowly more the water releasing well as peaks as runoff and flood direct the dry season. or through sustained into

Biodiversity Ecosystem services Ecosystem benefits Foregone (costs) Landscape Capital Natural Capital Natural Accounting hazard Natural regulation Sediment regulation Value flow Water regulation GLOSSARY OF KEY TERMS OF KEY GLOSSARY viii

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA Marie Lange andClaire Honore Hollweg. The World Bankteam appreciates theinputsprovided by World Bankpeerreviewers Raffaello Cervigni,Glenn- Alam, andDerek Vollmer. Conservation International team led by Srabani Roy and comprising ofRosimeiryPortela, Kashif Shaad,Mahbubul (Junior Professional Officer). Theanalysisandvaluationof hydrological benefitswas conducted bya team from at thetimeofdelivery includesStefano Pagiola (SeniorEnvironmental Economist) andElisabethSteinmayr Resource Management Specialist)andWerner Kornexl (SeniorNatural Resource Management Specialist)and The World Banktaskteam for Forest Services Valuation inCambodiaisled by Maurice Andres Rawlins (Natural Asia, provided strategic guidance. Economy for EastAsiaandthePacific; andMark Austin, Program Leader for Sustainable Development, SouthEast Practice Manager, andStephen LingActing Practice Manager for Environment andNatural Resources andBlue World Bankmanagement, includingIngunaDobraja, CountryManager for Cambodia;Christophe Crepin, previous Development andtheirdedicated teams forindatacollection theirsupport andtechnical guidance. Chann Sinath,UnderSecretary ofState MOWRAM, andExcellency Ponlok, ChairNationalCouncil Tin for Sustainable The World Bankteam would like to thankinparticular, Excellency SaoSopheap, SecretaryofState MoE, Excellency andConservationInternational. Energy (MME) of Water Resources andMeteorology ofMinesand Ministry (MOWRAM), ofEconomy(MEF), Ministry andFinance A World Bankteam carriedoutthiswork incooperation ofEnvironment Ministry withCambodia’sMinistry (MoE), Valuation ofEcosystem ServicesorWAVES) andtheformer Program onForest (PROFOR). multi-donor trustfund,Global Program onSustainability(GPS) (previously known asWealth Accounting and Sustainability andResilience inCambodiatechnical assistance Program. Thework wasfundedby aWorld Bank RGC. Thiswork ofthetechnical ispart assistance (TA) provided undertheBank’sEnhancingEnvironmental This reportistheoutputofrichdialogue andexchange withanumberofinstitutionsandindividualsinthe capital through strengtheningitslinksto theeconomy. Delta andintheupstream Mekong, theBankishelpingRGC to better manage andaddvalueto itsnatural managing itsnatural capital through landscapeapproaches. Working intheCardamom Mountains, theMekong Cambodia to provide guidance to theRGC through technical serviceson assistance andanalyticaladvisory country’s natural workofabroader capital.The advisory wasundertakenaspart effortoftheWorld Bankin product developed for theRoyal Government ofCambodia(RGC) tothesustainable management support ofthe The Valuing theEcosystem ServicesProvided by Forests inPursat Basin,CambodiaisaWorld Bankadvisory ACKNOWLEDGEMENTS VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 11 EXECUTIVE SUMMARY now Cambodia for Servicesrelevant is Ecosystem Valuing reduction regulation, erosion services, flow such as water Ecosystem Cambodia’s forests, by conservation provided that are and biodiversity heavily which depends Agriculture, underpin the country’s economy. retention reduction and nutrient regulation, erosion flow on water 2018 GDP in to contributed forests, by provided all of which are services about 18 which contributed and ecotourism, Tourism 22 percent. by on the country’s dependent is GDP, Cambodia’s 2018 towards percent also help to landscapes. Forests in forest biodiversity considerable the to source in Cambodia, an essential power sustain hydropower sectors. garment and other economic Waterfall in the Central Cardamoms. in the Central Waterfall Brunner by Jake International/photo © Conservation 2

VALUING THECAMBODIA ECOSYSTEMBASIN, PURSAT SERVICES IN PROVIDEDFORESTS BY BY FORESTSPROVIDED IN SERVICES PURSAT BASIN,ECOSYSTEM CAMBODIATHE VALUING valuation of ecosystem services isakey inputto The RGC isincreasingly recognizing thatadequate COVID-19. chains whichhave beennegatively affected by jobs andrural economies aswell astourism value sectors like ecotourism, asthey canhelp to stimulate socioeconomic shocksandare for important linked areas ofthecountry. Forests are asafety netduring more extensive flooding, intheeastern particularly change, withanadditional1.5monthsofdrought and flooding are expected to worsen because ofclimate water significantlybetween seasons.Drought and total water generated) isinsufficient to redistribute reservoir storage capacity(less than10percent of around 2.5million people lackingwater) and existing affected by droughts in2016, for example, with River BasinGroup (18outof25provinces were scarcity exists intheriver basinsoftheTonle Sap increased attention onforests. Seasonalwater climate change andtheonsetofCOVID-19 willput Cambodia’s impendingwater crisis,impacts of Landscape andEcotourism project. (CSLE) the World Bank-financed CambodiaSustainable in forest andprotected areas management through the RGC hasmade arecent significantinvestment and forest restoration where needed.Furthermore, and forest communities to prevent illegal activities timber forest products (NTFPs), patrolling by rangers timber harvesting,sustainable harvestingofnon- be subjectto stricter management thatincludesno trend inforest cover. UnderthePA system, forests will taken key steps to ensure thereversal ofthisdeclining forest resources underthePA system, theRGC, has and unsustainable natural resource use.Byputting has declinedsince 2006becauseofpressure for land (41 percent ofCambodia).Cambodia’s forest cover the country’s PA system whichcovers 7.4 millionha Approximately 67 percent ofthisforest area isunder cover about8.1 millionha(45percent ofthecountry). to better protect forest resources. Cambodia’sforests forestlands undertheprotected areas (PAs) system strategically placed themajorityofCambodia’s The Royal Government ofCambodia(RGC) has in Cambodia. in determining how forests are managed andfinanced Economic analysis hastherefore played alimited role making like PA zoningandmanagement planning. integrating thesedataandinformation into decision- the benefitsprovided by ecosystem services and Cambodia thatare essentialfor assessingandvaluing addressed. However, dataandcapacityare lackingin degradation andloss canalsobemore effectively protection efforts cultivated butdrivers offorest in PAs. Byutilizingsuchvalues,notonlyare strong conservation planningandprioritizationofareas advocate for theuseofecosystem servicevaluesin and Management Plan(NPASMP) 2017-2031 –strongly of 2008andtheNationalProtected Areas Strategy policy documentsonPAs –TheProtected Areas Law areas andwatershed management. MoE’s foremost toin decision-makingasitpertains forests, protected (MOWRAM) for integrating ecosystem servicevalues ofWaterand theMinistry Resources andMeteorology interest ofEnvironment amongtheMinistry (MoE) decision makingonmeaningful scale. There isstrong have prevented itfrom usingecosystem valuation for data, accepted methodologies andtechnical capacity and natural resources more generally; butthelack of improved decision-makingonprotected areas, forest the country’s climate anddisaster resilience. The forimportant Cambodia’seconomy aswell asfor forests inproviding ecosystem servicesthatare The studyprovides evidence oftheimportance of obtained iftheforest wasconverted to otheruses. compared to thebenefitsthat would be otherwise that are provided by aforest canbevalued andthen a practical illustration ofhow theecosystem services study presented inthisreport isintended to provide River BasinintheCardamom Mountains, thecase landscape approaches. By focusing onthePursat to theRGC onmanaging itsnatural capital through broader effort oftheWorld Bankto provide guidance This analytical workisbeingundertaken as part ofa through World Bankanalytical support decision-making onforest andPAs Meeting theRGC’s needfor values-driven VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 3 Source: Authors’ calculations Authors’ Source: 3 1.6 1.1 2.5 Annual (US$million/yr) Value of benefits Value Quantification of benefits of forest ecosystem ecosystem forest of benefits of Quantification on returns of the evidence provide which services, strengthening will gain by RGC that the investments use of public resources through ecosystems forest management. (PAs) areas and protected forest for conservation/ forest The causal link between has been flow water and regular degradation the analysis. established through scaling-up ecosystem for Recommendations provided valuation are assessment and services and actions report map within this as a road inform would this work how for proposed namely management PA and forest for investments in the and restoration conservation, protection Mountains. Cardamom 2. 3. 4. - 28 18 53 Net Present Value (US$million) Value Net Present KEY MESSAGE 1 almost million) are US$99 at (estimated forests intact from benefits The economic agriculture for small-scale cutting them down gains from times higher than the five million. at US$22 estimated production and charcoal Net present value estimates use a 6 percent discount rate. A value of US$5 t/ CO2e was used for the analysis of carbon. The The of carbon. the analysis was used for of US$5 t/ CO2e A value rate. discount use a 6 percent estimates value Net present report. 2, 3, 4 and 5 of the in Chapters these findings are underlying and calculations data for forest of benefits of value net present estimate was used to removed) were (if forests approach The counterfactual irrigation, HEP and tourism. storage carbon for irrigation, HEP, forests annual benefits of estimate was used to approach scenarios The deforestation and tourism. Beneficiaries Irrigation (HEP) Hydropower Tourism Carbon storage Methodology on how to undertake measurement undertake measurement to on how Methodology services that ecosystem and valuation of hydrologic in Cambodia. in other locations can be repeated for the underpinnings will also provide The work (PES) Services Ecosystem for (e.g. Payment tools Cambodia under the which will be developed (CSLE) and Ecotourism Livelihood Sustainable and PA in forest as investments as well project) and also under the CSLE project management capital accounting. natural 2. 3. Note: Note: 1. TABLE ES1: SUMMARY OF ESTIMATED BENEFITS PROVIDED BY FORESTS IN THE PURSAT RIVER BASIN BY FORESTS IN THE PURSAT BENEFITS PROVIDED OF ESTIMATED ES1: SUMMARY TABLE The standing forests in the Pursat River Basin (RB) provide benefits worth at least US$99 million through the the million through US$99 least benefits worth at (RB) provide Basin River the Pursat in forests The standing these forests tourism. Converting and regulation and sediment flow water like services of ecosystem provision few individuals, to only a worth million benefits about US$22 provide would and agriculture production charcoal for reach a would million and which worth about US$99 which are intact, forests whilst the benefits of maintaining the that Cambodia benefits more therefore, It is clear, be lost. segment of the Cambodian population, would broader just agriculture, Considering cutting them down. RB intact than from Pursat in the ecosystems forest keeping from irrigation for water to facilitate forests from maintaining benefits derived more are that there the findings show ES1. million); see Table (US$22 agriculture for the forests million) than cutting down (US$28 The main outputs of the study are: The main outputs of 1. results therefore intend to help the RGC quantify quantify help the RGC to intend therefore results to capital the value of its natural and communicate economy. Cambodia’s 4 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA COMPARED TO CURRENTCONDITIONS. WATER YIELDCOULDDECREASEBYMORETHAN30%IFFORESTWERENOT THERE.THISMAPWAS DERIVEDFROMTHENO-FORESTCOUNTERFACTUAL THE MAPILLUSTRATES THEIMPACT ONWATER YIELDINTHEPURSAT RIVERBASIN IFTHEFORESTSWERENOT THERE.THEREDAREASINDICATE THAT information, ofEnvironment can theMinistry (MoE) like ES1. February andJune;seeFigure Withthis deficit already being experienced indrierperiods, by 25percent, whichwould exacerbate thewater Without forests dryseason flows would be reduced and useofwater by downstream users. link between upstream forest management, water yield of theforest ecosystem asset. Thisstudymakes the investing resources into thesustainable management high monetary value creates astrong incentive for provided by forest ecosystems and understanding its Water flow regulation isoneofthe key benefits FIGURE ES1:CHANGESINWATER YIELDINTHEABSENCEOFFORESTS flows facilitated by forests. crisis, willrely to someextent onthehydrological hydropower plantsfunctioning,even duringthewater forest biodiversity ispreserved. Importantly, keeping lack ofwater andthattheecotourism potential of ensure thatagricultural growth isnotlimited by a recovery from COVID-19. ThiswillhelptheRGC to protecting forest resources ispart oftheeconomic Results also helpto illustrate thatinvesting in in watershed areas like thePursat Basin. expenditure onPA management for protecting forests better defend itsbudget requests andjustifyits Source: Authors’ creation

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 5

Dec

Nov

Oct

Sep

Aug No Forest

Jul

Jun May

Current

Apr

Mar

Feb Jan 0

900 800 700 600 500 400 300 200 100

x 10000 x (ton) input sediment Dam1 cover conditions, erosion is generally low. The few The few low. is generally erosion conditions, cover in parts of the are rates with high erosion areas conversion forest where Sanctuary, Wildlife Samkos in Figure as shown ES3 below. place, has taken Forest loss or degradation would reduce the benefits the benefits reduce would or degradation loss Forest degradation and/or Such loss provide. that they and erosion, flows peak river increase to tend would in the dry season availability water lower which would irrigation), for is particularly valuable (when water reservoirs, of siltation risk and increase flood increase would actual losses The life. their useful thus reducing loss. of forest and extent depend on the rate on peak a high impact has deforestation Upstream of water the flow slow floods. Forests and flows river the river). to event rainfall (from a watershed through run off faster, would water of forests, In the absence wet season and risk in the in higher flood resulting in in the dry season, as shown availability reduced panel). (left ES2 below figure

2010

Dec

Nov

Oct Sep

No Forest

Aug

Jul

Jun May

Investing in the maintenance maintenance in the Investing business. is good of forest public expenses Annual in the forest maintain to about are Basin the Pursat than the 20 times lower by them. benefits provided

Current

Apr

Mar

Feb Jan 0

50

150 100 300 250 200 Discharge (cumecs) Discharge FIGURE ES2: CHANGES IN WATER AND SEDIMENT FLOWS IN THE ABSENCE OF FORESTS AND SEDIMENT FLOWS FIGURE ES2: CHANGES IN WATER THE CHART ON THE LEFT SHOWS THE EFFECT OF REMOVING THE FOREST ON RIVER DISCHARGE AND THE CHART ON THE FOREST ON RIVER DISCHARGE AND THE CHART THE EFFECT OF REMOVING ON THE LEFT SHOWS THE CHART THE FOREST. OF ARISE BECAUSE OF REMOVAL THAT THE LARGE INCREASE IN SEDIMENT FLOWS THE RIGHT SHOWS Upstream deforestation has a high impact on on a high impact has deforestation Upstream of forests, sediment output. In the absence in as shown 30-fold, increase sedimentation would forest (right panel). Under current Figure ES2 above Source: Authors’ calculations Authors’ Source: The forests in the Pursat RB provide annual benefits annual RB provide in the Pursat The forests tourism, from million US$8.2 worth an estimated This is regulation. and sediment flow and water carbon spends million that the RGC about 20 times the US$0.4 This indicates in Pursat. protection annually on forest is an protection on spending on forest that the return budget. government’s efficient use of the KEY MESSAGE 2 KEY MESSAGE 6 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA MANY AREASOFFORESTHAVE BEENCONVERTED TO AGRICULTURE. THE ORANGEANDREDAREASAREINSAMKOS WILDLIFESANCTUARY, WHERE THE MAPSHOWS THEAVERAGE ANNUAL SEDIMENTYIELDINTHEPURSAT RIVERBASIN. Pursat Basinprotects thereservoir from thisfate, shown inTable ES2.The extensive forest cover inthe value ofelectricity production by US$18.2 million,as completely silted upin65years, reducing thepresent station atDam 1inthe Pursat River Basinwould be forests, thereservoir ofthehydroelectric power (HEP) reducing electricity production. Intheabsence of Deforestation would cause reservoir sedimentation, population in the lower ofthebasin would part face would alsoface highermaintenance costs. The by onlybeingable to irrigate smaller areas and risk from forest loss. Farmers would beworse off, These figures provide insightinto thevalues at TABLE ES2:IMPACT OFFORESTLOSSONHYDROELECTRICPOWER PRODUCTION Source: Authors’ creation FIGURE ES3:CURRENTSEDIMENTYIELDINTHEPURSAT RIVERBASIN Change inreservoir capacity (%) Reduction invalue ofHEP(US$million) Note: Present value ofreduction invalue ofHEPcomputed over 100years withadiscount rate of6percent. deforestation (0.25%/year) Current 0.8 23 the benefitsfrom protecting forest resources for HEP. increase to US$2.8 million.Theseresults demonstrate a year, asintherest ofthecountry, theloss would million. Should deforestation accelerate to 1percent the present value ofelectricity production by US$0.8 per year (below thenationalaverage) would reduce deforestation rates inthePursat Basinof0.25percent but notentirely -even thecurrent andrelatively low emissions ofGHGs. global community would suffer from increased to other, more expensive sources. And theentire face shortagesofelectricity orbeforced to switch increased flood risks.Electricity users would either High deforestation (1%/year) 2.8 61 counterfactual 100 (65years) No-forest t/ha/year SEDIMENT YIELD LEGEND 18.2 (10-25) (5-10) (2-5) (<2) VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 7 Source: Smith et al. 2013: 9 Source: the managers to payments schemes involve PES in exchange resources of land or other natural of specified ecosystem provision the for these deliver to (or actions anticipated services otherwise would what over-and-above services) of payment. the absence in be provided the beneficiaries of the made by are Payments individuals, example, in question, for services acting businesses or governments communities, on behalf of various parties. Cardamom forested lands act to slow down high down high slow act to lands forested Cardamom low and supplement during wet season discharges Key Recommendations of the Study Recommendations Key sets of two to lead in this report The results the for (i) policy recommendations recommendations: 1 and 2) and (ii) Basin (Recommendations River Pursat to aimed at scaling up the analysis recommendations 3). all of the country (Recommendation cover ultimately forest 1: Focus Recommendation efforts on and restoration protection in the Cardamom watersheds upstream Landscape Area Protected Mountains of water the resilience enhance to resources. With clear beneficiaries of services in the Pursat Pursat in the of services beneficiaries With clear to be devised could , a PES scheme identified Basin (farmers the beneficiaries from payments provide support help would that companies) and hydropower emission reduction Carbon conservation. upland forest Emissions from Reducing under Cambodia’s payments (REDD+) program Degradation and Forest Deforestation private international bring in financing from could of upland forest. the maintenance for sector , private , private 1 Funding for the the for Funding of those maintenance in the long forests be captured run can and private from sources. international See more on Conservation International at https://www.conservation.org/projects/cambodias-central-cardamom-protected-forest on Conservation International 1 See more KEY MESSAGE 3 KEY MESSAGE needed in the short are Although public resources of range a forests, of maintenance finance to term financing options private and international national support appropriate to scale to brought be can financing National private management. forest (NTFP) product non-timber forest options include local and companies program the Ibis Rice enterprises, CamAgra plantations like in sustainable investing financing private International Timber. and Grandis the like trust funds options include conservation trust fund Conservation International These benefits of forests are not included in in not included are forests of These benefits National policymakers accounts. national standard loss with forest concerned not been as often have to of forests been. Conversion might have as they be beneficial in to appear other uses will often will add to production as crop national accounts, not appear at all (carbon, either do losses them while that seem in ways or appear but biodiversity), (irrigation). loss forest to unrelated equity financing and private financing for carbon financing equity financing and private is an important This approach emission payments. and Cambodia has in conservation emerging trend alleviate to scale bring this to the opportunity to of more With the prospect public funding sources. funding other than reliance and longer-term stable more can provide this approach grants, on traditional impacts positive as more as well conservation effective carbon for and payments water PES for on livelihoods. Deforestation Emissions from under REDD+ (Reducing in being undertaken already are and Degradation) need a comprehensive Cambodia, but these now those opportunities fully. explore to approach 8 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA existing agricultural lands. Haltingforest degradation Action 2:Assess opportunitiesfor agroforestry on areas withinSamkos for interventions. sediment yield andhigh-water yield inprioritizing information thatMoE canuse suchasareas of high of degraded landscapes.Thisanalysisprovides conversion andshould includeaplanfor restoration best optionsfor reducing forest degradation and The PA management planningshould assessthe PA management demarcation. planningandboundary Samkos Wildlife asapriorityPA Sanctuary for zoning, taking astep inthisdirection through theinclusionof Biodiversity Conservation Corridors. MoE is already management plan inSamkos Wildlife Sanctuaryand Action 1:Prioritize zoning anddevelopment ofPA actions proposed for thegovernment as well. this recommendation there are also somestrategic restoration activities.Inthiscontext andunder for management andtheimplementation of that require attention, additional resources regards to prioritizingareas inthePA landscape The RGC has someimportant decisionsto make with renewed importanceinthislight. the basin.Protection ofupstream forestlands takes on magnifying theriskofextreme events like floods in hand, willreinforce theimpactofclimatictrends, Deforestation andforest degradation ontheother rates ofdegradation dueto agricultural encroachment. the Cardamom Mountains thathasexperienced high Mountains butare alsooverlapping withanarea of water yield are overlapping withPAs intheCardamom resource. Theresults showed areas thatimportant for afforestation would berecommended to protect this rate ofdeforestation andengage inoptionsfor downstream infrastructure. Measures to arrest the months, andincreased sedimentaccumulation in for irrigationinupstream areas duringwater -stressed of seasonalwater yield, higher consumption ofwater downstream. Theserisksinclude changes to thepattern operation ofirrigationandhydropower infrastructure 2.1),(see Figure possessesaquantifiable risk to the improving accessibility by access roads above Dam 1 in theSamKos Wildlife sanctuary, whichislinked to flows duringdryseason. Upstream deforestation of thewood lots. would bestrategic for investments andmanagement coconut husks.Again, thelinkto theprivate sector environmentally-friendly optionsfor charcoal like for charcoal; (iv)exploring for opportunities more and sustainable usezonesto meetwood needs small-scale woodlots withincommunity usezones into charcoal inacost-effective way; (iii)developing improve energyefficiencyofthefirewood conversion charcoal producing techniques andtechnologies to charcoal could bedeveloped; (ii)refining existing of wood through whichacertification system for plantations whocanprovide aconsistent source producers andlinkingthesewithprivate sector (i) formalization ofexisting small-scale charcoal towards more sustainable charcoal production are: key measures proposed actiononmoving for further help to reduce pressure onforests for wood. Four the wood to charcoal conversion efficiency could also supply needsfor thecharcoal andimproving industry existing plantations canhelpto address the wood- impacts onforests. Sourcing wood for charcoal from inorderthis industry to reduce itspotentially negative need to play akey role inleading theorganizationof worth aboutUS$177 millionperyear andtheRGC will done right.GERES(2015) to assessedtheindustry be foropportunity Cambodia’srural PA economies if charcoal. Thecharcoal canbeasignificant industry and environmentally friendly alternatives to wood including more sustainable charcoal production the pressure onforest resources from charcoal, Action 3:Develop interventions for reducing management plan. the assessmentshould alsobeincludedinthePA regulation. Theinterventions thatare decidedfrom forestimportant ecosystem serviceslike sediment to agriculture andrestoring trees thatprovide some additional valueonlandsthathave been converted Developingsupport. agroforestry isaway ofcreating recognizing thatforest communities needlivelihood that thisbeaddressed inamannerthatispro-poor, of forest change intheCardamoms, itisimportant management ofPAs. Asagriculture isakey driver and conversion isoneofthekey objectives ofMoE’s VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 9 Using the hydrological model developed for for model developed Using the hydrological in the identify the critical areas this analysis to be to were which, if they upper basin: the areas impact on in the greatest result would deforested, loads; and sediment flows hydrological to areas, assessment of these Undertaking a threat be actually deforested, to are they likely see how such as their suitability for based on factors quantifying and etc., roads, to proximity agriculture, converting of local people to benefits the potential other uses; to these areas forests retaining benefits that any Measuring example for communities, local for generate could and of NTFPs collection the sustainable through activities such as ecotourism; through protect to of a PES program Estimating the cost based on their size (number of these critical areas, needed the size of payments be protected), ha to conservation, based on the net forest induce to them of conserving communities local to costs to agriculture conversion benefits from (potential and forests), retaining benefits from minus local of the program, costs implementation the likely which is of monitoring, based primarily on the cost their be monitored, to the size of plots by affected and their accessibility; dispersion based on these whether the program, Determining less are costs the total (i.e. is feasible estimates, putting in place pay); willingness to than total service users from funding collect to arrangements and/or HEP producers farmers, (such as irrigated payments appropriate and make carbon buyers) who communities (upstream providers service to analysis conducted The deforesting). from refrain but map, a substantial start on this road provides be done. needs to much more clearly PES program that stopped all deforestation completely, completely, deforestation all that stopped PES program participants to of the payments both the costs including The program. of the implementation of and the costs farmers irrigated that on damages figure corresponding this add to would deforestation from suffer would carbon can be negotiated, amount, and, if an ERPA further. it even increase would payments program a PES Designing and implementing in the upper deforestation reduce to require: would Basin River Pursat 1. 2. 3. 4. 5. To be sure, much more needs to be done. The be done. needs to much more be sure, To for by this analysis, provided quantification of benefits an upper bound of willingness only provides example, the analysis example, For damages. avoid to pay to a year, of 1 percent rate that at a deforestation shows be about would HEP producers by suffered the losses is the maximum This figure million a year. US$0.17 a for pay be willing to would amount such producers The present study contributes to the development the development to contributes study The present First, documents it clearly ways. in several of PES it identifies Second, forests. by the benefits provided of beneficiaries of these important groups several and users) and electricity farmers (irrigated services if these face would that they quantifies the damages the hydrological Third, or reduced. lost were services that tools the analysis provides for model developed the areas efforts to PES conservation permit would be most effective. would they where PES and REDD+ are realistic opportunities in opportunities in realistic and REDD+ are PES to support financing private directing for Cambodia of the MoE interest is strong There management. PA helping to pilots in establishing PES with ongoing of PES in of PES. The success development inform has conservation for payments capturing private examples international several through been shown Rica. Payments Vietnam and Costa including Mexico, under the REDD+ sector private international from in Cambodia being received already mechanism are some excellent already are There scale-up. and could carbon resources on evaluating studies that exist to which can be useful when it comes (stocks), mechanisms and right benefit-sharing the developing system revenue an overall ensuring that these link to areas. that support protected Ecosystem service values can help inform help inform can values service Ecosystem but it will not, itself, by decision-makers, government In on the ground. actors facing incentives the change only a small subset receive RB, these actors the Pursat the bulk of the receive to benefits but stand of forest agriculture. such as alternatives benefits from Recommendation 2: Explore the potential the potential 2: Explore Recommendation PA to support financing private for management. 10 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA determined andintegrated inregular decision-making are: (i)standardizing how ecosystem servicevaluesare approach verses one-offeconomic valuation studies The advantages for Cambodia ofausingNCA approach. Accounting (NCA) across CambodiausingaNatural Capital benefits provided by forest ecosystems for scalingupassessmentsofeconomic Recommendation 3: Develop aroad map 4. 3. 2. 1. payments. Inaddition,we recommend theRGC to: ensure andincentivize more emissionsreduction basis for thelevels ofinvestment neededto holistically inthisstudyprovideskind ofanalysisundertaken a conservation compatible livelihood activitiesetc. The emissions through forest undertaking conservation, toopportunity provide payments from reducing carbon that isbeingestablishedcurrently provides the national REDD+strategy andREDD+nestingframework framework for emissionsreduction payments. The government for strengtheningtheinstitutional scheme to beapart ofongoing plans withinthe Lastly, itwould beimportant for any PES orREDD+ way to beefficientandeffective. needed to bemanaged andusedinanintegrative revenues andprivate conservation fundsthat National Forest Development Fund, ecotourism and SocialFund,theForestry Administration number offundsources includingtheEnvironment work for theGreening Prey Langproject identifieda considered for PA supporting management. Recent PAs. Revenues from tourism inPAs should alsobe integrated into theoverall financing mechanism for Ensure thatPES andREDD+payments are well and regulation for thesystem. Cambodia for REDD +payments withclear rules Enhance andpromote theattractiveness of management, including co-management, etc. for forest conservation andprotected area mechanism thatwillmake clear investments payments that includesabenefitsharing Set upthenationalsystem for emissionsreduction (Prakas), whichisbeingdeveloped. in theREDD+Regulatory Framework REDD+ activitiesasisbeingproposed Provide oversight andmanagement of 3. 2. 1. approach requires aroad mapthatincludes: Moving from asingle case study to acomprehensive data sharingfrom relevant ministries. a robust datacollection planandearlycommitment on beneficiaries withecosystem services; (ii)importanceof (i) needfor athorough analysis oftheinteractions of for replication andscalingup. Lessonsincludethe: to helpdesignthemandelucidates somekey lessons NCA bothto identifytheneedfor interventions and demonstrates thepotential benefitsofundertaking under anNCAapproach. TheanalysisofthePursat Basin data collection, analysisand access are standardized and information willbemore reliable andless costly if allocation for MoE for PA management; and(ii)thatdata of theRGC, for example indetermining nationalbudget risk from degradation andforest loss; watersheds assessments may include:areas thatare mostat ecosystem service accounting-compatible Basin. Criteria for prioritizingareas for undertaking are clear beneficiaries,asinthecaseofPursat focus onrepresentative watersheds where there boundaries. Aphasedapproach could initially in timebeextended to thecountry’snational towards amore encompassing exercise thatwould as thoseinthecurrent report -andevolving with asmallsetofkey ecosystem services-such basin-specific accounting-compatible assessments Considering aphased approach with , starting related work onecosystem valuation; and World Wildlife whocurrently do Fund(WWF) International, Flora andFauna International (FFI) NGOs andDevelopment Partners like Conservation ofEnvironment and(iii) Department(s) (PDoE); (ii) attheprovincial level, includingProvincial ofEconomy (MEF); (MoI), Ministry andFinance ofInterior Ministry (MAFF), Forestry andFisheries Development ofAgriculture, (MRD),Ministry and Meteorology (MOWRAM), ofRural Ministry level, ofWater suchasMoE, Ministry Resources partners thatshould be engaged (i)attheministry Identifying andinforming key institutional technical resources andcapacityrequired for NCA; availability/needs, institutionalframework, financial, information;critically important and(ii)data for whichtheimplementation ofNCAcould provide policies, decision-makingandplanningprocesses Conducting a‘scoping’ exercise thatidentifies(i) VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 11 As changes in soil erosion and sediment and in soil erosion As changes by affected significantly are accumulation it is costs, in large and can result change forest of suspended that monitoring recommended of the site at least at sediment and bed load, dams or at the main gauging station the future plots experimental Additionally, be undertaken. be helpful in could rates soil erosion monitor to projections. soil loss verifying variability in the mountainous region Rainfall be needs to monitoring is high. Weather to estimates accurate derive to strengthened This will become available. resources water especially important patterns as precipitation A more shift with a changing climate. to continue is needed. gauges of rainfall network extensive but an important role, plays often Groundwater available less even are data on groundwater groundwater Improved water. surface than for better is needed to mapping and monitoring The first that it plays. the role understand map be to of this should essential step identifying by followed the major aquifers, time. and travel areas important recharge protection risk incomplete Without this, we limiting our are as we areas, source water for based on visible of the rivers region source water. river the to contributing slope terrain assessment to include watersheds that feed into into that feed watersheds include to assessment where and Kbal Chay Mt. and Kulen Sap the Tonle PES projects; pilot is pursuing the government most certainly map would and road The scoping on monitoring enhancement highlight the need for and similar assessments of data for and generation efforts: accounting for ultimately a. b. c. flood reduction – for disaster forest The benefits of also would – prevention fire mitigation and forest in subsequent analysis. capture be important to would damages and fire drought on the flood, Data the benefits provided determining be important for risk reduction; of disaster in terms forest by be important would benefits that Additional domestic used for water include: capture to services ecosystem purposes; recreational for be considered should ecotourism from this is significant; non-timber where areas and charcoal. (NTFPs); products forest

5. 6. 7. Cambodia has invested significantly in Cambodia has invested as River, plants on the Mekong hydropower Ensuring Mountains. in the Cardamom well capacity of operation maximum to a close plants will be important these hydropower security in Cambodia especially in energy for forest the dry season, which means protecting of this dam. upstream that are watersheds can support services of hydrological Valuation provide to companies hydropower schemes for that can assist with the management finance critical water that provide resources of forest for the regulation regulation and sediment flow plants. of hydropower operation service, as an ecosystem Carbon storage, well- are analyze, as there to is strategic doing for established methodologies establishes a this. The carbon market regulating for accounts which often price no (which have services ecosystem to value) and difficult are and/or market carbon storage. that facilitate biodiversity is a priority of in PAs development Ecotourism in sector tourism the overall boost to the RGC income of jobs and value added, provide terms and generate communities and forest rural for management. that can help with PA resources Cambodia is experiencing a serious water Cambodia is experiencing be exacerbated to which is expected shortage, important that It is therefore change. climate by strengthen and MOWRAM, MoE through the RGC, the like of important watersheds management Mountains and Kulen Mountains Cardamom and resources forest of existing with protection important watershed of degraded restoration services, ecosystem Analysis of hydrological areas. for will be instructive this study, as undertaken for management. watershed for prioritizing areas

c. d. initial consideration recommend would We undertaking such priorities for geographic for important for hydropower and irrigation, water water and irrigation, hydropower important for Additional sediment regulation. and production considered be that should services ecosystem focusregulation with a particular flow include water benefits of Estimation of economic on drought. services ecosystem and tourism carbon hydrological, reasons: the following be prioritized for should a. b. 4. 12 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 1 development andplanning. changes and trade-offs, leading to more informed andsustainable economic forimportant decision-making, asitenables abetter understanding of these benefits,bothinbiophysical andmonetary terms, istherefore critically climate change canexacerbate theseeffects. Assessingthemagnitude of of theseecosystems to continuously provide theseecosystem and services likelihood offlooding. Unsustainable landusecandrastically alter theability and reservoirs, maintaining minimumflows intheriver and reducing the of supply-satisfyingirrigationwater demand, recharging storage tanks reducing theircapacity;andwater-regulating services affecting thetiming too muchsoilerosion from filling reservoirs andotherirrigation works and including freshwater-related services suchassedimentregulation, preventing Terrestrial ecosystems suchasforests provide ecosystem, important services BACKGROUND &OVERVIEW © Conservation International/photo bySokhornKheng The Chambokwater fall atKirirom NationalPark VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 13 2016 2014 for land and unsustainable use of natural resources resources use of natural land and unsustainable for and is pervasive degradation Forest (Figure 1.1). salvage practices, logging unsustainable to attributed has Land expansion extraction. and fuelwood logging crops land for with cultivated been a major factor, 2002 and 2012, between 50 percent by increasing 2015). Trends (Forest of forests partly at the expense of fuelwood 5.5 million tons In addition, approximately and small and households by used each year are of the with 88 percent (SMEs), medium enterprises biomass for traditional on population still relying forests system, PA Under the (GERES 2015). cooking that includes management stricter will be subject to of non- harvesting sustainable no timber harvesting, rangers by patrolling (NTFPs), products timber forest activities illegal prevent to communities and forest needed. where restoration and forest 2010 2006 Source: MoE 2018 Source:

45% 40% 55% 50% 65% 60% FOREST COVER ( PERCENT) ( COVER FOREST FIGURE 1.1: FOREST LAND COVER CHANGE IN CAMBODIA, 2006-2018 CHANGE IN CAMBODIA, FIGURE 1.1: FOREST LAND COVER By putting forest resources under the Protected Areas Areas under the Protected resources By putting forest (RGC), of Cambodia Government the Royal system, of the the reversal ensure to steps key made has Cambodia’s forest cover. on forest declining trend 2006 because of pressure has declined since cover Forests occupy a significant area of Cambodia and Cambodia and of area a significant occupy Forests and important forests country’s of the the majority cover Forests (PAs). Areas in Protected are watersheds with of the country) million ha (45 percent about 8.1 with secondary interspersed patches intact forest agriculture for been cleared that have and areas forest covers system The PA 2018). or other activities (MoE and includes of Cambodia) million ha (41 percent 7.4 Many area. of Cambodia’s forest percent about 67 encroachment from threats face (PAs) areas protected timber illegal production, cultivation, charcoal for poaching. harvesting and wildlife BACKGROUND & OVERVIEW BACKGROUND 14 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 2 https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS?locations=KH of GDPin2018. services provided by forests, contributed 22percent regulation, erosion regulation andnutrientretention Agriculture, whichdependsheavily onwater flow waterand facilitatingimportant purificationprocesses. of Cambodia,are for important regulating water flows Cardamom Mountains, andintheeastern mountains 1.3showedin Figure thatintactforests inthe (ADB 2014). Analysisby Bottrilletal.(2015) presented country’s five majorriver basinsare under forest cover habitats for freshwater. Alloftheheadwaters ofthe Terrestrial forests in Cambodia are important FIGURE 1.2:NATURAL, PRODUCED,ANDHUMANCAPITAL INCAMBODIA,1995–2014 economic growth at7.6 percent from 1994–2019. and fisherieshave contributed to Cambodia’sstrong 1.2. Thiscapital,whichincludesagriculture, forests contributes significantly Figureto itseconomy; see for about40percent ofCambodia’swealth and Natural capitalsuchasforest resources account Contributing to Cambodia’sEconomy? 1.1 How are Forest Ecosystem Services

% OF TOTAL WEALTH 100% 30% 50% 70% 80% 10% 20% 40% 60% 90% 0% 2 Rice production isthemostimportant 1995 Natural Capital 2000 Produced Capital garments andtourism. that underpinCambodia’skey sectors –agriculture, flow regulation, biodiversity disaster mitigation provide services like important water andsediment income statusin2015. Cambodia’s forest ecosystems (current prices) andagraduation to lower-middle- per capitafrom US$300 in1994to US$1,623 in2019 This demonstrates anincrease ingross national canals whichunderscore theimportance ofsustaining surface water structure initiatives like large irrigation area to 872,000 ha (by 2025)from 672,000 in2015 with Meteorology (MOWRAM) plansto increase itsirrigated rice. ofWaterdry-season TheMinistry Resources and little impactonrice yields andismore for important Studies indicate thatwet seasonirrigationhasvery for irrigation,especiallyinthesouthofcountry. sources and,increasingly, groundwater isbeingused Water for irrigationis drawn from surface water cultivated area, andabout10percent ofitsrice crop. relies onirrigationfor about16percent ofitstotal contributor to theagricultural economy. Cambodia 2005 2010 Produced Capital 2014 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 15 Jan. 2015 Dec. 2018 Aug. 2014 Year of Operation Year 800 540 500 Cost (US$million) Cost Cardamoms hosts the longest wild elephant track track elephant wild the longest hosts Cardamoms has and the world in southern Cardamom) Kong, (Koh poaching over from elephants preserved successfully as ecotourism is exploring The RGC years. the last ten its rich natural of management strengthen to a driver With a captive prosperity. capital and boost economic the temples, on the Angkor focused market tourism (MoT) are and Cambodia’s MinistryMoE of Tourism policies, regulatory management developing now and guidelines and making strategies frameworks, ecotourism. expand to investments in Cambodia hydropower sustain help to also Forest and other the garment power to which provide in that investing has indicated industries. The RGC energy is a national and sustainable hydropower, made significant investments already priority and have and Kong plants in Koh hydropower in dams in large energy growing The country’s provinces. Kampot (HEP), power hydroelectric met in part by needs are flow water important for are systems forest where estimates The RGC in rivers. and sediment regulation important part an increasingly that HEP will become 26 (from term of its energy supply mix in the medium 2020) and have by about 50 percent to in 2013 percent Table in this (see already made significant investments increasingly Cambodia is experiencing However, 1.1). of the the performance which affect droughts severe of rated of 75 percent plants. A reduction hydropower during the dry plant occurs capacity of hydropower under climate season and this will be exacerbated 2014). (RGC change 338MW As much 400 MW 246 MW 3 Installed Capacity (MW) Installed Forest products that are that are products Forest 4 Sources: Dreher and others 2017; Khmer Times 2015. and others Dreher Sources: Hydropower Project Hydropower Lower Se San II Lower Stung Tatai Russei Chrum Krom Russei TABLE1.1: LARGE HYDROPOWER DAMS IN CAMBODIA DAMS LARGE HYDROPOWER TABLE1.1: as 85-90 percent of household income depends income of household as 85-90 percent wild timber, (fisheries, services on ecosystem directly and firewood). crops food, Erban and Gorelick (2016). Closing the irrigation deficit in Cambodia: Implications for transboundary impacts on groundwater and Mekong River flow River Mekong and impacts on groundwater for transboundary the irrigation deficit in Cambodia: Implications Closing (2016). 3 Erban and Gorelick Thom and Kampong in Kratie, and livelihoods services ecosystem between the connection examined (2010) and others 4 Persson Battambang provinces. surface water flows (Raju and Taron 2018). Taron and (Raju flows water surface Tourism and ecotourism, which contributed to to which contributed and ecotourism, Tourism 2018 of Cambodia’s 18 percent approximately considerable on the country’s is dependent GDP, Cambodia, which landscapes. in forest biodiversity hotspot, is one sits within the Indo-Burma biodiversity in Southeast Asia. countries of the most biodiverse of this biodiversity 53 percent an estimated In total, (Bottrill areas protected in the country’s is contained forest Mountains The Cardamom 2015). and others diversity has a remarkable landscape, in particular, gaur bears, of animal species, including elephants, fish and and freshwater bovine) largest (the world’s The being discovered. regularly new species are Fisheries are also dependent on forest services. services. dependent on forest also are Fisheries provide forests and flooded mangroves Freshwater 300 species of fish and than more habitat support for help support the fisheries and thereby crustaceans and River Mekong fisheries in the Freshwater industry. a vital part economy, of the country’s Sap are Tonle provides The fisheries sector security and culture. food 75 for accounting million people, 2 to employment and intake animal protein of households’ percent of GDP. 12 percent about to contributes collected frequently include timber, bamboo, rattan, rattan, bamboo, include timber, frequently collected as snails, frogs, such food plants and wild other edible sale. and consumption household for eels and crabs 16 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA for development purposes versus protection. relative benefits(and costs) associated withinvestment document theirimportance andto better evaluate the of thenatural assets present inkey protected areas to “A priority for resource assessments isthevaluation isRelevantServices andTimely 1.2 Valuing Cambodia’s Ecosystem with forest landscapes intheeast andwest mountainous areas ofCambodia Notes: Darker blue areas show important freshwater habitats which overlap WEST MOUNTAINOUS AREASOFCAMBODIA FIGURE 1.3:OVERLAPS BETWEENFRESHWATER HABITATS ANDFORESTLANDSCAPESINTHEEAST MoE (2017:7) national Green Growth strategy.” Excerpt from NPASMP, financial support for protected areas aspartof a This type ofeconomic analysis iskey to sustaining regulating services (e.g. carbon storage and water). (e.g. timber, firewood, NTFPs andagriculture) and Valuations should includebothprovisioning services Source: Bottrilletal.2015 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 17 MoE’s MoE’s 5 6 Cambodia’s economic activities. Forests, in helping to in helping to activities. Forests, Cambodia’s economic especially during the dry season, flows maintain water Seasonal water conditions. drought reduce help to Sap basins of the Tonle in the river exists scarcity 18 out of 25 provinces (e.g. in 2016, Basin Group River foremost policy documents on PAs – The Protected The Protected – on PAs policy documents foremost Areas National Protected of 2008 and the Law Areas – 2017-2031 Plan (NPASMP) and Management Strategy values service the use of ecosystem advocate strongly and prioritization of areas planning in conservation helping to efforts and protection strongest for in PAs also The NPASMP of deforestation. drivers address valuation studies for targets performance contains which emphasize the development PAs influencing valuation. for RGC among the importance illegal timber harvesting and wildlife poaching. and wildlife timber harvesting illegal Sources: Conservation International (2012); Initial Forest Reference Level for Cambodia under the UNFCCC Framework (2016) Framework Cambodia under the UNFCCC for Level Reference Initial Forest (2012); International Conservation Sources: Forest degradation in PAs, like the Cardamom Mountains Protected Landscape, is mostly driven by by Landscape, is mostly driven Protected Mountains the Cardamom like in PAs, degradation Forest and charcoal land grabbing, such as rice, the cultivation of crops for in the forest clearings small-scale of in- is the combination clearing The principal cause of this type of forest collection. and fuelwood growth. local population by extent to an compounded rights, and poorly defined property migration outside. Land grabbing from in-migration for the area to access is increasing development Infrastructure of deforestation, cause a proximate has also been identified as actors local powerful and speculation by towns. nearby businessmen from to and sold being cleared with land often housing, such as timber for their subsistence, for resources on forest communities of local Reliance forest on detrimental effects have fish and bushmeat, can also products, forest non-timber firewood, severe. biomass, although less Mountain of the Cardamom edge at eastern is a significant cause of deforestation production Charcoal the Despite Kong. and Koh Pursat in Phnom Penh, charcoal demand for due to Landscape Protected logging in the Cardamoms. (illegal) indications of small-scale are there logging moratorium, official who migrants by a living, and make and sell timber to who log villagers is carried out by logging Illegal selective of small-scale in the form It is mostly undertaken actors. local powerful by employed often are mainly luxury woods. targeting logging, BOX 1.1: DRIVERS OF DEGRADATION IN PROTECTED AREAS IN PROTECTED BOX 1.1: DRIVERS OF DEGRADATION A National REDD+ Strategy undertook an analysis (for the entire country) on drivers of degradation, which helped identify the threats being faced in being faced which helped identify the threats of degradation, on drivers country) the entire an analysis (for undertook 5 A National REDD+ Strategy plan in 2018. investment forest of the government’s analysis was used in the formulation This (government-led) 2017). (RGC PAs PAs that 20 It is expected (2017-2031). as part MoE of its NPASM 2021 has been set by valuation studies’ by completed that have of ‘5 PAs 6 A target 2017). 2031 (MoE valuation studies by completed have would Cambodia’s impending water crisis and the impacts crisis and the impacts impending water Cambodia’s on attention will put increased change of climate and disaster regulation flow and the water forests also Forests provide. that they services mitigation mitigation benefits that help protect disaster provide Influencing the RGC’s decision-making on on decision-making RGC’s the Influencing and conservation Areas Protected in investments valuing for reasons among the core is protection proportion A large in Cambodia. services ecosystem and rich biodiversity landscape of Cambodia’s natural them important which makes within PAs, is contained remain still they but and protection conservation for even example, activities. For illegal to susceptible Mountains of the Cardamom though 62 percent from threats faces it still system, under the PA are production, charcoal cultivation, from encroachment 18 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA with recommendations for steps going forward (e.g. afundfor Kabal Chay), butthere’s actiononthisto been nofurther date. a way to explain PESto variousstakeholder andministriesaswell asto gauge theirthoughtsonwillingness to pay. Since then,UNDPdidprovide MoE people across different ministriesaswell asstakeholders from bothKhulen andKabal Chay (e.g.,water utilityinKabal Chay, Angkor beer, etc.). Itwas 7 Anationaldialogue onPESwasorganizedby UNDPandCIinSeptember 2019 to keep thedialogue onPESmoving forward. Itbrought together lack offundsto provide adetailed analysis onthe PES system were notcovered. Indeedthere wasa practicalities onhow to designandimplement a a surcharge for hotels inSihanoukville), although fees to tourist areas (e.g.for Khulen mountain,or ideas abouttheapplicationofpossible tourism more general recommendations, whichprovided and somerecommendations were made.Thesewere mechanisms may beputinplace for thesetwo sites UNDP commissioned astudyto look atwhatPES Kabal Chay watershed whichfeeds Sihanoukville. watershed whichprovides water for SiemReap, and MoE to look athow to implement PES–PhnomKulen in Cambodia.Two pilot sites have beenselected by there wasstrong interest indeveloping aPESscheme visit ofMoE officials to Costa Rica for aPESstudy tour, Conservation International (CI)andUNDP. Following a being piloted of inCambodia,withthesupport service valuation studies.PESinitiatives are management underscores theneedfor ecosystem Services (PES) to supportnatural resources Strong interest oftheRGC inPayment for Ecosystem as freshwater habitatsistherefore critical. increase landslide occurrence. Conservationofforests more susceptible to fires, and excessive rain can indicates thatwithdrier conditions forests willbe but evidence from similartropical environments change onforests have notbeenstudiedinCambodia, the eastern areas ofthecountry. Impactsofclimate flooding expected to bemore extensive in particularly be around anextra 1.5monthsofdrought, andwith because ofclimate change, withexpected changes to flooding are expected to be exacerbated inCambodia which water enters rivers andstreams. Drought and rainfall events andregulating (slowing) thespeedat rolesimportant by actingasstores ofwater during between seasons.Inthewet season, forests alsoplay is insufficient to redistribute water significantly capacity (less than10percent oftotal water generated) people lackingwater) andexisting reservoir storage are affected by droughts witharound 2.5million on thewillingnessto pay. stakeholders andusergroups, andcriticallyalso approaches. TheWorld BankinCambodiahasagreed managing itsnatural capital through landscape assistance andanalytical andadvisoryservices on to provide guidance to theRGC through technical a broader effort oftheWorld BankinCambodia The analytical workisbeingundertaken as part of 1.3 AboutthisAnalyticalWork andReport Mekong and3S(Sekong, Sesan,Srepok). in PAs oftheeastern river basins–Sen,Chinit,Upper with afocus on integrated watershed management prepared whichwillfocus onlandscapemanagement landscape, and(ii)anewlandscapeproject being capital intheCardamom Mountains andTonle Sap the management andvalueadditionofthenatural Ecotourism project which focuses (CSLE) onimproving making: (i)theCardamom Sustainable Landscapeand ecosystem service valuesinto forest andPA decision- now opportunities forimportant theRGC integrating at thenationalorsubnationallevels. There are two how resources are allocated for forest protection national level thathasdetermined decisionsaround been little systematic economic valuationwork atthe of thedraft Environment Code. However, there has on forest management, andalsointhedevelopment years, influenced variousnationalpolicies,including including someeconomic analysis,have, over the in Cambodia.Data, information andanalysis by NGOs, determining how forests are managed andfinanced Economic analysishasplayed alimited role in and capacity development, amongotherthings. studies ofecosystem services value assessments valuation methodology, development ofcase needs to bedevelopment ofgovernment-endorsed driven decision-makingonforest andPAs, there In order to meetthedemandofRGC for values- comprehensive PESmechanisminCambodia. to thegrowing bodyofwork neededto designa 7 Thisanalysiswilladd

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 19 it was selected to strategically demonstrate how how demonstrate strategically to it was selected is undertaken, services the valuation of ecosystem of benefits is a stream there particularly where well-defined users, to flowing the ecosystem from valuation can inform how demonstrate and also to and monetary The biophysical management. PA with consistent approaches assessments follow of Environmental- the System by guidelines proposed Experimental Ecosystem Accounting Economic (SEEA EEA).Accounts impacts of deforestation on forest ecosystem services. services. ecosystem on forest deforestation impacts of and valuing forest measuring for Methodologies as well also been developed have services ecosystem the for and documented RGC, as discussed with the assist in decision-making. to as a tool government to contribute to expected are These methodologies policy on science-based body of literature the growing scaling- for Recommendations and decision-making. and valuation services assessment up ecosystem and map within this report as a road provided are can inform this work how for proposed actions are namely management, and PA forest for investments in the and restoration conservation, protection the will also provide work The Mountains. Cardamom as investments PES as well like tools underpinnings for both of which will be management, and PA in forest as 1.2 below), (Box the CSLE project under developed capital accounting. such as natural as tools well Strengthen Capacity for PA Landscape Planning and Management Landscape Planning and Management PA Capacity for Strengthen Chains and NTFP Value Ecotourism OpportunitiesStrengthen for and Connectivity. Access Improve • • • BOX 1.2: CAMBODIA SUSTAINABLE LIVELIHOOD AND ECOTOURISM (CSLE) PROJECT (US$55 MILLION) (CSLE) LIVELIHOOD AND ECOTOURISM BOX 1.2: CAMBODIA SUSTAINABLE opportunities and non- ecotourism and promote management PA improve is to This project’s objective landscape Sap (CMTS) Tonle Mountains (NTFP) value chains in the Cardamom product timber forest and regulatory the legal in strengthening will also support the RGC in Cambodia. The CSLE project in PAs. (EIPs) projects investment of ecotourism the management for framework aligned with RGC’s strongly that are in areas invest will strategically this, the project achieve To components: three are plans. There development Accordingly, this study provides evidence of the of the evidence this study provides Accordingly, Mountains in the Cardamom of forests importance are that alia, inter services, ecosystem in providing and climate economy Cambodia’s for important to and helps the RGC resilience and disaster of its natural the value quantify and communicate This is done by economy. Cambodia’s to capital forests by provided services quantifying ecosystem and evaluating terms, and economic in biophysical within its Country Partnership Framework (CPF) to Framework Partnership Country within its on strengthening support the Cambodian government Working resources. of natural use the sustainable in the Cardamom a landscape approach through in the upstream Delta and the Mekong Mountains, better to the Bank is helping the RGC Mekong, through capital its natural and add value to manage economy. the to its links strengthening The analysis focused on selected ecosystem services services ecosystem on selected focused The analysis the of Basin River in the Pursat forests by provided (a) seasonal water-regulation Mountains: Cardamom for of water the availability which affects service, which service, irrigation; and (b) sediment regulation Another analysis of hydropower. the operability affects and assess the value of tourism was also done to of the The selection in the same area. carbon forest its importance does not indicate watershed Pursat in Cambodia. Instead other watersheds to relative 20 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 8 Seehttps://seea.un.org/ for more information andtechnical manuals onthesystem ofenvironmental accounts. and three recommendations: The report putsforward three key messages (KMs) using aNatural CapitalAccounting (NCA). provided by forest ecosystems across Cambodia scaling upassessmentofeconomic benefits Recommendation 3:Develop aroad mapfor private financing to support PA management. Recommendation 2:Explore thepotential for to enhance resilience ofwater resources. Cardamom Mountains protected area landscape restoration effortsonupstream watersheds in the Recommendation 1:Focus forest protection and private andinternational sources. forests inthelong runcanbecaptured from KM 3:Fundingfor the maintenance ofthose by them. about 20timeslower thanthebenefitsprovided maintain theforest inthePursat Basinare is good business. Annualpublicexpenses to KM 2:Investing inthemaintenance offorest production, which isestimated atUS$22 million. down for small-scale agriculture andcharcoal times higherthanthegainsfrom cuttingthem (estimated atUS$99 million)are almostfive KM 1:Theeconomic benefits from intact forests Cambodia andsomethodologies appliedhere canbeusedandreplicated inotherriver basinsinCambodia. to hydropower andecotourism aswell asPAs, itcanbeconsidered arepresentative for otherbasinsin forest ecosystem there.arange Asthebasinsupports ofdifferent usesfrom irrigationfor rice production it isaneconomicallyarea important andthere are clear beneficiariesofservicesbeingprovided by the its potential. ThePursat River Basinprovides anexcellent casestudyfor ecosystem service valuationas Mountains) andunderstand how ecosystem degradation could change theabilityofbasinto reach also account for thebasin’snatural characteristics (intheform ofterrestrial ecosystems intheCardamom power generating potential oftheriver. Asbuiltinfrastructure isdeveloped intheregion,to itisimportant constructing irrigationinfrastructure to stabilizeandextend thegrowing seasonandalsoby harnessingthe Today, theriver offers to anopportunity propel thisregion’s economic andhumandevelopment forward, by of theTonle Sapandwater from thePursat River –whichisfed by rainfall highintheCardamom Mountains. rhythm hadbeendictated by seasonalchanges. Agricultural irrigationhasrelied onrainfall, theflood pulse floodplains ofthisriver have beenused for cultivation.Dominated mainly by rice, thebasin’sagricultural The Pursat River Basinisatan interesting juncture ofitsdevelopment trajectory. For millennia, the Focus onthePursat River Basin accounts to remedy thisproblem. developed to complement standard national A system ofenvironmental accounts has been decisions are made. to themisnottaken into consideration whenpolicy are often thoughtto bewithoutvalueanddamage other activities.Asaresult, resources theseimportant included innationalaccounts butrather attributed to being, buttheseroles are often notrecognized nor contributions to economic activityandhumanwell- Environmental andnatural resources make important Using aNatural Capital Accounting Framework Appendices 4 and 5. more detailin bothChapters 4and5aswell asin and themethodsthatwere usedare describedin the valueofcarbonandtourism benefitsfrom forests, provided by forests. Work wasalsodoneto estimate measurement andvaluationofhydrological services approach (described below) for thisstudyfocus onthe The majoranalyticalactivitiesandmethodological Valuing Ecosystem Services 1.4 Overall Methodological Approach to 8 Theseaccounts VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 21 After a brief survey of potential hydrological hydrological of potential a brief survey After a this study, for be suitable models that could hydrological (SWAT) Tool Assessment Soil & Water and setup using data derived model was selected from discharge Daily sources. and global local from ensure station was used to monitoring Bac Trakuon Basin provided Pursat model for the hydrological of representative that are estimates flow river records. known and planned infrastructure The impact of current (mainly 3 dams currently discharge on the river 1, 3 and 5) was achieved as Dam designated on the time dam model that ran a simple through the hydrological from extracted series results (1) at the model. This was done specifically because the for rules the operation time of model-setup, dam and (2) an external not known; 3 dams were modify operation us the option to model allowed gatherings during stakeholder in real-time rules the impact downstream. together and examine was model performance the hydrological Once time series the resulting deemed satisfactory, and (both overall and sediment yield of water basin two for land covers) with different associated the monetary facilitate to was extracted conditions the represents condition The first evaluation. and was based basin in the river land cover current the from received for 2016 cover on official land The second Cambodia’s Ministry of Environment. - a ’no change a hypothetical represents condition forest Under this, all mature forest’ counterfactual. forests in the Cardamom Mountains (which compares (which compares Mountains in the Cardamom forests if the received be would that to those benefits current an analysis of the economic with did not exist) forests (which rates deforestation current from resulting costs be would to those that benefits current compares partially lost). were if forests received of Valuation and Economic Assessment Biophysical Services Ecosystem Hydrological was analysis of the hydrological component The core of a hydrological and validation calibration the setup, be used to that could basin the river model for and water to variation and seasonal spatial analyze sediment yield. • • • It is important to note that this asset value, value, that this asset note to It is important of other the value to comparison useful for while the decisions to directly does not speak assets, in the Cardamom The forests policy-makers. facing in no immediate are under pressure, while Mountains, policy purposes, it For of vanishing entirely. danger the value of the how examine to relevant is more under likely change would provide benefits they This rates. deforestation such as current changes, the value of the house would asking how is akin to rain that lets in the roof was a leak if there change be less would in; the value of that damage come we value of the house. In this report, than the entire the analysis of the asset value of the complement For comparability of the forest asset with other with other asset of the forest comparability For of benefits the flow accounts, the national in assets in which the the counterfactual against is measured straightforward This is relatively not exist. does asset of benefits. flows the ecosystem’s to when it comes be no timber for would there Without a forest, disappear. would of that service harvesting, so the flow not necessarily would Other however, services, would rain no forests, were if there Even disappear. flow to continue would fall and so water to continue would and the water be different would — but it’s flow of benefits it the level affect which would be dirtier, change would these benefits how Estimating provides. is one of the main challenges of forests in the absence such as this. a work in face we The economic value of an ecosystem — such as a forest a forest — such as an ecosystem of value The economic the various of summing the values by — is estimated with comparability For providing. of benefits it is flows accounts, the value of other assets in the national the as the asset value: this value is usually expressed to be expected of benefits value of the flows present time horizon. a given over provided begin by identifying the stocks of environmental of environmental the stocks identifying begin by provide, they that of services and the flow resources change flows and these stocks how track then they the of estimating the additional step time. Taking over their benefits allows flows and value of these stocks comparison enables form that be quantified in a to is what this report activities. This other economic to Mountains. the Cardamom do in the case of seeks to 22 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA • erosion control services to avoid damsedimentation. water supply to meet rice irrigation demandandsoil from hydrological modeling.Two specificinputsare Economic valuation inthisanalysis takes inputs • (at 1percent rate). also inamore aggressive deforestation scenario by ongoing deforestation (at0.25 percent rate) and estimated how muchofthatvalueisthreatened absence offorest as describedabove. We then water supplyanddemandinthepresence and water supply. Thiswasexecuted by comparing estimate theeconomic valueofforests whichaffect inputs. Thisvalueofwater wasthenusedto market price andcost ofallknown production water basedoninformation suchasrice yield, function methodisto tease thevalueof apart other commodities. Thepurposeoftheproduction known becauseitisnottraded inthemarket like from market information, theprice ofwater isnot etc. Althoughthe prices ofmostinputsare known inputs suchasfertilizer, seed,chemicalslabor input to rice production process alongside other was used.Inthiscase,water isconsidered an method (called Residual ImputationMethod) For water supplyservices aproduction function assessment method. was calculated usingFAO’s irrigation water demand water requirement from irrigation(for eachmonth) estimated (from thehydrological model),crop year. Then,usingrainfall andevapotranspiration total area requiring irrigationatany monthina with known cropping patterns to anapproximate wet seasonpaddycrop anddry wasadjusted For this,thenetprojected command area for the seasonal variationinwater required for irrigation. (monthly) water availability wasestimating A complementary aspectofderivingseasonal afforestation rates. that willapplymore realistic deforestation/ developed from policyandplanningperspectives forests andshould notbeconfused withscenarios of thetotal economic valueofhaving intact of thecounterfactual isto provide anindication land cover. Asanote ofexplanation, therationale in thebasinwasreplaced by barren orbare earth determined by assessing theeconomic returns that Estimates ofbenefits forest conversion were and tourism. benefits of forests for irrigation,HEP, carbonstorage scenarios approach wasusedto estimate annual for irrigation,HEPandtourism. Thedeforestation used to estimate netpresent valueofbenefits forest counterfactual approach (ifforests were removed) was on hydrological, tourism andcarbon benefits.The summation ofbenefitsderived from thethree studies The estimated economic benefitsof forests are the reduction programs inCambodia. and theprice ofcarbondetermined from emission assessment donefor Cambodia’sREDD+program by forest typewasobtainedfrom forest carbonstock for assessingcarbon stocks. Data oncarbonstocks Verified CarbonStandard(VCS) methodology VM0015 MoE. Estimatingcarbonbenefits followed standard visitor arrivals andlength of day were agreed with assumptions aboutchanges invisitor spending, obtained from theMoE ecotourism records and ecosystems are thekey tourism asset.Data was used to estimate benefitsfrom tourism where forest (arrivals, visitor spending and length ofvisit)was on visitors to tourism sites inthePursat Basin Estimating tourism andcarbon benefits.Data • value (NPV) term aswell asinannualvalues. we reported economic valueinnetpresent Because ofalong-time horizonofdamoperation, threatened by different rates ofdeforestation. same timeestimated how muchof thevalueis forest for provision ofthisservice andatthe sedimentation. We estimated total valueof based onreduction indamcapacitydueto in hydro energyvalueswasthenestimated lifecycle ofthedam.Thecorresponding loss run for 100years –whichisassumedto bethe no-forest counterfactual. Thissimulationwas deforestation at0.25percent, 1percent and that isdeposited inthedamaprogressive rates were usedto simulate total sediment types derived from hydrological analysis.These used soilerosion rates for different landcover For valuationofsoilerosion control services, we VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 23 Account Ecosystem Ecosystem Supply-Use Supply-Use

($/ha of ($/ha of services services irrigated irrigated use values use values Ecosystem Ecosystem supply and supply and agriculture) valuation Economic Economic value of water value of water (e.g., monetary (e.g., monetary for agriculture) for agriculture)

/ha of /ha of 3 of water of water irrigated irrigated (m irrigation) irrigation) supply for supply for Ecosystem Ecosystem agriculture) and benefits and benefits services use services use (e.g., volume (e.g., volume for the Pursat Basin; results of the valuation of Basin; results Pursat the for presented Basin are in the Pursat services hydrological valuation of carbon and tourism 3; results Chapter 4 and 5; and in Chapter in Chapters presented are 6 a discussion on policy implications of this work is provided. steps next for including recommendations the analysis is included for methodology An extensive document. as a separate Pursat Basin like flood regulation and biodiversity and biodiversity regulation flood like Basin Pursat will values these and valued, If assessed regulation. of the assessment comprehensive a more to lead This is a ecosystems. forest by benefits provided study and it is recommended limitation of the overall at in further work. be looked to modeling biophysical tasks for A schematic of the key in Figure 1.4 valuation is provided and ecosystem of water of water 3 supply) Ecosystem Ecosystem (m water supply) water supply) (e.g., volume of (e.g., volume of services supply services supply Biophysical Biophysical assessment

of intact of intact 2 condition condition forest per per forest (e.g., land (e.g., land sub-basin) Ecosystem Ecosystem degradation) degradation) (km

) 2 (km extent extent Ecosystem Ecosystem sub-basins) (e.g., forested (e.g., forested The rest of the report is structure as follows: Chapter Chapter as follows: is structure of the report The rest analysis of the hydrological the results 2 presents Structure The data used in the analysis is listed in Appendix 1. The data used in the analysis is listed Data for Analysis for Data FIGURE 1.4: SCHEMATIC DIAGRAM OF THE SEQUENCE OF BIOPHYSICAL AND ECONOMIC VALUATION IN SEEA EEA CONTEXT, IN SEEA EEA CONTEXT, AND ECONOMIC VALUATION DIAGRAM OF THE SEQUENCE OF BIOPHYSICAL FIGURE 1.4: SCHEMATIC AGRICULTURE FOR IRRIGATED SUPPLY EXAMPLE OF WATER WITH AN ILLUSTRATIVE The study acknowledges that there are more more are that there The study acknowledges in the forests by provided services ecosystem could be gained if forests in the Pursat River Basin are Basin are River Pursat in the be gained if forests could 980 (about of 0.25 percent rate at an annual converted of The stream and agriculture. charcoal for hectares) compared were conversion forest costs of benefits and a period of for analysis value (NPV) using net present rate. discount at 6 percent 50 years 24 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 2 • • • objectives for thehydrological analysiscanbesummarizedas: provides thebasisfor theeconomic evaluation inthenext chapter. Theoverall irrigation demand andsediment yield for different land cover scenarios— results from thisanalysis-specifically, estimates ofwater deficit relative to of changes inwater availability, irrigationdemand andsedimentflows. The data preparation, setupandresults. Theanalysisderives seasonalestimates seasonal flow variationandsoilerosion inthePursat River Basin,including This chapter outlinesthedevelopment ofthemathematicalmodeling of 2.1 Overview HYDROLOGICAL ANALYSIS Sebastian Troeng records drone photos andvideofootage while traveling across Tonle SapLake duringthe2018AsiaPacific Understand therelation ofwater andsedimentyield to landcover quantities; Understand spatialcontributions andseasonalchanges to these sediment yield; Develop ahydrological model of thebasinto estimate current water and Executive Leadership (APEX)meetings inCambodia.©Conservation International/photo bySebastian Troeng VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 25 STUDY AREA MAP STUDY HYDROLOGICAL ANALYSIS HYDROLOGICAL 26 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA FIGURE 2.1:LANDCOVER 2016MAPANDDISTRIBUTION most ofthewater for theseschemesdependsonthe is listed inSection2.4. Inthisstudy, we assumethat Pursat Basin.The total command area for theschemes Daunkeo andMoung Ruesseistreams, west ofthe the Pursat River isto bediverted to thesmaller Svay Chheur Kram &Damnak Ampil)inwhichwater from implementation, includingirrigationschemes(Damnak irrigation infrastructure works are degrees atvarying of (Dam 1)hasbeen approved for construction. About20 are operational, andathird, larger hydropower dam 3 andDam 5)have beenconstructed inthebasinand supports hydropower andirrigation. Two dams(Dam Water storage infrastructure inthePursat River Basin station ofBacTrakuon 2.1). (Figure Khlong), jointhemainstream just above thegauging tributaries, theStungPeam andtheStung Santre (Prey the river isapproximately 150kmlong. Itstwo main Sap. the Cardamom Mountains andflows into the Tonle The Pursat River originates intheEastern slopes of 2.2 Pursat River Basin The basinhasanarea ofroughly 5960km2; cassava andorchards. this landclassandisexpected to includecashcrops, agriculture inSamKos Wildlife islargely Sanctuary of natural landcover to agriculture. Thearea cleared for cropland parcels are likely to beintransition from with any specific crop. Inat least somecases,these field” land cover category, thislandisnotassociated used for theforest landcategory.” Unlike the“paddy systems where vegetation fallsbelow thethresholds arable andtillage landandagroforestry that “includes classification system defines “cropland” asland cover rubber plantations.Itshould benoted that theMoE driven by conversion offorests to cropland and experienced significantchanges inland cover, Kos Wildlife Sanctuary, appears to have already upstream oftheproposed Dam 1,withintheSam predominantly evergreen forest. However, thearea (~ 68percent) iscovered by natural forested land- from theMoE.Asignificantproportion ofthebasin Official land cover for the year 2016 was obtained streams provide relatively little water. Pursat River, as theSvay Daunkeo and Moung Ruessei

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA

27

Dec

Nov

Oct Sep

Pursat Gauge

Aug

Jul Jun

is a climate reanalysis reanalysis is a climate

9 May

ERAS data

(B) MAXIMUM RECORDED Apr

Mar

Feb Jan 0

80 60 40 20

120 100 P (MM) P

The overall behavior is consistent between these between is consistent behavior The overall low extremely datasets (Figuretwo 2.3). However, years for the quarter in the first recorded are flows have conditions drought-like While 2014-2016. this same period, the daily over been reported 7 January from (0 m3/s) of no flows reading gauge appear uncharacteristic. June 2015 13 to 2015 dataset developed through the Copernicus Climate Climate the Copernicus through dataset developed the two of comparison (C3S). After Service Change datasets (Figure 2.2), the ERA5 dataset was selected dataset used in the study as the primary precipitation its superior coverage. to owing estimates from the ERA5 global dataset at 13 points dataset at 13 points global the ERA5 from estimates the using been extracted the basin have covering Earth Engine. ERA5 Google

Dec

Nov

Oct

Sep

Pursat Gauge Aug

Jul

Jun May

(A) MONTHLY AVERAGE (A) MONTHLY

ERAS data

Apr

Mar

Feb Jan

2 0 6 4 8

12 10 P (MM) P MoWRAM reported (pers. comm.) monthly water monthly water comm.) (pers. reported MoWRAM the Bac Trakuon for and discharge availability to 1997 from station based on monitoring monitoring the same data for daily gauge Actual 2.1). (Table 2011 the covering MoWRAM by station was made available 2016. 31 December 1 January 2007 to period from Discharge Data Discharge Data processing for ERA5 is carried out by the European Centre for Medium-Range Weather Forecasts (ECMWF), using ECMWFS’ Earth System model (ECMWF), using ECMWFS’ Earth System Forecasts Weather Medium-Range for Centre the European ERA5 is carried out by for processing 9 Data by ECMWF. reanalysis produced ERA5 being the fifth major global with ‘ECMWF ReAnalysis’, to 41r2. ERA refers The name IFS, cycle Source: Authors’ creation Authors’ Source: Notes: (a) ERA5 monthly averages are in general higher than the local gauge while (b) ERA5 generally underestimates peak precipitation rate. Given Given rate. peak precipitation underestimates (b) ERA5 generally while gauge higher than the local in general are (a) ERA5 monthly averages Notes: behavior. expected with consistent are than values at a specific point, both these trends rather averages areal that ERA5 provides FIGURE 2.2: COMPARISON OF ERA5 ESTIMATES WITH VALUES MEASURED AT LOCAL GAUGE MEASURED AT WITH VALUES OF ERA5 ESTIMATES FIGURE 2.2: COMPARISON Daily precipitation data covering the period 2004- covering data precipitation Daily Ministry of Water Cambodia’s from is available 2018 a single (MoWRAM) for and Meteorology Resources the variability Given in the basin. gauge precipitation basin, daily precipitation of altitude within the Precipitation Data Precipitation 2.3 Key Hydrological Datasets Hydrological 2.3 Key 28 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA

TABLE 2.1: WATER AVAILABILITY AT BAC TRAKUON STATION

Water availability 1997-2001 Discharge 1997-2001

(million m3) (m3/s) Average discharge (m3/s)

Max Average Min Max Average Min 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Jan 76.1 29.2 4.4 28.4 10.9 1.7 5.2 2.7 5.2 6.3 7.6 6.5 3.4 6.8 0.1 0.5

Feb 45.9 13.9 1.2 19 5.8 0.5 2.2 0.5 2.1 2.7 1.9 3.6 0.1 0.5 0 1

Mar 59.7 20.7 1.3 22.3 7.7 0.5 2.9 13 2.5 3.4 6 5.6 0.4 0 0 0.1

Apr 405 78.9 7.1 156.3 30.4 2.3 6.1 156.1 51.1 4.2 11.6 8.9 2.7 3.8 0 0.1

May 853 180 13.4 318.5 67.2 5 144.7 318.4 101.2 10.1 41.5 16 13.2 24.2 0 3.5

Jun 461 170 32.4 177.9 65.6 12.5 165.6 177.9 83.7 26.3 62.5 32.1 79.5 34.6 25.4 5.2

Jul 627 262 54.9 234.1 97.8 20.5 234.1 100.5 94 63.4 44.5 41 129.6 47.7 12.4 40.9

Aug 607 317 160 226.7 118.4 59.8 118 226.7 70.9 125.1 131 54.9 134 76.6 23 34.4

Sep 873 435 216 336.8 167.8 83.3 299.5 336.7 153.5 249.6 172.3 226.8 176 121.8 122.4 108.5

Oct 1146 617 270 427.9 230.4 100.8 156.7 120.2 193.1 358.7 281.6 242 286.8 178 151.1 250.3

Nov 864 246 55.3 333.3 94.9 21.3 84 133.9 102.5 66.3 49.5 95.7 243.1 57 70.1 110.1

Dec 212 89.7 23.5 79.2 33.5 8.8 11.1 64.7 32.9 23.3 13.9 24.2 29.7 14.6 3.5 124.2

Source: MOWRAM

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA

29

Dec Nov

Source: MOWRAM Source: Oct

2007-2016 Max 1997-2011 Max

Sep Aug

These two dams are focused on focused dams are These two Jul

operational. operational. It is understood supply. irrigation water strengthening the construction for that permission has been granted 1) that will include the generation (Dam of the third All three as one of its objectives. of hydro-energy of the irrigation upstream of these dams are section. Information outlined in the next infrastructure 2.2) were of these dams (Table on the characteristics and Ministry of Mines (2013) MoWRAM obtained from operation Dam and Energy (MME) comm.). (pers. and so simplifying unavailable currently are rules the simulate to used in order assumptions were these dams. from functioning and outflow Jun

2007-2016 Max 1997-2011 Max

May

Apr

Mar Feb

2007-2016 Max 1997-2011 Max Jan

0 2 6 4 8 8

10 10 12 12 Discharge (m3/sec) Discharge 2.4 Dam characteristics 2.4 Dam been completed 3 and 5 has of Dams Construction be to assumed are they and in this analysis Additional datasets used in this analysis include datasets used Additional model (SRTM), digital terrain a 30m resolution (Harmonized soil layer resolution 30 arc-second wind v 1.2) and humidity, Soil Database World the period 1979- for speed and solar radiation Prediction Environmental for (National Centre 2014 Reanalysis). System Forecast Climate Other Input Data FIGURE 2.3: COMPARING MONTHLY DISCHARGE STATISTICS FOR TWO TIME PERIODS FOR TWO DISCHARGE STATISTICS MONTHLY COMPARING FIGURE 2.3: 30 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA TABLE 2.3:TARGET IRRIGATED AREASINTHEPURSAT RIVERBASIN paddy cultivationusingwater from Pursat Target irrigated areas for wet season anddry 2.5 Area UnderIrrigation TABLE 2.2:DAM CHARACTERISTICS Total area Tuol Kourreservoir Thlork Ou Sanlung Phum Stueng Kandieng station Kbal Hong Roneam Chhlech reservoir Our Tatong Koh Svay Preah Chambok Prey NhiReservoir Khnorng Porpol reservoir Ang AndoungWat Luong Lor LorkSor Our RokaReservoir Baktra Dead storage (millionm Rated gross head(m) Capacity (MW) Kampeng reservoir Chheur Touk (Santre) Charek Damnak Ampil Damnak ChheurKram Project Name Storage volume (millionm Reservoir area atnormalstorage levels (NSL)(km2) Low supply level (masl) Normal storage level (masl) 3 ) 3 ) (pers. comm.). Theseare shown inTable 2.3. River were obtainedfrom aMoWRAM report Wet season(ha) 1385.6 Dam 1 85.91 113 160 180 228 78,453 11,000 27,000 16,100 80 1,000 7,270 1,519 1,315 2,410 1,167 4,700 1,142 722 120 222 120 713 956 350 145 102 380 Dam 3 25.5 Dry season(ha) 25,351 16,100 1,000 3,500 3,500 171 410 300 160 100 50 10 50 Dam 5 24.5

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA

31

Mar

Feb Jan

Dry season

Dec

Nov Oct

different sub-basins of the Pursat River Basin was River sub-basins of the Pursat different developed. yield Outputs of water dam operations: Monthly a drive used to model were the hydrological from dams, the three model for monthly dam operations at the Bac availability of water estimates provide to Station. Trakuon demand: Outputs of potential Irrigation water over and precipitation evapotranspiration model) the hydrological lands (from agricultural demand irrigation water with FAO’s used were monthly water estimate assessment method to area. command paddy in the projected demand for

Sep 2. 3. a paddy crop for at least the core months of each months core the at least for a paddy crop is of the area season, 50 percent the wet season. In in the other be under cultivation still to assumed in days of cropping the wider range months (given months of the dry in other season), while the wet assumed to is areas of the season, only 20 percent not fall in either cropping As April does be cultivated. cropping season wet of the season, only 10 percent Figure be cultivated. 2.4 tabulates is assumed to area each month. for derived the area Aug

Wet season Wet

Jul

Jun

May Apr 0 10, 000 30, 000 20, 000 50, 000 40, 000 70, 000 60, 000 90, 000 80, 000

Hydrological Response: A hydrological model A hydrological Response: Hydrological of estimating the spatial and temporal capable from and sediment yield of water response Net area to irrigate (ha) irrigate to area Net These variables will form the basis of the economic the basis of the economic will form These variables these goals, achieve To chapter. analysis in the next sub- four into down the modeling can be broken as follows: components 1. The objective of the modeling in the hydrological of the modeling in the hydrological The objective of changes estimates seasonal derive is to analysis demand and sediment irrigation availability, in water basin. parts of the river different from flows 2.6 Modeling Approach 2.6 Modeling FIGURE 2.4: ESTIMATED MAXIMUM AREA UNDER CULTIVATION IN THE PURSAT RIVER BASIN IN THE PURSAT MAXIMUM AREA UNDER CULTIVATION FIGURE 2.4: ESTIMATED June to September are the core months for wet wet months for core the are September June to Basin in the Pursat production paddy season months the core are March to and December Wet 2013). (MoWRAM, production dry season for or sowing either direct can use season production season and the growing techniques, transplanting Dry season cropping 145 days. 105 to from ranges irrigation The exact 90 days. cover to is reported so is not available, pattern each cropping for area by is estimated a year demand over the maximum 2.3 is under in Table area assuming that the total 32 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA up thehydrological model. Simulationoutputscan 2004–December(January 2006)wasused to spin the QSWAT interface. The datafrom thefirst 3 years the hydrological datasetsdescribed above andwith For thePursat Basin, theSWAT model wassetupusing universal soilloss equation(MUSLE). yield are simulated for eachHRUusingthemodified storage (Arnold et al.1993). Erosion andsediment river flow issimulated by creating shallow aquifer Method, while groundwater flow contribution to total rate isestimated usingamodificationofthe Rational infiltration method to simulate runoff. Peak runoff (SCS) curve numbermethodandtheGreen-Ampt HRUs involves usingtheSoilConservation Service SWAT simulationfor water yield from sub-basinsand streams ofthe sub-basinsto theoutlets. the movement ofwater, sediments,etc., through the in eachsub-basin;andtherouting phasecontrols nutrient andpesticideloadings to themainchannel land phasecontrols theamountofwater, sediment, Watershed hydrology issimulated intwophases . The and soilcharacteristics. in SWAT andconsist ofunique landuse,topographical (HRUs). TheseHRUsform thebasicunitofassessment subdividedintofurther hydrologic response units watersheds into multiple sub-basins,whichare then sub-basin level (Abbaspouretal.2015). SWAT divides components and subsequentlywater resources ata allows explicit calculation ofdifferent water balance model (Neitschetal.2011). SWAT’s hydrological module semi-distributed, continuous-time, process-based The SoilandWater Assessment Tool (SWAT) isa SWAT model Hydrological Response Modeling and provide references where applicable. The sectionsbelow describeeach step inmore detail 4. conditions anda“noforest” counterfactual. in theproposed Dam 1reservoir undercurrent lead to anestimate ofsedimentaccumulation rates soil erosion rates from different landcover typesto hydrological modelwere usedto derive average Soil erosion: Sedimentyield estimates from the the measured variable. Abbaspouretal.(2012) reports width ofthe95PPUbandand thestandard deviation of R-factor ontheotherhandisratio oftheaverage the recommended valuefor P-factor is >0.7. The simulation considering theuncertainty. For discharge, model prediction uncertainty i.e., aperfect model of 1indicates 100percent ofthemeasured datawithin error) bracketed by the95PPUband. AP-factor value is definedasthefraction ofmeasured data(andits 2012) are used.TheP-factor variesfrom 0to 1;and (Abbaspouretal. and“R-factor” to as“P-factor” sampling. For thegoodness offit,two indices referred an outputvariable obtainedthrough Latinhypercube 97.5 percent levels ofthecumulative distribution of process. The95PPUiscalculated atthe2.5percent and uncertainty (95PPU)ofthemodelthrough aniterative the measured datawithin the95percent prediction uniform distributions orranges) andcapture mostof model, input,etc.) on theparameters (expressed as to mapalluncertainties (parameter, conceptual the SUFI-2 algorithm to SWAT modelsasamethod Abbaspour etal.(2012) describe theapplicationof discharge from 2012 theperiodJanuary to July2014. suggested inSWAT. Validation wascarriedoutusing parameter were setfrom thelikely maximum range the calibration. Theinitialranges ofvaluesfor each for thebasin(Oeurng etal.2019), were selected for linked to discharge, whichwere shown to besensitive Programs) (Abbaspour2012). Fourteen parameters (SUFI-2) inSWAT-CUP (SWAT Calibration &Uncertainty using thesequentialuncertainty fittingalgorithm 2007toJanuary December 2011 andwascarriedout Station. Thecalibration useddischarge datafrom daily andmonthlydischarge attheBacTrakuon The modelwascalibrated andvalidated basedon Model calibration andvalidation total. HRUs. TheSWAT modelfor Pursat had1656HRUsin slope andsoiltypewasthemainbasisofderiving under 10different categories; Appendix1)andwith cover wasmappedonSWAT landcover codes (classed was dividedinto 125sub-basins.TheMoE 2016 land 2007toperiod January July2014. Spatially, thebasin be extracted atdailyormonthlytime-steps over the VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 33 ) i r ) C is the actual Monthly Monthly i r 11 ) is estimated ) is estimated ) D ) ) c c V , V — V were extracted from from extracted were i r ), its dead storage ), its dead storage D ,actual c i r i r i n - ,V /month); V /month); - S 3 i n i n out + S and V i r C + S — S + ∆

i out r i r i r i n - V — ∆ = S i r +1 i r : = max (0,V = max = V i

= min (V = min (S n

= V ) and the design discharge per month (S ) and the design discharge : +1 +1 ,actual D < S i i i i r r r out in n is the inflow (in m is the inflow is the volume at end of month. is the volume

S V S V Spill i n i r +1 > i r

i r volume at start of the month (initial condition = V at start of the month (initial condition volume using the following equations: using the following If S ∆ inflows into the 3 dams’ sites was extracted from the from extracted was the 3 dams’ sites into inflows the equations below using model and processed SWAT the 3 from outflow estimate script to in MS Excel/VBA model is adapted dam operations dams. The monthly et al. (2019). Yassin by the equations proposed from month i(S for any outflow Dam dam (V the capacity of the from and V This simple dam operations model was applied dam operations This simple and dam modeling options reservoir of SWAT’s instead to parameters more because these options require and rules sufficiently describe the dam operating not were of these parameters estimates reasonable 3 and 5. In the monthly Dams especially for available, model, V dam operations capacity (V ∆ where, S where,

Else if S

Monthly Dam Operations Dam Monthly is used, which of dam operation model A simple if outflow, monthly a stable assumes targeting it. allow and inflow conditions reservoir

10 Set up a SWAT-CUP run for the selected parameters parameters the selected run for Set up a SWAT-CUP performed are iterations 200-300 and initial range. values extracted with parameter in each batch, Latin hypercube through range the provided from 95PPU and step, sampling. As a post-processing calculated. function values are objective the of iterations, batch Using the previous based on new updated are ranges parameter the Once the program. by suggested ranges of a new batch been reviewed, have new ranges be executed. can iterations until satisfactory is repeated step The above are and R-factor of the P-factor in terms results seen are or no significant improvements reached of 3-4 batches generally in the NSE. This takes gives which set of parameters, The iterations. used as the function fit, are the best objective model. the calibrated for parameters Valuing forests requires comparing current conditions conditions current comparing requires forests Valuing This without forests. counterfactual hypothetical to as but solely scenario, as a realistic is not intended the total measure against which to a counterfactual counterfactual forest” benefits. This “no value of forest all forest replacing model by in the SWAT was created earth) (bare with a barren codes cover land related parameters made to were No other changes land cover. and validation exercise, the calibration from selected sub-section. as described in the previous 2. 3. counterfactual Hypothetical 1. Under the calibration process, the following general general the following process, Under the calibration was used: approach DNash–Sutcliffe efficiency can range from −∞ to 1. NSE = 1 corresponds to a perfect match of modeled discharge to the observed data, while NSE to the observed data, while discharge of modeled match to a perfect corresponds to 1. NSE = 1 −∞ from range efficiency can 10 DNash–Sutcliffe model simulation a better values of NSE indicate data. Positive as the mean of the observed as accurate are that the model predictions = 0 indicates models are hydrological than the model being used. Most predictor mean is a better that the observed values of NSE indicate negative while to 0.65. 0.5 fit if NSE is between a ‘good’ have to considered competing demands of HEP and weigh the possibly to during the dry season, or outflows maximize models might seek to sophisticated 11 More results, it can model hydrological to the step the model used runs as a post-processing since Additionally, prevention. as flood irrigation, as well models. alternative by easily be replaced a value of <1.5 as a desirable value for this index. this index. value for <1.5 as a desirable a value of coefficient (NSE) efficiency model was Nash-Sutcliffe the assess to function used objective an additional model. of the hydrological power predictive 34 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA Table 2.2(V Step 4. Step 3. Step 2. Step 1. demand for irrigation are: percolation, etc. Thesteps for calculating water evapotranspiration, deepseepage, evaporation, be meetby rainfall, takinginto account losses to crop-specific water thatcan needsandtheportion water requirements asthedifference between for irrigation.Thismethodology calculates irrigation Heibloem 1986)wasusedto estimate water demand The methodology proposed by FAO (Brouwer and Estimating Irrigation Water Demand m3/s respectively). dam site asobtainedfrom theSWAT model(1and21 this wassetattheaverage annualdischarge atthe discharge for thedam(42.3m3/s). For Dams 3and5, is basedonMMEspecificationofannual average discharge throughout theyear. For Dam 1,thisvalue Design discharge permonth(S estimated as6mm/day onaverage. losses dependingonthetypeofsoil;here Where, PERC isthepercolation and seepage – Pe +PERC +WL SAT Calculate theirrigationwater need:IN=ETO* Kc extracted from the SWAT model. precipitation (P)over thecropping area were Average monthlyestimates ofactual Pe =0.6*P-10ifP<75mm/month Pe =0.8*P-25ifP>75mm/month using theformulae: Calculate for eachmonththeeffective rainfall pattern. and Heibloem (1986)andadjusted to cropping paddy were derived from Chapter 6ofBrouwer pattern andcropping stage: Coefficients for coefficients (Kc) basedonknown cropping Estimate average crop evapotranspiration lands were extracted from theSWAT model. Average monthlyestimates for agricultural Estimate potential evapotranspiration (ETO): D wassetto zero whennotavailable). r i ) wassetataconstant hectare peryear). sediment yield rates perlandcover type(intons per averagedfurther over timeto produce average annual each landcover typeextracted. Thesevalueswere and average sedimentyield rates permonthfor basins above Dam 1were sorted basedonlandcover equation. Asapost-processing step, HRUsinsub- for eachHRUbased onitsapplicationoftheMUSLE The SWAT modelgenerates asedimentyield estimate Estimating SoilErosion Rates irrigation water demand. cultivation permonthwasusedto estimate total using themethodabove, theestimates ofarea under Once demandperhectare hasbeen established fall outside.The explanation for thisbehavior appears peak discharges (especiallyfor theperiodbefore 2009) generally fall withinthe95PPUband,observed 2.5showsplot thatwhile inFigure low andmeanflows calibration parameter. Acloser look atthedischarge is less thandesirable whenusing discharge asthe (=0.73) issatisfactory, however, theP-factor (=0.5) The R-factor obtainedfor thisfinalbatch ofiterations stopped showing significantimprovement (NSE=0.45). carried outusingSUFI-2 inSWAT-CUP untilNSEvalue with dailydischarge asthecalibration variable wer are documented inAppendix2.Batches ofiteration used for thecalibration-validation ofthemodel July 2014 period.The14parameters thatthemodel December 2011 andvalidated over 2012 January to The modelwascalibrated over 2007to January Performance oftheHydrological Simulations 2.7 Hydrological Modeling Results and SAT issetas0mm. rainfall isassumedhere asthesource ofthis a monthbefore sowing ortransplanting. Direct SAT iswater neededto saturate theroot zone December. here is100mmfor monthsofJune and throughout thegrowing season.Value used during transplanting orsowing andmaintained WL iswater neededto establisha water layer VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 35 Dec-11 1-Jul-11 May-11 Source: Authors’ calculations Authors’ Source: 1-Jan-11 Nov-10 1-Jul-10 Apr-10 1-Jan-10 Sep-09 is suitable to carry out the water allocation studies studies allocation carry out the water to is suitable The model supply. hydropower irrigation and for as soil erosion sediment yield might underestimate but without intensity, a function of rainfall are rates this the results, ground-truth datasets to monitored using For of high uncertainty. an area will remain related or design magnitude flood the model for further explore to be advisable studies, it would datasets. This in the precipitation improvement obtaining additional through be achieved could methods or use of statistical data (if available) gauge sensed data with remotely gauge local merge to et al. Verdin (Xie et al. 2011; products precipitation of this project. the scope which was beyond 2015), 1-Jul-09 Best Simulation Mar-09 1-Jan-09 Simulated Aug-08 (B) MONTHLY DISCHARGE DATA OVER CALIBRATION PERIOD CALIBRATION OVER DISCHARGE DATA (B) MONTHLY 1-Jul-08 Observed (A) DAILY DISCHARGE WITH 95PPU PLOT FOR CALIBRATION FOR CALIBRATION DISCHARGE WITH 95PPU PLOT (A) DAILY Feb-08 1-Jan-08 Observed Jul-07 95PPU 1-Jul-07 NSE: 0.62 0 0 Jan-07 1-Jan-07

200 400 200 600 400 800

1000

Discharge [cumess] Discharge Discharge [cumess] Discharge FIGURE 2.5: DATA FOR VALIDATION OF HYDROLOGICAL MODEL FOR VALIDATION FIGURE 2.5: DATA Figure the model fit at both daily 2.6 summarizes for fit The satisfactory and monthly timescales. model SWAT that the current suggests monthly flows to be beyond model parameter uncertainty and to and to uncertainty model parameter be beyond to datasets. The underlying key one of the to be linked data and precipitation gauge between comparison bias the notes above) dataset (outlined ERA5 global dataset in the global rate precipitation in maximum a trade- data. This was gauge local to when compared using the by spatial coverage improved achieve off to suitable was found dataset dataset. The global global as seen in the model flows in capturing average (NSE > 0.5;Figure 2.5). monthly flows for performance 36 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA Mountain PAs can have awater yield ranging from of thewatershed thatfallwithintheCardamom sourceof important areas withelevation. Regions sub-basin level 2.7)indicates aclear (Figure correlation using theSWAT model.Theprojected water yield ata Water yield wasanalyzedfor theperiod2007to 2014 Water Yield from Watershed FIGURE 2.6:RESULTS FROMDAILY ANDMONTHLY CALIBRATION ANDVALIDATION

Simulated Simulated 1000 1000 400 800 200 600 400 800 200 600 0 0 0 0 NSE: 0.47 NSE: 0.45 200 200 CALIBRATION [DAILY DISCHARGE] VALIDATION [DAILY DISCHARGE] 400 400 Observed Observed 600 600 800 800 1000 1000

flows willhave adirect impactonusedownstream. change thatcould disrupt thequalityandtimingof good qualityyear-round supplyofwater. Landcover areas, therefore, are clearly for important securing 100 mm/month onaverage. Theseupstream source upstream source areas hadawater yield exceeding seasonal pattern. For 3ofthe4quarters inayear, the 2-4 timesthedownstream regions, dependingonthe Simulated Simulated 400 400 100 200 300 100 200 300 0 0 0 0 NSE: 0.67 NSE: 0.62 50 50 CALIBRATION [MONTHLY DISCHARGE] 100 VALIDATION [MONTHLY DISCHARGE] 150 150 Observed Observed 200 250 250 Source: Authors’ calculations 300 300 350 400 400 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 37 Source: Authors’ creation Authors’ Source: FIGURE 2.7: AVERAGE WATER YIELD DISTRIBUTION OVER SUB-BASINS AND QUARTERS OVER A YEAR OVER QUARTERS AND SUB-BASINS DISTRIBUTION OVER YIELD WATER AVERAGE FIGURE 2.7: 38 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA This appears to bethecaseindicated by themodel, thus allowing greater water yield indriermonths. lead to higherstorage inthegroundwater layer, 2017). Insome cases,higherinfiltration rates do recharge rates (Portela etal. etal.2019: Filoso is notnecessarily the sameashighgroundwater known to facilitate higherinfiltration rates, this land covers withahealthy soillayer are generally of thewater yield inthemodeldynamics.While months,groundwaterdry stores provide thebulk roleof landcover’s ingroundwater recharge. In in yield islikely linked to themodel’sestimate (lower elevation) sectionsofthebasin.Thisdrop these yields were stillhigherthanthedownstream lower thanthesurrounding forested regions, but Sam Kos Wildlife wasabout4-8percent Sanctuary) to agricultural landinthesource region (within water yield inlandparcels converted from forests 2014)month inthesimulation(January showed that influence. Asan example, water yield for thedriest land cover having asecondarybutstilldiscernible (i.e., more precipitation athigherelevations), with to driver betheprimary ofwater yield inthisbasin Based onthemodelingresults, elevation appears FIGURE 2.8:WATER YIELDDISTRIBUTIONBYSUB-BASINS LINKEDTO THEDAMS ANDTRIBUTARY STPREYKHLONG Above Dam1 Above Dam3 Above Dam5 have alarge impactonwater availability downstream. operating rules ofthesetwo damscanpotentially infrastructure onthewater flow, theset-up and that besidestheregulating effect ofthenatural 5. Theconclusion that canbedrawn from thisis gauging station,followed by thesub-basinfor Dam 1 hasthelargest contribution to theflows atthe of themodel,itisseenthatsub-basinfor Dam works onitsmain stem. From thewater yield results of thePursat withno known majorinfrastructure basin b).StungPrey Khlong isthelargest tributary the damsandgaugingstation(marked assub- e) andtheremaining ofthebasinbetween portion tributaries, StungPrey Khlong (marked assub-basin d, respectively), thesub-basinfor oneofthemain for Dams 1,3and5(marked onfigure asa,c,and Station into 5sub-basins.Theseare: The sub-basin of thePursat River Basinupstream ofBacTrakuon 2.8breaks down in thebasin.Figure theportion comparing thecumulative yield for sites ofinterest Another approach for analyzingwater yield is would build confidence inthisoutcome. although confirmation through ground observations

cub.m of water x 10000000 10 20 30 40 50 60 0

Jan St Prey Khlong

Feb

Mar

Apr

May

Jun Remaining Jul Source: Authors’ calculations

Aug

Sep

Oct

Nov

Dec VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 39 no-forest simulations. The spatial pattern (Figure simulations. The spatial pattern no-forest in a dry month is similar. change yield for 2.11) see a marked would rates sediment yield As expected, the over yield sediment The annual average change. would type was changed land cover where parcels 175 t/ to conditions current for t/ha/year 0.3 from go resulting counterfactual, under the no-forest ha/year Dam for reservoir the into in high sediment inflows the On average, 1 (seen in section c of Figure 2.10). rate that the sediment accumulation model estimates 30-fold. by increase could in the dam’s reservoir year for other vegetated land covers like agricultural agricultural like land covers other vegetated for year of protective The loss dams. the three land use above creating intensity, with high rainfall regions over cover have will likely situations, yield these high sediment Increased impacts downstream. negative numerous reservoir the downstream for sedimentation rates include Others of these. could is the most tangible drop to channels leading sedimentation of irrigation and higher capacity of irrigation water in conveying quality impacting in water drop flood, to propensity for as fisheries, well as usage and industrial household grounds. important breeding are which these streams Source: Authors’ calculations Authors’ Source: The change in seasonal pattern of flows between between of flows in seasonal pattern The change can counterfactual and no forest conditions current The increase be seen in panels a and b of Figure 2.10. during the earlier months of the wet in discharge generate to a higher propensity season indicates land. The rise of the cleared runoff from surface is sharper and the fall is steeper, the hydrograph in dry The drop flow. surface in line with increased to up extending moderate, relatively is season flows and comparing current when flows lower 25 percent Role of Forests in Hydrological Flows in Hydrological of Forests Role FIGURE 2.9: AVERAGE ANNUAL SEDIMENT YIELD FOR SWAT SUB-BASINS SEDIMENT YIELD FOR SWAT ANNUAL FIGURE 2.9: AVERAGE The annual average sediment yield estimate from the the from estimate sediment yield average The annual of the basin still has that the majority model, showed precipitation the As t/ha/year). (<5 erosion of rates low this intensity, rainfall underestimates dataset likely bound of actual or lower an underestimate is likely change cover of land the influence However, erosion. basin is clearly of the region in the upper-western results (Figure with these 2.9). The model identifiable the from change may that sediment yield estimates 20t/ha/ lands to forested for of 0.3 t/ha/year range Sediment Yield and Erosion Rate and Erosion Yield Sediment 40 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA FIGURE 2.11:SPATIAL CHANGESINWATER YIELDUNDERTHENO-FORESTCOUNTERFACTUAL COMPARED TO CURRENTCONDITIONS STATION AND(C)MONTHLY SEDIMENTINPUTFORDAM 1 (A): PERCENTAGE CHANGEINDISCHARGEAT BAC TRAKUONSTATION. COMPARISON BETWEEN(A)MONTHLY DISCHARGEHYDROGRAPH FORBAC TRAKUON FIGURE 2.10:COMPARISON OFCURRENTHYDROLOGICALFLOWS TO THOSEOFNO-FORESTCOUNTERFACTUAL Source: Authors’ calculations Discharge (cumecs) % Change in discharge 100 150 200 250 -50 50 100 150 200 250 300 0 50 0

Jan 2007 Feb Jul

Current Mar

Apr Jan

May 2008 Jul Jun No Forrest Jul Jan Aug

Sep 2009 Jul

Oct

Nov Jan

Dec 2010 Jul 2010 Jan Dam1 sediment ionput (ton) x 10000 400 800 900 200 300 600 700 100 500 0 2011 Jul Jan

Feb Jan

Current Mar

Apr 2012 Jul

Source: Authors’ calculations May

Jun Jan No Forrest Jul 2013

Aug Jul

Sep

Oct Jan

Nov 2014 Jul Dec VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 41 outflow outflow DAM 3 DAM inflow inflow inflow Source: Authors’ calculations Authors’ Source: 0 0 40 40 60 20 60 20 50 10 50 10 70 30 30 outflow outflow months but is not large enough to have a major impact a major have enough to is not large months but other hand, receives 5, on the Dam downstream. small too is capacity storage its but flows, significant inflows Consequently, flow. the significantly alter to (Figure nearly identical dam 5 are from and outflows capacity both the storage have to 1 appears Dam 2.12). on water a significant impact to have and the inflows at Bac availability The water downstream. availability the operations to Station will be sensitive Trakuon the representation this dam, so improving set for rules future be a priority for should of this dam in the model operations, Under current of this work. iterations the specified match to only managed the discharge about half of the time. of 42.3 m3/s monthly target DAM 2 DAM inflow inflow 0 0 4 4 2 2 6 6 1 1 5 5 3 3 outflow outflow DAM 1 DAM inflow inflow 0 0 80 80 40 40 20 20 60 60 120 120 100 100 140 140 Dam 3 only controls a small portion of total flow. flow. a small portion of total 3 only controls Dam satisfy to just enough storage have to It appears vicinity during dry irrigation demand in its local With 62 percent of the water yield originating in originating yield of the water With 62 percent and dam operations of them, sub-basins upstream availability the water can significantly alter storage 3.2, current in Section As indicated downstream. and hence is incomplete about the dams information is applied. model monthly dam operations a simple Monthly dam operations Monthly Water Availability and Demand Availability Water FIGURE 2.12: COMPARISON OF INFLOWS AND OUTFLOWS FROM EACH DAM OPERATIONS UNDER CURRENT CONDITIONS AND UNDER OPERATIONS FROM EACH DAM AND OUTFLOWS OF INFLOWS FIGURE 2.12: COMPARISON THE NO-FOREST COUNTERFACTUAL 42 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA SELECTED YEARS FIGURE 2.14:COMPARISON OFESTIMATED WATER DEMANDANDESTIMATES OFWATER AVAILABLE AT BAC TRAKUONSTATION, stream routing. Butgiven themonthlytimescale and discharge andwe therefore donotconsider effects of water yield inthesesub-basinsisequalto monthly requires thesimplifyingassumptionthatmonthly total water availability atthatgaugingstation.This Bac Trakuon gaugingstation inorder to estimate water yield from sub-basinsbelow thedamandbefore Outflow from Dams 1,3and5isaggregated withthe FIGURE 2.13:EFFECTOFDAM OPERATION ONPROJECTEDWATER AVAILABILITY, SELECTEDYEARS

x 10000000 x 10000000 x 10000000 x 10000000 20 40 60 80 20 40 60 80 80 60 20 40 80 60 20 40 0 0 0 0 Jan Jan Jan Jan Feb Feb Feb Feb Estimated Demand Estimated Demand Mar Mar Mar Mar Natural flow Apr Apr Apr Apr May May May May Jun Jun Jun Jun 2009 2011 2009 2007 Jul Jul Jul Jul Water availability(Damoperational) Water availability(Damoperational) Water availability(Damoperational) Aug Aug Aug Aug Sep Sep Sep Sep Oct Oct Oct Oct Nov Nov Nov Nov Dec Dec Dec Dec the gaugingstationchanges dueto damoperations. 2.13assumption. Figure shows how water availability at model andremove theneedfor thissimplifying simulation to beincluded withinthehydrological more complete damdatawillallow damoperation percent onaverage (seeAppendix3).Ideally, useof is generally low. Intest conditions, thiserror was1.01 relatively stream short distance, theintroduced error

x 10000000 x 10000000 x 10000000 x 10000000 80 60 20 40 20 40 60 80 20 40 60 80 80 60 20 40 0 0 0 0 Jan Jan Jan Jan Feb Feb Feb Feb Estimated Demand Estimated Demand Natural flow Mar Mar Mar Mar Apr Apr Apr Apr May May May May Jun Jun Jun Jun 2012 2010 2008 2010 Water availability(Damoperational) Jul Jul Jul Jul Water availability(Damoperational) Water availability(Damoperational) Aug Aug Source: Authors’ calculations Source: Authors’ calculations Aug Aug Sep Sep Sep Sep Oct Oct Oct Oct Nov Nov Nov Nov Dec Dec Dec Dec VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 43 Dec Nov Source: Authors’ calculations Authors’ Source: Oct Sep Aug MAXIMUM DEFICIT DEFICIT AVERAGE Jul (Jan 2007- July 2014) and the daily model fit, even even and the daily model fit, July 2014) (Jan 2007- the a published model for to though comparable as a accepted the range was below same region, data is in precipitation fit. Improvement “good” these model results; improve to key likely of any data: Absence Lack of sediment yield scale sediment data – either at the plot monitored soil gauging stations or local or at downstream that could results sediment yield to maps, leads Although measurements. real to not be compared the values used by to close are the estimates 2. Irrigation demand deficit Irrigation and availability water of estimated The results the economic the inputs for irrigation demand form chapter. in the next continue analysis, which will period, demand exceeded simulation the 7-year Over in February often times, most supply multiple simulation) the 7-year over and June (5 instances the 7-year over and sometimes in January (twice each). The (once July and August simulation), May, magnitude of deficit is plotted and maximum average and February the frequency, Matching in Figure 2.15. January while deficit, the highest average June have deficit when normalized has the maximum-recorded under irrigation. area by Jun May Apr Mar Feb Jan 0 25 75 50 100 Model fit: The total period of data for which the total period of data fit: The Model was short and validated be calibrated model could 1. The main limitation and caveats in the modeling The main limitation and caveats the data either from this study, used for approach under-lying assumption in model or from perspective the alongside largely been explored have setup, limitations the key In summary, in Section 2.7. results analysis are: the hydrological to linked and caveats 2.8 Limitations of the Analysis FIGURE 2.15: ESTIMATED IRRIGATION WATER DEMAND DEFICIT UNDER CURRENT CONDITIONS WATER IRRIGATION FIGURE 2.15: ESTIMATED Over the simulation period, a spatially-averaged time period, a spatially-averaged the simulation Over values evapotranspiration and series of precipitation the hydrological from lands is extracted cultivated over requirement. irrigation estimate model as an input to varies estimate requirement water This season-specific year, to year and to month month significantly from 453 mm/month/ha, to 5.8 mm/month/ha from ranging mm/ of 273.4 irrigation requirement with an average irrigation demand for of total month/ha. A time series the combining by per month was estimate water with the estimate requirement monthly per hectare Figure 2.14 above. under cultivation derived of area demand with the water the estimated compares below Station. at Bac Trakuon available of water estimates Estimating irrigation water demand water irrigation Estimating 44 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 4. 3. TABLE 2.4SUMMARY OF MAINPROJECTEDHYDROLOGICALIMPACTS OFLANDUSECHANGEINTHE PURSAT RIVERBASIN peak flows Upstream deforestation on floods/ sediment output Upstream deforestation on low flows upstream onwater yieldduring Establishment ofagriculture yield duringlow flows Upstream deforestation onwater Impact of to facilitate higherinfiltration rates, thisisnot covers withahealthy soillayer are generally known groundwater recharge: Asnoted earlier, while land Caveat onlinkbetween shallow infiltration and advisable inafuture iteration ofthiswork; step andinto thehydrological modelwould be Moving thesedamsfrom apost-processing improvement through stakeholder interaction. and addedasapost-processing step to facilitate were represented by simplifiedoperation rules to incorporate inthemodels.Consequently, dams its design,damoperations rules were notavailable been constructed yet andlimited dataavailable on Partially becausethemaindam (Dam 1)hasnot Caveat oncharacterization ofdamoperation: shown alarge variationinthis estimate; hydropower dam–otherstudiesintheregion have inplanningthe ofMinesandEnergy(MME) Ministry Level (uncertainty) Mid to low impact (high uncertainty) (high uncertainty) (low uncertainty) (low uncertainty) High impact High impact High impact occurring inthe Pursat River Basin. analysis whenconsidering theimpactofchanges summarizes themainoutcomes from thehydrological (to continue inthenext chapter). Table 2.4below analysis ofthehydrological ecosystem services counterfactual willbeused as inputsfor theeconomic from boththecurrent conditions andnoforest as well asthewater availability/demand results The erosion rates estimated for different landuse ofKey2.9 Summary Results etc., have notbeensurveyed (dataconstraint). the extent andstate ofaquifers, recharge areas, constraint).(disciplinary Additionally, inthisregion, hydrological modelsgenerally remains poor rates. Ourabilityto represent thisdynamicin necessarily thesameashighgroundwater recharge increase, butthetrend isrobust. will notbelike the100percent to 150percent discharge inrainy season.Theactualmagnitude however, itdoesconfirm apattern ofhigher The noforest counterfactual isnotrealistic, be likely linked to this. the year (ifnotaninstrumentation error) could discharge from 2014onwards for first quarter of significantly. The“no-flows” in recorded land useabove Dam1could divert low flows the region beingconverted to agricultural Based onestimates ofirrigation water demand, Comments/Explanation magnitude. the sedimentoutputbyatleast oneorder of parcel deforested, could for aperiodincrease validation. Theresults doindicate thateachland is largely modeled figures without real-world Monitored sedimentdata isunavailable, sothis contributing to highuncertainty. groundwater drainage ispoorinthemodel, the information onaquifer extents and and rainfall patterns thanlandcover. However, Water yieldmapscorrelate more to elevation 3 MONETARY VALUATION OF HYDROLOGICAL SERVICES

3.1 Overview VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA

The annual water deficit estimated in the hydrological analysis was used to estimate the forgone agricultural revenue based on area under cultivation. This information, in combination with additional data on crop yield and production cost was used to estimate the economic value of water. Detailed methods for calculating unit monetary value of water for irrigation are described under section 2.1. Soil erosion and sediment deposition in the reservoirs were similarly quantified using different deforestation scenarios and the estimates were used to calculate reduction in water storage and resulting changes in hydro energy production. The monetary value of water for hydro energy production was estimated using the methods described in section 2.2. All the modeling and analysis was done using standard Python programming libraries and MS Excel. Overall objectives are the following: • Estimating impact of upstream forest cover on water supply in monetary terms; • Measuring long term impact of sediment erosion on hydro dam capacity; • Estimating monetary value of sediment retention by upstream forests and avoided hydropower loss due to sediment deposition).

Central Phnom Penh City in Cambodia 45 46 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA farm types. different across farmtypes.(c)Total variable cost wasestimated to bearound US$600 perha rice productionmuch according anddonotvary to farms are bigger thantraditionally cultivated farms.(b)Theyield ofrice across farmtypesfallsbetween 3-4tons/ha. Yields are notsignificantly 13 (a)Average farmsize(cultivated areas) isabout 3ha,withlarge farmshaving >6haandsmaller farms<1ha. Onaverage technologically improved this sizedifferences madetheoverall average larger. 12 <1haisfor smallfarmsonly, and2-4haisaveraged across allsmallandbigfarms.Althoughthe numberoflarge farmers iscomparatively smaller, of agiven inputisinferred from otherinputsto takes aresidual valueapproach, where thevalue Net Return to Water, NetIncome, etc. Eachvariant Residual ImputationMethod (RIM),Net-back Analysis, methodology known by different names,suchas approach. There arefunction” afew variantsofthis The mostcommon approach isthe“production 2008; Mesa-Jurado etal.2010; Berbeletal.2011). irrigation have beenproposed (Speelmanetal. for valueofwater estimating themonetary for Several methodological frameworks andtechniques Valuation ofWater inIrrigation US$64 thousand peryear willbeunder threat. deforestation of1percent aproportionate valueof continues at0.25 percent. Inanaccelerated per year isthreatened ifcurrent rate ofdeforestation estimated value ofirrigationbenefitsUS$16 thousand The economic analysisshows thatoutofthetotal the overall water availability ineachmonth. series isrecombined usingarea asweights to estimate each landcover known, themonthlywater yield time agricultural usage thefollowing year. Witharea under vegetation (barren) for thatyear andbecomesof part agricultural, any deforested plot remains without of theprocess offorested landbeingconverted to cover typeiscalculated. Itisassumedthataspart considered inthescenario, thearea under eachland Barren Basedondeforestation andOthers. rate monitoring station,namelyfor: Forest, Agricultural, derived for 4landcover typesabove BacTrakuon response curves(cub.m per hectare permonth)were spatially andtemporally averaged monthlywater yield both current conditions and no-forest counterfactual, From the7-year hydrological simulationresults from Deforestation Scenario for Irrigation 3.2 Methodology (Figure 3.2). (Figure during thewet season,usingtraditional techniques size isless than1ha)andthey tend to grow rice only 3.1).wet season(Figure Most farmsare small(average 4 haofrice seasonandabout2hainthe in thedry In thePursat River Basin,theaverage farmcultivates Farm characteristics services andirrigation. cultivated area, yield, inputcost, laborcost, cost of range offinancialandfarmcharacteristics such as used andseasonality. Thedatacollected include a were disaggregated according to farmsize,technology focus group discussionsandkey informants. Data districts, communes andvillages) incombination with (drawn from arandom sample stratified by provinces, using astructured survey ofindividualfarmers collected dataonarange ofagricultural products to valuewater for irrigationservices. Thissurvey held between 2012 and2013 (World Bank2015) We useddatacollected inanation-wide farmsurvey outputs andcost ofnon-water inputs. water would bethedifference between thevalueof of allnon-water inputsisknown, the shadow price of costopportunity ofallinputs.So, cost ifopportunity commodity (i.e. outputXprice) isexactly equalto the that inaperfectly competitive market thevalueofa amount iscompletely exhausted. Theassumptionis costthe opportunity ofallinputs,untilthetotal In RIM,thetotal valueofaproduct isdivided into Water SEEA-Water (UNSD2012). System ofEnvironmental-Economic Accounting for discussed withcasestudiesandexamples inthe production. Many ofthosevariants were extensively three season(25,000ha). timeshigherthaninthedry production inthewet season(78,000 ha)ismore than and usemodern techniques. Thetotal area under rice more likely to grow under both wet seasons anddry 12, 13 Large farms,ontheother hand, are VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 47 Small Wet Modern Overall Source: Authors’ calculations Authors’ Source: Source: Authors’ calculations Authors’ Source: Farming system Farming Cost of production Dry Traditional Average variable cost of production Average Large 0 0

700 600 500 400 300 200 100 $/ha 200 100 600 500 400 300 $/ha Traditional Wet Small studies (Srean et al. 2018). Under current condition condition current Under et al. 2018). studies (Srean cultivation is US$40.7 rice from value added total million). US$89 income million (gross values Unit monetary using the RIM estimated The unit value of water the higher 0.05-0.09 US$/m3, from ranges approach dry cultivation. These values being for season rice in other studies estimated within the range values are the economic (Hussain et al. 2007). Correspondingly, season wet for 175 US$/ha from ranged water to return 3.1). dry (Table for season rice US$/ha 311 to rice Overall Farming system Farming Average yield Average Modern Average paddy yields Average Dry Large

5 4 3 2 1 0 t/ha

1.0 0.5 1.5 .00 4.0 3.5 3.0 2.5 2.0 t/ha Small Wet Traditional Overall Farming system Farming Average area Average Modern Dry Large

Average area of rice cultivated per farm area Average

2 1 3 0 6 5 5 4 4 3 1 0 4 2 ha ha Total variable cost was estimated to be around be around to was estimated cost variable Total per per ha in the dry season and US$510 US$696 is primarily season. This difference ha in the wet higher inputs use. Because of this high cost due to low are dry season returns farmers, of production in other as also noted higher yields, the despite Dry season rice cultivation has higher yields (4.5 tons/ cultivation has higher yields Dry season rice a difference season (3 tons/ha), ha) than in the wet Kobayashi by other studies (Lee and also confirmed in the dry season is generally High productivity 2017). seeds and the use of high-yielding to attributed irrigation management. better FIGURE 3.2: KEY CHARACTERISTICS OF FARMING SYSTEMS FIGURE 3.2: KEY CHARACTERISTICS OF FARMING FIGURE 3.1: PADDY RICE PRODUCTION DATA, BY SEASON DATA, RICE PRODUCTION PADDY FIGURE 3.1: 48 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA with adeforestation rate of1percent perannum 0.25 percent perannum(businessasusual)andon relevant scenarios, onewithadeforestation rate of HEP production. We alsoexamine two policy- us to valuetherole offorest asawhole inprotecting hypothetical no-forest counterfactual, whichenables As before, we compare current land cover to a which depend onlandcover intheupperwatershed. The rate ofsedimentationdepends onerosion rates, FIGURE 3.3:METHODOLOGICALPROCESSFORVALUATION OFHYDROLOGICALSERVICES USEDFORHEP of sedimentationonthecapacityreservoir, (HEP) production was estimated basedontheeffect The economic return to water for hydroelectric power Power Production Valuation ofSedimentImpacts onHydroelectric TABLE 3.1:VALUE OFWATER ASANINPUTTO PRODUCTIONINDIFFERENTFARMING CATEGORIES sediment delivery toreservoir) (land cover ->erosion -> Erosion rate US$/m3 US$/ha Unit Reservoir vol.

trapped att at timet-1 Sediment Small 0.089 185

on storage att Reservoir vol.based Reservoir vol. Large 0.075 productivity 261 at timet

Water

Traditional categories

Farm 0.069 242

capacity. Inany year t,thereservoir volume V sedimentation rate andhow itaffects reservoir The process by ofvaluationstarts estimatingthe values indicatingtheimpact. no deforestation, thedifference between eachpair of impacts to thosethatwould beexperienced under model wasruntwice, comparing thesedimentation (high deforestation). Ineachcase,themathematical value terms rather thaninannualterms. over time.Therefore, results are presented inpresent problem, itsimpactissmallinitially, butincreases Note thatbecausesedimentationisacumulative electricity. Theapproach isdepicted 3.3. inFigure which inturnaffects thedam’sabilityto generate Electricity Electricity produced electricity Piece of value

Modern 0.063 220

time t,interest i PV ofrevenue at Revenue 0.089 Dry 311

Source: Authors’ calculations

Source: Authors’ creation Value (NPV) Net present for Tyears Sum ofPV 0.05 Wet 175 t was

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 49

Baseline Baseline 400 million 0.25 0.04 0.25 0.3 forested 20 other land use land 175 barren 6 0.47 100 90 percent 1.2 A rent in this case is the residual value, value, is the residual in this case A rent 15 calculated as the surplus generated by producing producing by generated as the surplus calculated of inputs. However, the cost above one unit of HEP, and other cost as data on energy production however, the study site, for available inputs are on the consumer based the unit value was derived assuming /kwh) and (US$0.25 of electricity price US$0.04/kwh. of production cost an average the calculating for assumptions several made We Key HEP production. for value of water economic demand water supply, water were data required in biophysical described (estimates and soil erosion (such data on dam parameters Additional chapter). capacity, electricity dam storage, price, as electricity (2013). MOWRAM from collected were dam lifetime) parameters modeling key provides table The following and assumptions. in the SEEA-EEA methodological guidelines was guidelines methodological in the SEEA-EEA used. ) in t ) was Unit Kwh/y US$/Kwh US$/Kwh percent t/ha/y percent Kwh/m3 years percent g/ml t 14 - Sed of water; Miglietta et al. 2018) and of and 2018) Miglietta et al. of water; 3 t-1 Assumptions Electricity capacity Electricity Electricity price price Electricity Electricity cost of production cost Electricity Deforestation rate Deforestation Erosion rate Erosion Discount rate Discount Water productivity of electricity productivity Water Time frame Sediment trapping efficiency Sediment trapping Soil bulk density = V t that year. Sediment loads estimated by the SWAT model (in tons) were converted to a volume equivalent (m3) using a constant bulk density of 1.2 g/l. (m3) using a constant equivalent a volume to converted were model (in tons) the SWAT by estimated 14 Sediment loads or thermal sources, energy, such as diesel, renewable that of other energy sources HEP to the cost compare be to would approach 15 An alternative available. used if HEP was not would that firewood, TABLE 3.2: KEY ASSUMPTIONS USED IN VALUATION OF HEP 3.2: KEY ASSUMPTIONS USED IN VALUATION TABLE This reservoir volume at time t was used to was used to at time t volume This reservoir generated amount of electricity total estimate of the water using an estimate that year for kwh produced (i.e. of electricity productivity per m V estimated by reducing the previous year’s active active year’s previous the reducing by estimated (Sed deposited of sediment the amount by storage To calculate a unit monetary value of water for HEP for a unit monetary value of water calculate To proposed approach Rent the Resource production, the unit value of electricity. This process was This process the unit value of electricity. (T) with dam lifecycle a 100-year for repeated and soil cover in forest changes corresponding value (NPV a net present Finally, erosion. (i) of 6 percent. rate using a discount estimated 50 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA TABLE 3.3:EFFECTOFLANDCOVER CHANGEONVALUE OFHEP protects thesoilfrom erosion. Intheabsence of The presence offorests inthePursat River Basin Operators Economic Value ofEcosystem Services to Hydropower time horizon,discounted at6percent, isUS$28 million. present value ofthisbenefitstream over a100-year than they would beintheabsence offorests. The are thusbetter offby atleast US$1.6 millionperyear Basin, farmers intheirrigated areas inthe lower basin Thanks for the presence offorests inthePursat River estimated for lackofdata. distribution canals.However, thesecosts could notbe in theirrigationsystems, assedimentwould clog of forests would alsoincrease maintenance costs irrigation. Increased sedimentationintheabsence ability ofthedamsto regulate theflow ofwater to estimated atUS$1 millionperyear, by reducing the losseserosion to would farmers, causefurther Moreover, intheabsence offorest, increased soil million ayear. River Basinmakes farmers better offby US$0.6 In otherwords, thepresence offorests inthePursat production would beUS$0.6 millionperyear lower. without forests thetotal valueofirrigated crop with forests thanitwould bewithoutthem.Indeed, As described above, water availability isbetter with thatunder ahypothetical no-forest condition. by comparing water yield under existing landcover water suppliedby theCardamom forest ecosystems The hydrological modeling calculated thequantityof Economic Value ofEcosystem Services to Farmers 3.3 Results Note: Present value ofreduction invalue ofHEPcomputed over 100years withadiscount rate 6percent. Reduction invalue ofHEP(US$million) Change inreservoir capacity (%) Business asusual deforestation (0.25%/year) US$0.17 million). million (equivalent to anannualcost ofabout in present valueofelectricity production ofUS$2.8 decline to US$30 millionin100years -areduction 1 percent ayear, theannualvalueofelectricity would with nodeforestation. At ahighdeforestation rate of electricity production would beUS$0.8 millionthan years, however, the reduction inpresent valueof 100 years. Asmostofthelosses would come inlater would decline from US$76 millionto US$58 millionin (0.25 percent ayear), theannualvalueofelectricity but more slowly. At current rates offorest loss Gradual deforestation would have thesameeffect, US$1.1 million. This isequivalent to anannualbenefitofabout Basin by US$18.2 millionover thereservoir’s lifetime. forests increases returns to HEPinthePursat River than itwould bewithforests. Thatis,thepresence of electricity production would beUS$18.2 millionlower 65 years. Inpresent valueterms, thevalueof about US$76 millionayear to almost nothingafter value ofelectricity production would decline from ability to generate electricity. Withoutforests, the This reduction incapacitywould, inturn,reduce the would bereduced by more than60percent. higher annualdeforestation rate of1percent, storage 23 percent by theendofits100-year life cycle; ata 0.25 percent, reservoir capacitywould bereduced by affected. Withcurrent annualdeforestation rates of fill more slowly, butthey would stillbesignificantly increase more slowly andsothereservoirs would gradual deforestation scenarios, theerosion would generation injust65years (Table 3.3).Under the of Dam 1would lose allitscapacityfor electricity forests andtheirsoilretention role, thereservoir 0.8 23 High deforestation (1%/year) 2.8 61

counterfactual 100 (65years) No-forest 18.2

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 51 Limitations/Caveats limitations, a number of is subject to This study Some of these availability. data particularly to due being areas problem in entire limitations result the analysis. Others (such as limited from omitted reliability the data) affect and sediment load rainfall these Resolving modeling. of the hydrological and more precise both more to lead would problems estimate used to Some of the data estimates. reliable some years was collected the value of irrigation conditions. As not fully current may and ago reflect the true value underestimating are the results noted, value data the estimated so with better of services, increase. almost certainly would limitations. also some methodological are There by is met production rice paddy for demand Water but the example, for water, and ground both surface Although water. on surface solely analysis focuses infiltration, water in ground a role play ecosystems ecosystems, by regulated is directly water surface of model A simple of this study. which is the focus model sophisticated is used; a more dam operations in ensuring the dam’s role capture better would The analysis irrigation and HEP. supplies for water a marginal value, for value as a proxy uses average Determining scale. to return assuming a constant to as this needs exercise, a difficult is scale to return and each each crop empirically for be determined scale to return a constant simplify, to Therefore, site. is assumed in this analysis. a simplified is clearly scenario The deforestation an initial rough but is helpfulapproach provide to of seasonal water loss continued of likely estimate to main caveats time. Two over service regulation that the method: are the results alongside note, point in the basin, at any yield, (1) assumes water within downstream as discharge available becomes the spatial variability of the same month; (2) ignores the lands, above the agricultural Even yield. water altitude lower on comparatively gauging station, are water average lands and so any than the forested lower will also be biased by derived curve yield Of course, this value would not be lost all at once. all at once. not be lost this value would Of course, to both farmers benefits deforestation, With gradual with decline, gradually would and HEP producers on of this impact dependent rapidity and the extent also be stressed It should of deforestation. the rate within the forests only applies to that this estimate Basin, which is only one of the 42 River the Pursat Tonle-Sap Mountains in the Cardamom watersheds of the Cardamoms in the rest basin. The forests This study substantial benefits. also generating are that could framework a methodological provides of the Cardamom in other watersheds be replicated in Cambodia. or elsewhere Mountains, This estimated value is an underestimate for two two for value is an underestimate This estimated not include First, value does reasons. the estimated to likely which are change, of climate the effects in the be suffered that would the damage exacerbate result to is likely change Climate of forests. absence and in higher temperatures, rainfall intense in more and reduce erosion increase to tend which would total water even and probably dry season flow of the role these conditions, Under availability. important. Second, more even become would forests some aspects not include value does the estimated provide. that forests services of the hydrological that costs in maintenance the savings example, For are generates service reduction erosion the forests’ in flood and neither is the reduction not included, benefits are these Again, provide. risk that forests important with climate more even become to likely the carbon section examines (the following change provide). forests benefits that sequestration The analysis shows that forests in the Pursat River River in the Pursat that forests shows The analysis dollars, million US$46 a value of at least Basin have value of the services based on the net present The main irrigation and HEP. to provide that they in the farmers the are forests beneficiaries of these area a greater irrigate to able plain, who are Pursat as the as well no forests were if there would than they are who also their customers) (and so, HEP producers electricity. more produce to able 3.4 Summary 52 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA models as this field of study further further develops.models asthis field ofstudy and consequently helprefine themethodsand of thecharacterization ofthecurrent model this study)willfirst likely lead to improvement in data(aspersomeoftherecommendations in monitoring programs. Goingforward, improvement is, atmany times, hard to obtainfrom existing – however, datarequired to runthesemodels, are continuously beingdeveloped andrefined that improve therepresentation ofvegetation parameterization. Newphysically-based models relevant processes inthemodel aswell astheir the rigor ofmathematicalrepresentation ofthe outputs derived for thenewstate are reliant on the model inthenew(noforest) conditions, the states), aswell asunavailability ofdatato validate be metby many possible combinations ofinput potential output-inthiscase,basindischarge -can conditions, however, dueto equifinality(where the study, SWAT wascalibrated andvalidated for current changes inlandcover andhydrologic variables. Inthis of thehydrological model to reliably linklarge One ofthekey limitationsofthestudy istheability than impactoflandcover alone. precipitation rates oftheagricultural lands,rather considered inscalingup. incentives etc.) therefore needto becarefully demand, supply,uncertainties (e.g.future policy, in ourcase),discount rates andotherassociated into consideration along timehorizon(100years economic value. Furthermore, andasvaluationtakes of hydropower hasoneofthelargest impactson cases ofHEP, thedetermination oftheunitvalue on downstream ecosystem servicesassessment.In of measuringimpactsupstream landmanagement available part inouranalysisbutitisanimportant maintenance cost ofirrigationchannelswasnot chosen inscalingupefforts. Similarly, sediment employment thisneedsto opportunities, becarefully labor cost variesalot, depending onlocation and highly sensitive tocost opportunity oflabor. Since is derived from aresidual valueapproach thatis locations. Anexample istheunitvalueofwater that different level ofoutcomes atdifferent scales and assumptions andinputschoices thatwillhave Specific to economic analysis, we made several made andinputsusedinto biophysical modeling. is naturally sensitive to underlying assumptions services. Therefore, theoutcome ofeconomic analysis analysis andphysical quantificationofecosystem Economic analysisistightlyinterlinked to biophysical 4 CARBON VALUATION 4.1 Background

Carbon storage in forest ecosystems is globally significant because it reduces greenhouse gases (GHG) in the atmosphere and reduces the warming effect. Cambodia is one of the many signatories to the Paris VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA Agreement, which states that “Parties should take action to conserve and enhance, as appropriate, sinks and reservoirs of the GHGs … including forests” (UNFCCC 2015). Cambodia’s Nationally Determined Contribution (NDC) contains explicit commitments to reducing GHG emissions through forest conservation and restoration. Enhancing storage and sequestration of carbon in forest ecosystems in Cambodia is a priority of the Royal Government of Cambodia (RGC) (NCSD 2019).

The analysis in this chapter focuses on the carbon storage ecosystem service. The value of carbon in forests is determined through the potential benefits for human well-being that come from minimizing the stock of carbon in the atmosphere where it can contribute to global warming.16

Aerial shot of the Cardamom Mountains, Cambodia. © Conservation International/photo by David Emmett

16 Notwithstanding the lack of consensus among practitioners about whether carbon storage should be considered an ecosystem service determining the value of carbon storage is useful for building consensus on the value of forest ecosystem services. See discussions on carbon storage as an ecosystem services in Keith et al. (2019). 53 54 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA TABLE 4.1:LANDCOVER INTHEPURSAT RIVERBASIN, 2016 mapping 5ha(MoE 2018). and non-forest were in9categories withminimum in whichforest classesthatfell under13categories land cover wasgenerated with22categories ofcover, covering 25capital-provinces nationwide. The2016 land use/cover classificationwith1651 verified points and images from Google for Earth verification of well asfrom datafrom RapidEye, SPOT5, Sentinel-2 satellite images from October 2015 to May 2016, as MoE. Forest cover wasdetermined from Landsat8 Table 4.1, basedonofficialdataobtainedfrom the Land cover inthePursat Basinin2016 isshown in Land Cover disturbances (Keith etal.2019). use andregime ofnatural andanthropogenic determined by theenvironmental conditions, land The average carbonstock ofanecosystem is 4.2 CarbonPool andStocks Evergreen forest Land cover Deciduous forest Total Rock Built-up Area Sand Rubber plantation Forest regrowth Water Bamboo Grassland Village Flooded forest Wood shrub Semi-evergreen forest Paddy field Cropland Area (ha) 596,060 242,989 100,903 12,337 53,223 66,812 93,453 1,132 1,490 1,788 2,324 4,053 7,033 7,033 536 894 60 sample. estimate 95percent confidence intervals ofthe inventory wasusedto calculate carbonstock and (roots); deadwood; andwood products. Abiomass above ground biomass(trees); below ground biomass carbon poolsincludedinthismethodology are: (VCS) methodology VM0015 (Pedroni 2012). The general requirements oftheVerified CarbonStandard 2013). FFIdetermine carbon pools basedonthe Cardamom Protected Area (Kempinski andRamos ofaREDD+feasibilityas part studyfor theCentral conducted by Flora andFauna International (FFI) Data oncarbonpoolsisdrawn from analysis Estimating Carbon Stocks East Asiabasedonseveral studies. determined an average carbonpoolfor mangroves in ha wasdrawn from Kauffman andBhomia(2017) who of thecarbonpoolfor mangrove forest of1,094tC/ 172 tC/ha(Pedroni 2012) (seeTable 4.2).Anestimate and Yoshimoto (2010), whichsuggests astocking of and forest types;includingthosereported by Sasaki with previous carboninventories for similarareas 17 Thesefigures were found to be comparable Percent oftotal 100.0 40.8 11.2 15.7 16.9 0.0 0.1 0.1 0.2 0.2 0.3 0.4 0.7 1.2 1.2 2.1 8.9 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 55 308 73.7 94.0 83.9 Deciduous Source: Authors’ calculations Authors’ Source: Deciduous forest 507 109.7 166.7 138.2 Semi-evergreen 593 To obtain the total value, these quantities are then value, these quantities are obtain the total To the unit value of carbon emissions.multiplied by be used depend on whetherThe unit values to the national or from the value is being considered Carbon emissions resulting perspective. the global by world the entire affect would deforestation from in the atmosphere GHG concentrations to contributing efforts Various change. climate global to and hence of the damage the cost estimate made to been have emissions. The incremental caused by be that would of a range has prepared example, Bank, for World These of Carbon (SVC). of the Social Value estimates and deciduous forest types. The total estimated forest forest estimated types. The total and deciduous forest in Figure type is shown 4.1. each forest for carbon stock 140.3 183.0 161.7 Evergreen Semi-evergreen forest Semi-evergreen Evergreen forest Evergreen 0 20 40 80 60 120 160 140 100 Note: C to CO2e is determined with a conversion factor of 3.67 factor a conversion with CO2e is determined C to Note: 2012. Pedroni Source: Lower Limit (t C/ha) Lower Upper Limit (t C/ha) (t C/ha) Average (t CO¬2e/ha)* Average There are two options for estimating the value options for two are There provided services ecosystem of carbon storage The Mountains. in the Cardamom the forest by of carbon stored stock the entire to value is first when this option is appropriate in these forests; as an asset. estimating the value of these forests in value the change is to approach The second or the deforestation, current from resulting stock reforestation; from result that would sequestration policy relevant. is more this approach Annual Carbon Value Carbon Annual FIGURE 4.1: CARBON STOCKS FOR MAJOR FOREST TYPES IN THE PURSAT BASIN FOR MAJOR FOREST TYPES IN THE PURSAT FIGURE 4.1: CARBON STOCKS Carbon stocks for the forest assets in the Pursat River River assets in the Pursat the forest for Carbon stocks semi-evergreen evergreen, for estimated Basin were TABLE 4.2: CARBON STOCKS BY FOREST TYPE BY FOREST 4.2: CARBON STOCKS TABLE 56 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA would becorrespondingly smaller. 18 Thispayment would becontingent onreducing deforestation to zero. Should deforestation reduced, beonly partially thepayment to thecountry TABLE 4.3:ESTIMATED CARBONEMISSIONSFROMDEFORESTATION INTHEPURSAT RIVERBASIN avoided deforestation inthePursat Basin,theresulting Basin. Note that asthere isnoERPA inplace for of thevalueforest carbonstocks inthe Pursat projects andcan beusedto provide afirst estimate tCO2e isappliedby theGreen Climate Fundfor REDD reduction payment agreement (ERPA). AvalueofUS$5/ such asitcould realistically receive underanemission perspective, thestocks should bevaluedatprices (that is,for avoiding emissions).Thus,from Cambodia’s country receives compensation for maintainingthem perspective, thesestocks have concrete valueifthe these specificemissionsissmall. From Cambodia’s climate change, thecontribution to climate change of though Cambodiais,ofcourse, heavily threatened by emissions to Cambodiaitselfismuchsmaller: Even 2050 (World Bank2017). However, thevalueofthese of US$75/tCO2e in2017 risingto US$156/tCO2e in rising to US$78/tCO2e in2050andahighestimate range from alow estimate ofUS$37/tCO2e in2017 Forest type * Avg. over 10years (2016-2025) deforestation rates ofthedifferent forest types. Notes: Thisanalysis assumes thesamedeforestation rate for allforest types.Inreality, there maybesomedifferences inthe Total Deciduous Semi-evergreen Evergreen 2016 forest cover (ha) 397,115 100,903 242,989 53,223 about US$2.5 million could benegotiated. Pursat watershed to zero, anannualpayment of program thatwould reduce deforestation inthe estimates). Ifthere wasanemissionsreduction yr ifvaluedattheSVC (average ofhighandlow ERPA prices ofUS$5/ tCO2e andofUS$19 million/ value ofemissionsisUS$2.5 million/yrifvaluedat percent annualdeforestation rate, theestimated every year inthePursat Basin. At thecurrent 0.25 About US$2.5 millionincarbon value islost of US$7.5 billion ifvaluedattheSVC. River BasinisUS$1 billionifvaluedatUS$5/tCO2e and entire stock ofcarbonstored inforests inthePursat From anassetvalueperspective, thevalueof avoiding forest loss andtheresulting emissions. could realistically expect to receive ifitsucceeded in estimates are ofpotential benefits:How muchCambodia Average annualforest loss (ha)* 250 132 601 0.25% deforestation scenario Estimated annualCO2 loss (tCO2e) 504,000 360,000 77,000 67,000 18

VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 5 TOURISM BENEFITS In addition to the downstream benefits they provide to water users, the forests in the upper part of Pursat River Basin also provide benefits to those who come to visit them. Cambodia’s spectacular and pristine natural assets are exactly what ecotourists look for and the opportunities for supporting the expansion of this industry are great. There are already examples of successful mid- to high-end ecotourism operations in Cambodia which suggest that ecotourism products have great potential. In addition, iconic landscapes like the Cardamom Mountains offer the opportunity to develop new and exciting multi-day itineraries that take advantage of the biodiversity, lush forests and rugged terrain that is perfect for adventure tourism.

Shinta Mani Wild resort in the Cardamom Mountains © Shinta Mani Wild

57 58 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA trends continue (butcappingthe number ofvisitors of stay are allslowly increasing. Assumingcurrent the numberofvisitors, theirspending andtheirlength revenue isprojected to gradually increase over timeas 21 CSLEproject: http://documents.worldbank.org/curated/en/934211559527272828/Cambodia-Sustainable-Landscape-and-Ecotourism-Project 20 Theseestimates donottake into account theimpactofCOVID emergency, whichwillreduce ecotourism significantlyintheshort term. ecotourism operations (CBETs). and PhnomChreav Waterfall inPhnomAural Wildlife Sanctuary. Theestimate ofaverage visitor spendisbasedondata from community-based 19 Visitor numbers were estimated from dataprovided by ofEnvironment theMinistry ontourist arrivalsto the Chrok LaEngWaterfall, Anlong Svay Source: Estimates prepared for theCSLEproject. FIGURE 5.1:PROJECTEDVISITORS TO PAS INTHEUPPERPURSAT RIVERBASIN day andstaying alittle over aday). (about 125,000visitors ayear, eachspendingUS$22/ is generating revenue ofaboutUS$3 millionayear ecotourism inthePAs oftheupperPursat River Basin Landscape andEcotourism Project show (CSLE) that Estimates prepared for theCambodiaSustainable by forests inthePursat River Basin.Conversely, would result inareduction ofthebenefitsprovided Continued deforestation, even atcurrent low rates, Benefits ofImproved Tourism

Projected visitors 100, 000 125, 000 150, 000 150, 000 200, 000 225, 000 25, 000 50, 000 75, 000 0 2020 2030 19 Moreover, this 21 2040 US$210 million. 50 years, ata6discount rate, isestimated to beabout on thePAs), thepresent valueoftourism revenue over at 200,000ayear to avoid placingexcessive pressure Basin isestimated ataboutUS$53 million. generated by theforests intheupperPursat River to Cambodia,thenetvalue ofecotourism benefits about aquarter ofrevenue represents anetbenefit facilities, guides,etc. Assumingconservatively that on providing thesevisitors withaccommodation, food, services byRGC supporting investments inecotourism increased benefitsfrom tourism andcarbonstorage Ecotourism Project, for (CSLE) example, aimsto approved CambodiaSustainable Landscapeand investments could helpincrease them.Therecently 2050 20 However, ofthisrevenue part isspent 2060 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 59 49 47 45 43 Carbon Source: Authors’ calculations Authors’ Source: 41 39 37 Tourism 35 33 31

29 22 27 25 continue to decline, with continued forest loss and loss forest continued decline, with to continue agricultural soil quality and declining degradation, of GHGs. Poor high emissions continued output and options tourism and limited sites tourism to access as well as of visitors, limit both the number would daily spending in these and of their stay the length farmers and smallholder destinations. Communities practices, agricultural subsistence continue would and limited and value added productivity with low opportunities. other economic toward diversification be would interventions project In these conditions, the only slowed if they even positive considered the The analysis compared trends. negative continuing of the “without” scenarios balance and “with” project a 20-year over discounted benefit stream, each for to rate discount time horizon using a 6 percent in relation the value addition of the project determine a value on the benefits To place financial input. its to value of carbon emissions a conservative of reducing used. Explanations of the scenarios was t/ CO2e US$5 and further details each benefit stream for developed in Appendix 5. provided of the benefits analysis are the benefits of improved Based on these scenarios, in Pursat the forest from storage and carbon tourism million (see be US$95 to estimated are Basin River Figure 5.2). 23 21 19 17 15 13 11 9 7 5 3 1 0 200, 000, 000 100, 000, 000 600, 000, 000 500, 000, 000 400, 000, 000 300, 000, 000 900, 000, 000 800, 000, 000 700, 000, 000 1, 000, 000, 000 Note that these estimates assume that tourism would begin to grow beginning in year 2 of the project. The COVID emergency will almost certainly emergency The COVID 2 of the project. beginning in year grow begin to would assume that tourism that these estimates 22 Note benefits, perhaps significantly. the tourism delay FIGURE 5.2: PROJECTED INCREASE IN TOURISM AND CARBON BENEFITS FROM THE CSLE PROJECT AND FIGURE 5.2: PROJECTED INCREASE IN TOURISM A model was developed to compare the stream of the stream compare to A model was developed to assess costs under various scenarios benefits and in by the project generated benefits the incremental in the RB. In the “without project” scenario, the Pursat to situation is likely the environmental areas, target development and protected areas management management areas and protected development which is The CSLE project, enforcement. and law 2020 period from a six-year over being implemented million. It will US$55 cost to 2025, is expected to planning and enforcement management, support PA by loss cover forest which will reduce sites, at seven Mountains the Cardamom than 2 million ha in more carbon increasing Sap landscape, thereby Tonle will The project forests. in the Cardamom storage main from sites ecotourism to access also increase increasing thereby infrastructure, improving hubs by activities New ecotourism the number of visitors. (visitor sites at the project will also be developed tourism hiking trails, centers, and interpretation length both the visitors’ increasing facilities), thereby income and their daily spending. Increased of stay to greater lead communities will in the beneficiary will also be multiplier There the RGC. for revenue tax and in spending in the country of the tourism effects landscapes. the target 60 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA not beensubjectto validationorground-truthing. the analysiswaslimited andincomplete andhave was thegreatest constraint to thisanalysis.Data for Determining thereal revenue valueofproject sites Limitations

stage to validate theNPV assumptions. challenges duringtheimplementation would to beimportant address thesedata of theimpactproject. However, it significantly reduce theoriginal assumptions As adirect result, theanalysis hasaimedto VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 6 RECOMMENDATIONS As earlier stated, this analytical work is being undertaken as part of a broader effort of the World Bank in Cambodia to provide guidance to the RGC through technical assistance and analytical and advisory services on managing its natural capital through landscape approaches. The earlier chapters presented results of the benefits of forest ecosystem services, which provide evidence of the returns on investments that the RGC will gain through the strengthening of forest ecosystems through the Cambodia Sustainable Landscape and Ecotourism project. Methodologies on how to undertake measurement and valuation of ecosystem services were presented so that this work can be repeated in other places. In this chapter, recommendations to guide the RGC in some important next steps are provided.

Flooded Forests, Tonle Sap © Conservation International/photo by Tangkor Dong

61 62 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA to improved accessibility by access roads, possesses the SamKos Wildlife sanctuary, above Dam 1linked flows duringdryseason. Upstream deforestation in discharges duringwetseason andsupplement low Cardamom forested lands actto slow downhigh enhance resilience ofwater resources Mountains protected area landscape to upstream watersheds intheCardamom protection andrestoration on efforts Recommendation 1:Focus forest all ofthecountry (Recommendation 3). scaling uptheanalysisto ultimately cover 1 and2)(2)recommendations aimedat for thePursat River Basin(Recommendations recommendations: (1)policyrecommendations The results in this report lead to two setsof like payments for ecosystem services (PES). degradation inCambodiawithfinancialinstruments (iii) expand effortsto address drivers offorest of forest protection andmanagement efforts;and Mountain landscapefor actiononprioritization priority geographic areas withintheCardamom management decision-making; (ii)indicate some ecosystem service valuesinto forest andPA are intended to: (i)helptheRGC better integrate This work proposes three recommendations that Key Messages oftheStudy 3. 2. 1. international sources. Funding for themaintenance ofthoseforests inthelong runcanbecaptured from private and forest inthePursat Basinare about20timeslower thanthepublicbenefitsprovided by them. Investing inthemaintenance offorest isgood business.Annualpublicexpenses to maintainthe estimated atUS$22 million. the private gainshadfrom cuttingthem down for small-scale agriculture orcharcoal production The publicbenefitsfrom intact forests estimated atUS$99 millionare nearlyfive timeshigherthan attention, additional resources for management regards to prioritizingareas inthePA landscape for The RGC has someimportant decisionsto make with takes onrenewed importanceinthislight. in thebasin.Protection ofupstream forestlands magnifying theriskofextreme events like floods hand, willreinforce theimpactofclimatictrends, Deforestation andforest degradation, ontheother the trend enforced by theshiftingrainfall pattern. and therefore willcontribute towards countering these forests actasnatural protection infrastructure higher rainfall 5.2and5.3), inwet season(Figures there willbelower rainfall seasonand duringdry change projections for theregion suggesting that agricultural 5.1). encroachment (Figure Withclimate has experienced highrates ofdegradation dueto with anarea oftheCardamom Mountains that the Cardamom Mountains, butalsooverlapping areas for water yield are overlapping withPAs in this resource. Theresults showed thatimportant for afforestation would berecommended to protect to arrest rate ofdeforestation andengage inoptions accumulating in downstream infrastructure. Measures stressed months for irrigationandincreased sediment water yield, higherconsumption upstream inwater in theform of changes to thepattern ofseasonal hydropower infrastructure downstream. Theseare, a quantifiable risk to theoperation ofirrigationand VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 63 Again, Again, 23 the link to the private sector would be strategic for for be strategic would sector the private the link to lots. of the wood and management investments Action 3: Develop interventions for reducing reducing for interventions Action 3: Develop charcoal, from resources on forest the pressure production charcoal sustainable more including wood to alternatives friendly and environmentally industry be a significant can The charcoal charcoal. if economies PA rural Cambodia’s opportunity for the industry assessed to done right. GERES (2015) will and RGC million per year be worth about US$177 the organization of in leading role a key play need to negative its potential reduce to this industry in order from charcoal for wood Sourcing impacts on forests. the wood address help to plantations can existing the same At industry. the charcoal supply needs for conversion the wood-to-charcoal time, improving on pressure reduce to also help could efficiency for proposed measures key Four wood. for forests sustainable more towards further action on moving of existing (i) formalization are: production charcoal and linking these producers charcoal small-scale plantations who can provide sector with private which a and through of wood source a consistent be developed; could for charcoal system certification techniques producing existing charcoal (ii) refining efficiency of energy improve to and technologies cost- in a charcoal into conversion the firewood woodlots small-scale developing (iii) way; effective use use zones and sustainable within community (iv) exploring charcoal; needs for meet wood zones to environmentally-friendly more opportunities for husks. coconut like charcoal, options for Green Fuel is a company operating in Cambodia that is producing charcoal from coconut husks. More information available in available information husks. More coconut from charcoal in Cambodia that is producing operating Fuel is a company 23 Green https://www.khmertimeskh.com/57549/converting-coconut-husks-into-charcoal/ Action 2: Assess opportunities for agroforestry on on agroforestry opportunities for Action 2: Assess areas. within forested lands agricultural existing is one and conversion degradation Halting forest of PAs. management of MoE’s objectives of the key in the change of forest driver is a key As agriculture it is important that this is addressed Cardamoms, that forest recognizing in a manner that is pro-poor, support. Developing need livelihood communities additional value of creating is a way agroforestry agriculture to been converted on lands that have important some provide to trees and restoring The sediment regulation. like services ecosystem the assessment decided from that are interventions plan. management also be included in the PA should Action 1: Prioritize zoning and development of PA of PA and development zoning Action 1: Prioritize and Sanctuary Wildlife in Samkos plan management is already MoE Corridors. Conservation Biodiversity inclusion of the through in this direction taking a step zoning, for Sanctuary PA as a priority Wildlife Samkos and boundary planning demarcation. management PA assess the best planning should management The PA and conversion degradation forest reducing options for of degraded restoration include a plan for and should that information landscapes. This analysis provides high sediment yield of can use such as areas MoE in 2.9 and 2.11) (Figures yield 2.7, and high-water interventions. for within Samkos prioritizing areas and even restoration activities. In this context, context, activities. In this restoration and even some are there this recommendation, and under government. the for proposed actions strategic 64 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA TO INFORMTHEDESIGNATION OFCOREZONES. BIODIVERSITY CORRIDOR.THISTYPEOFMAPCANBEUSEDASANINPUTINTHEZONINGACTIVITIESFORTHESEPROTECTED AREASUNDERTHECSLEPROJECT, IMPORTANT AREASOFWATER YIELDOVERLAP THESAMKOS WILDLIFESANCTUARY, CENTRALCARDAMOM NATIONAL PARK, AURALWILDLIFESANCTUARY AND FIGURE 6.1:AREASOFHIGHWATER YIELDWITHINPAS INTHECARDAMOM MOUNTAINS Source: Authors’ creation VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 65 24 Source: International Centre for Environmental Management (ICEM) for Environmental Centre International Source: 22 See ICEM maps at https://icem.com.au/portfolio-items/mekong-arcc-climate-change-maps/ FIGURE 6.3: PRECIPITATION IS PROJECTED TO DECREASE IN THE DRY SEASON WITH CLIMATE CHANGE SEASON WITH CLIMATE DECREASE IN THE DRY TO IS PROJECTED FIGURE 6.3: PRECIPITATION FIGURE 6.2: PRECIPITATION IS PROJECTED TO INCREASE IN THE WET SEASON OVER CARDAMOM MOUNTAINS CARDAMOM OVER IN THE WET SEASON INCREASE IS PROJECTED TO PRECIPITATION FIGURE 6.2: 66 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA several groups important ofbeneficiariesthese the benefitsprovided by forests. Second, itidentifies of PES inseveral ways. itclearly documents First, The present study contributes to the development protected areas. these linkto anoverall revenue system thatsupport right benefit-sharing mechanismsandensuringthat resources (stocks) isdeveloping andimportant the are very good studiesalready onevaluating carbon being received inCambodiaandcould scale-up. There private sector under the REDD+ mechanism are already development ofPES.Payments from international establishing PESwithongoing pilots helpingto inform PA management. There isstrong interest oftheMoE in Cambodia for directing private financing to support PES andREDD+ are realistic opportunitiesin financing for forest management. RGC ofanoverall isorganizing theseaspart system of undertaken inCambodiaandacriticalstep for the Deforestation andDegradation) are already being for carbonunder REDD+(Reducing Emissionsfrom ecosystem services (PES)for water andpayments conservation andlivelihood results. Payment for traditional granting, thisapproach canprovide deeper the prospect of more stable long-term fundingthan alternative to traditional conservation funding.With capital investment canserve asacomplement or conservation. Ifundertaken effectively, private This approach emergingtrend isan important in from private sources for themanagement offorests. term afinancingapproach thatintegrates financing RGC should consider developing over themedium term to finance maintenance of forests, butthe Public sector resources are neededin theshort such asagriculture. to receive thebulkofbenefitsfrom alternatives receive onlyasmallsubsetofforest benefitsbutstand actors ontheground. InthePursat RB,theseactors but itwillnotby itselfchange theincentives facing NCA can helpinform government decision-makers, PAto support management potential for private financing Recommendation 2:Explore the 4. 3. 2. 1. Pursat River Basin would require: to reduce deforestation intheupper Designing andimplementing aPES program payments would increase iteven further. this amountandifanERPA canbenegotiated, carbon farmers would suffer from deforestation would addto corresponding figure ondamages thatirrigated the costs ofimplementation oftheprogram. The both thecosts ofthe payments to and participants that stopped alldeforestation completely -including producers would bewillingto pay for aPESprogram US$0.17 millionayear. Thisfigure isthemaximum such the losses suffered by HEPproducers would beabout shows thatatadeforestation rate of1percent ayear, to pay to avoid damages. For example, theanalysis example, onlyprovides anupperboundofwillingness quantification ofbenefits provided bythisanalysis, for To besure, muchmore needsto bedone.The where they would bemosteffective. would permitPESconservation effortsto theareas model developed for theanalysisprovides tools that services were lost orreduced. Third, thehydrological quantifies thedamages they would face ifthese services (irrigated farmers andelectricity users) and these criticalareas, basedon theirsize(number Estimating thecost ofaPESprogram to protect ecotourism; of NTFPs andthrough activitiessuchas example through thesustainable collection could generate for local communities, for Measuring any benefitsthat retaining forests costs ofproduction, etc.); uses (takinginto account likely crop yields, local people ofconverting theseareas to other etc. andquantifyingthepotential benefits to suitability for agriculture, proximity to roads, deforested, basedonfactors suchastheir areas, to seehow likely they are to beactually athreatUndertaking assessmentofthese on hydrological flows andsediment loads; deforested, would result inthegreatest impact upper basin,theareas which,ifthey were to be this analysisto identify thecriticalareas inthe Using thehydrological modeldeveloped for VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 67 Enhance and promote the attractiveness of attractiveness the and promote Enhance rules with clear + payments REDD for Cambodia system; the for and regulation well are payments that PES and REDD+ Ensure for mechanism financing the overall into integrated Lang project Prey the Greening for work Recent PAs. including of fund sources identified a number the Forestry and Social Fund, the Environment Fund Development National Forest Administration that needed to conservation funds and private be to way an integrative and used in be managed efficient and effective. Conducting a “scoping” exercise that identifies (i) a “scoping” exercise Conducting policies, decision-making and planning processes of NCA could which the implementation for and (ii) critically important information; provide framework, institutional data availability/needs, 3. 4. The advantages for Cambodia of a natural capital capital natural of a Cambodia for The advantages valuation one-off economic (NCA) verses approach ecosystem how (i) standardizing studies are: into and integrated determined values are service in example for decision-making of the RGC, regular for MoE for allocation national budget determining and (ii) that data and information management; PA if data collection, costly and less reliable will be more under an standardized are analysis and access Basin The analysis of the Pursat NCA approach. benefits of undertaking potential the demonstrates and interventions identify the need for NCA both to lessons some key help design them and elucidates to Lessons include: (i) and scaling up. replication for analysis of the interactions thorough the need for and (ii) the services; of beneficiaries with ecosystem plan and early data collection of a robust importance ministries. relevant on data sharing from commitment a comprehensive study to case a single from Moving map that includes: a road requires approach 1. Recommendation 3: Develop a road map a road 3: Develop Recommendation up assessment of economic scaling for ecosystems forest by benefits provided Capital using a Natural Cambodia across (NCA)Accounting Approach of ha to be protected), the size of payments of payments the size be protected), of ha to and the conservation, forest induce needed to of conserving communities local to net costs to conversion from benefits them (potential retaining from benefits minus local agriculture costs implementation Also the likely forests). the cost based primarily on of the program, of the size by which is affected of monitoring, and their dispersion be monitored, to plots their accessibility; whether determining Based on these estimates, are costs the total (i.e. is feasible the program putting in pay); willingness to total than less from funding collect to arrangements place HEP farmers, (such as irrigated users service and; make buyers) carbon and/or producers service providers to payments appropriate from who refrain communities (upstream a provides The analysis conducted deforesting). but clearly map, substantial start on this road be done. needs to much more Provide oversight and management of and management oversight Provide in the REDD+ activities as is being proposed which is (Prakas), Framework REDD+ Regulatory being developed; emissions reduction for Set up the national system which includes a benefit sharing payments investments clear mechanism that will make area and protected conservation forest for etc.; including co-management, management, 1. 2. The kind of analysis undertaken in this study provides in this study provides The kind of analysis undertaken needed to of investment the levels a basis for emissions more and incentivize holistically ensure the recommend In addition, we payments. reduction to: RGC 5. scheme PES any for be important it would Lastly, within the government plans of ongoing be part to the institutional framework strengthening for The national payments. reduction emissions for that REDD+ nesting framework, and REDD+ strategy the being established, also provides is currently carbon reducing from payments opportunity provide to conservation, undertaking forest emissions through activities etc. livelihood conservation compatible 68 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 3. 2. a. be prioritizedfor thefollowing reasons: carbon andtourism ecosystem servicesshould Estimation ofeconomic benefitsof hydrological, regulation focus withaparticular ondrought. that should be considered includewater flow regulation. Additional ecosystem services and irrigation,water production andsediment loss; watersheds for important hydropower are mostatrisk from degradation andforest compatible assessmentsmay include:Areas that for ecosystem undertaking serviceaccounting- the Pursat Basin. Criteria for prioritizingareas there are clear beneficiaries,asinthecaseof initially focus onrepresentative watersheds where national boundaries.Aphasedapproach could would intimebeextended to thecountry’s towards amore encompassing exercise that as thoseinthecurrent report -andevolving with asmallsetofkey ecosystem services –such basin-specific accounting-compatible assessments Considering a phased approach, with starting undertake related work onecosystem valuation; and World Wildlife whocurrently Fund(WWF) International, Flora andFauna International (FFI) NGOs andDevelopment Partners like Conservation ofEnvironment and(iii) Department(s) (PDoE); (ii) attheprovincial level, includingProvincial ofEconomy (MEF); (MoI), Ministry andFinance ofInterior Ministry (MAFF), Forestry andFisheries Development ofAgriculture, (MRD),Ministry and Meteorology (MOWRAM), ofRural Ministry level, ofWater suchasMoE, Ministry Resources partners thatshould beengaged (i)atthe ministry Identifying andinforming key institutional for NCA; financial, technical resources andcapacity required services, asundertaken for thisstudy, willbe areas. Analysisofhydrological ecosystem restoration ofdegraded watershed important with protection ofexisting forest resources and Cardamom Mountains andKulen Mountains, management watersheds, ofimportant like the RGC, through MoE andMOWRAM, strengthen by climate change. Itistherefore that important shortage whichisexpected to beexacerbated Cambodia isexperiencing aseriouswater 5. 4. a. ultimately for accounting efforts: and generation ofdatafor similarassessmentsand highlight theneedfor enhancement onmonitoring The scoping androad mapwould mostcertainly government ispursuing pilot PESprojects; Sap andKulen Mt.andKbalChay where the the watersheds thatfeed into theTonle suchanassessmenttoundertaking include consideration for geographic prioritiesfor We would recommend thatinitial d. c. b.

be undertaken. Additionally, experimental plots the future damsoratthemaingaugingstation sediment andbedload, atleast atthesite of recommended thatmonitoring ofsuspended forest change andcan result inlarge costs, itis accumulation are significantlyaffected by As changes insoilerosion andsediment resources thatcanhelpwithPA management. for rural andforest communities andgenerate terms of jobs and value added, provide incomes the RGC to boosttheoverall tourism sector in Ecotourism development inPAs isapriorityof facilitate carbonstorage. or are difficult to value)andbiodiversity that ecosystem services (whichhave nomarket and/ a price which often accounts for regulating well-established carbonmarket establishes established methodologies for doingthis.The is strategic to analyzeasthere are well- Carbon storage, asanecosystem service, operation ofhydropower plants. regulation and sedimentregulation for the forest resources thatprovide criticalwater flow finance themanagement thatcansupport of schemes for hydropower companies to provide Valuation ofhydrological services cansupport watersheds thatare upstream ofthisdam. season,andthismeansprotectingdry forest energy securityinCambodiaespeciallythe these hydropower for plantswillbeimportant as close to maximum operation capacityof as well intheCardamom Mountains. Ensuring hydropower plantsontheMekong River, and Cambodia hasinvested significantlyin management. instructive for prioritizingareas for watershed VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 69 important recharge areas and travel time. time. and travel areas important recharge protection risk incomplete we Without this, limiting our are as we areas, source water for based on visible of the rivers region source water. the river to contributing slope terrain The benefits of forest for disaster reduction – flood reduction – for disaster forest The benefits of also would – prevention fire mitigation and forest subsequent analysis. in capture be important to would damages and fire drought on the flood, Data the benefits provided determining be important for risk reduction; of disaster in terms forest by be importantwould benefits that Additional domestic used for include: Water capture to services ecosystem purposes; recreational for be considered should ecotourism from this is significant; non-timber where areas and charcoal. (NTFPs); products forest

6. 7. to monitor soil erosion rates could be helpful in could rates soil erosion monitor to projections. soil loss verifying in the mountainous variability Rainfall needs monitoring is high. Weather region accurate derive to be strengthened to available. resources water to estimates important especially as This will become shift to continue patterns precipitation extensive more A with a changing climate. is needed. gauges of rainfall network but an important role, plays often Groundwater available less even are data on groundwater groundwater Improved water. surface than for better is needed to mapping and monitoring The first that it plays. the role understand map be to of this should essential step identifying by followed the major aquifers,

b. c. 7 CONCLUSION

The development of a methodology for b. Identifying and prioritizing areas in the undertaking an ecosystem services assessment landscape for forest conservation because and valuation, including the results of this they are important for water provisioning. work, creates several strategic opportunities 2. On the economic side, this work shows that for the RGC to enhance its decision- the costs of losing forests are significant, and making capability on investing in forests they negatively impact parts of the economy. and Protected Areas and to quantify and Beneficiaries of the services are identified communicate the value of its natural capital and these benefits quantified in monetary to Cambodia’s economy. The contribution of terms that allow for easier comparison with this work is summarized as the following: the costs of investment. 8. The hydrologic model developed in this 3. Upstream activities like land use conversion analysis is a key contribution for: (e.g. forest to agriculture) have significant a. Quantifying what would happen if forest impacts for people in the downstream ecosystem were lost and therefore impacted by flooding, sedimentation and understanding the contribution of forests in impaired water flows and there upstream- helping to provide water flow regulation and downstream linkages have been spatially sediment regulation services; identified and quantified in this work. VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA BASIN, PURSAT IN FORESTS BY PROVIDED SERVICES ECOSYSTEM THE VALUING

Akal village on Tonle Sap lake 70 © Conservation International/photo by Tangkor Dong VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 71

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Xiong. 2011. “A conceptual model for constructing high-resolution gauge-satellite merged merged gauge-satellite high-resolution constructing model for “A conceptual Xiong. 2011. A.Y. Xie, P.and Yassin, F., S. Razavi, M. Elshamy, B. Davison, G. Sapriza-Azuri and H. Wheater. 2019. “Representation and improved and improved “Representation 2019. and H. Wheater. G. Sapriza-Azuri B. Davison, M. Elshamy, S. Razavi, F., Yassin, World Bank. 2020. World Bank Open Data. Available at: https://data.worldbank.org/ Available Bank Open Data. Bank. 2020. World World UNFCCC (United Nations Framework Convention on Climate Change. 2015. “Adoption of the Paris Agreement.” Agreement.” of the Paris “Adoption 2015. Change. Climate on Convention Nations Framework (United UNFCCC 2016. Degradation). and Forest Deforestation Emissions from on Reducing Programme Nations UN-REDD (United and satellite blending for approach kriging “A Bayesian and C. Funk. 2015. Kleiber W. A., B. Rajagopalan, Verdin, No.96308-KH. 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Ideal coverage: atleast most under study. segment downstream ofthearea recorded dailyandbasedon Observed discharge dataatleast recent 10years. Ideal coverage: atleast most datasets. Alternately, global remotely sensed gauges andobservatories inbasin. Rainfall datafrom precipitation Description • • • • Inputs: • • • • • • • • • Data usedinthisstudy Herbicide and insecticide Fertilizers Manure Seeds pattern derived from MoWRAM reports Rough information oflocal paddycrop season paddycultivation(from MoWRAM). total target irrigated areas for wet and dry List ofirrigationworks intheprogress and (SRTM) 30m resolution digitalterrain model Environment (MoE) obtained from of theCambodia Ministry Official land cover for the year 2016 No local monitoring dataavailable (Harmonized World SoilDatabase v1.2) 30 arc-second resolution soillayer the periodfrom 01-Jan 2007to 31-Dec2016. made available by MoWRAM &covering gauge (BacTrakuon monitoring station) Discharge datafor single downstream Climate Forecast System Reanalysis. Centre for Environmental Prediction for theperiod 1979-2014 from National Humidity, windspeedandsolarradiation hydrological model). Google Engine(thiswasusedfor Earth the the basinhasbeenextracted using ERA5 global datasetat13pointscovering Daily precipitation estimates from the coverage 2004-2018. precipitation gauge inthebasinwith and Meteorology (MoWRAM) for asingle ofWaterCambodia’s Ministry Resources Daily precipitation datamadeavailable by VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 77 Land preparation Plantation & transportation control Weed management Crop Harvest & post-harvest Transportation Irrigation datasets global Location of 3 dams from the for parameters Some operating 1) from dam (Dam planned hydropower Ministry of Mines and Energy (MME) price Electricity of production Cost generation electricity Total Soil bulk density information Discounting lifecycle Dam • Anecdotal, from newspaper articles from • Anecdotal, Data used in this study Data Labor: • • • • • Services: • • • • • • • • • • Reservoir capacity/operation capacity/operation Reservoir if available rules output (not electricity Actual capacity) per year lifetime Active use statistics Water of electricity Price data on sediment dredging Any incl. (if any), cost dredging frequency dredging cost Operating

Scope, plan and status; Scope, and Damage cost, Maintenance status of operation costs, repair infrastructure dams Location of hydropower plus those under (operational development) each dam unit: For a. b. c. d. e. f. g. in the basin and droughts Floods Area of rice under cultivation in of rice Area the study area farm (ha) Size of a typical rice Description Description Irrigation infrastructure Hydroelectricity events Extreme Date requirements Date 78 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA TABLE A2-2:SWAT CALIBRATION PARAMETERS TABLE A2-1:SWAT LANDCOVER CODES APPENDIX 2:SWAT PARAMETERS v__GW_DELAY.gw SWAT Parameter Source: https://oldgeni.isnew.info/landuse.html BERM SWRN WETF WATR AGRL FRSE FRSD FRST RNGE PAST LC v__GWQMN.gw v__ALPHA_BF.gw v__CH_K1.sub v__CH_N1.sub v__CH_K2.rte v__CH_N2.rte v__ESCO.hru v__CANMX.hru v__SLSOIL.hru v__LAT_TTIME.hru v__REVAPMN.gw v__GW_REVAP.gw v__RCHRG_DP.gw Urban Medium Density South Western Range Wetland-forested Water Agricultural Land-Generic Forest-evergreen Forest-Deciduous Mixed Forest Range-Grass Pasture Name 0.02 0.01 Min 0 0 0 0 0 0 0 0 0 0 0 0 5000 Max 500 500 100 180 150 0.3 0.3 0.2 50 50 1 1 1 Best Simulation 105.478706 2950.77832 95.762405 423.24704 61.229294 35.175396 0.091888 39.94957 4.276659 0.743932 0.793162 0.180437 0.147688 0.174933 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 79 300 250 200 150 (with stream routing) (with stream 100 Discharge at downstream gauge directly from SWAT model model SWAT from gauge directly Discharge at downstream 50 0 0.00

50.00

100.00 150.00 250.00 200.00 300.00

from remaining intermediate sub baisins sub intermediate remaining from

outflow from locationm of Dam 1, 3 & 5 - and - water yield yield water - and - 5 & 3 1, Dam of locationm from outflow

Estimated discharge at downstream gauge by aggregating aggregating by gauge downstream at discharge Estimated

CONTRIBUTING TO MONTHLY DISCHARGECONTRIBUTING MONTHLY TO WYLD FROM SUB-BASINS AS DIRECTLY DIRECTLY AS SUB-BASINS FROM WYLD APPENDIX 3: SCATTER PLOT OF MONTHLY OF MONTHLY PLOT SCATTER 3: APPENDIX 80 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA Source: UNDP2017 vii. vi. v. iv. 1071&lg=en http://www.crf.org.kh/?page=api_location_detail&menu1=592&menu2=1110&menu3=&menu4=&menu5=&id= iii. ii. i. Assumptions: scenario whichestimates thatabout 980hectares offorest inthePursat RBare converted eachyear. The assumptionsanddatatables thatfollow to to pertain this.Theanalysispertains a0.25percent deforestation present value(NPV) analysis.NPV wasdetermined to beUS$22.1 millionfor 50years at6percent discount rate. A spreadsheet modelwasdeveloped to compare thestream ofbenefitsand costs of forest conversion usingnet PROTECTIONFOREST ESTIMATES AGRICULTURE ANDCHARCOAL FOR CONVERSION APPENDIX 4:FOREST Total Equipment Fees Labour Inputs to Charcoal Production * Avg. over 10years (2016-2025) Total Deciduous Semi-evergreen Evergreen Forest type

Average price ofcharcoal atUS$350/t (GERES2015). in thedeforestation rates ofthedifferent forest types. This analysisassumesthesamedeforestation rate for allforest types.Inreality, there may besomedifferences Share oftotal above ground biomass usedfor charcoal of80percent (GERES2015). 6.41 kgofwood isneededto produce 1kgofcharcoal (GERES2015). from Cambodia Rice Federation Rice isgrown onlyinthewet seasonasitisrainfed. Price isbasedonaverage price ofIbisRice (Jan-Mar2020) from MAFFStatistic including landpreparation, fertilization andpestcontrol. Wet seasonyield -1.2t/haSource: Var etal.(2016) practices suchasslashandburnfor ethnicpeople while somehave already adopted advanced technologies Cost ofproduction is50percent lower thanlowland paddies.Uplandrice farmingstillfollows traditional charcoal. Forestland conversion isdonemainlyfor agriculture: 90percent ofconversion isto agriculture and10percent to T Charcoal Man-days Kowyun Unit Kiln 2016 forest cover 100,903 242,989 397,115 53,223 (ha) Unit Cost (US$) 0.50 50 7 Average annual forest loss (ha)* 983 250 601 132 Number ofUnits 0.25% deforestation scenario 50 28 25 2 Estimated annual CO2 loss (tCO2e) 360,000 504,000 67,000 Total (US$) 77,000 100 196 321 25 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 81 (t) 97,963 21,250 32,076 151,289 ABV Biomass loss Biomass ABV 132 601 250 (ha) Avg annual forest loss forest annual Avg 85 50 1.2 178 163 243 3,776 943.7 786.4 (t/ha) 39,320 167,975 151,289 1,321,714 ABV Biomass ABV Rice price (US$/t) price Rice (t) yield Total Benefit (US$) Ag, Wet season US$ Wet Ag (ha) for converted Area Rice Production Rice (t/ha) Season yield Wet Rice Production Costs Production Rice season US$/ha Wet Source: Cambodia Forest Reference Level 2016 Level Reference Forest Cambodia Source: Estimates Production Charcoal (t/ yr) Biomass lost Est. ABV (t)/ yr produced Est. Charcoal yr US$/ Charcoal Est. benefits from Biomass Estimation Biomass type Forest Evergreen Semi-evergreen Deciduous

82 VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA was used. degradation. To place avalueonthebenefitsof reducing carbonemissions a conservative valueofUS$5 t/ CO2e The analysisfollows scenarios the“with”and“withoutproject” to modelthereduction inrate offorest loss and of GHGemissionsreductions were modeled usingtheFood andAgriculture Organization(FAO) EX-ACT model. using datafrom the Cambodia’s InitialForest Reference Level undertheUNFCCC Framework reportandestimations Emission reduction benefits.Thevalueofemissionreductions isestimated basedonanupdated GHGanalysis assumptions. Thenumberofvisitors iscappedat200,000asanything beyond thisislikely to beunsustainable. represent anadditionalstream ofbenefitsthathelps ensure thatthe overall conclusion isbasedon conservative employment created data were are(VCA) notquantifiedinthisanalysisasnovaluechain available but baselines. Furthermore, multiplierbenefitsofthe tourists’ spendingon local food, transport and lodging andthe and expects results beyond theprojections considered, given theextremely low dailyspendingandlength ofstay average length ofstay increases by 1.5days from abaselineof2.5days. Thisanalysisisintentionally conservative implemented). Itprojects anannual5percent increase inoverall tourist inYear spending starting 3andthe projections, inYear starting 3oftheproject (assuminginfrastructure andcapacity building spendingiseffectively conservativelyThe “withproject” estimates a3percent annualvisitation growth above the“withoutproject” project period), from abaselineof2.5days. average length ofstay continues to increase according to nationalhistorical growth rates (0.3days increase over the (in real prices) intheabsence ofany infrastructure andcapacityimprovements (currently US$37.88 perday). The ecotourism sites nationally, over thepreceding seven years. Itassumesthatspendingpertourist remains constant visitation continues atanestimated 9percent annuallyover theproject period,basedonhistorical arrivalsdataat ofTourismCambodia’s Ministry ofEnvironment. andtheMinistry scenario The“withoutproject” assumesthat period. Average tourism spendingandaverage stay length were derived from tourism statisticsavailable from to tourism sites inPursat province, andthatwere usedwhere available, averaged over thetwo-year collection at project sites, average dailyspendingandaverage length ofstay over a50-year timehorizon.Visitationdata Tourism benefits.Tourism benefitsare quantifiedprimarilybasedon expected changes invisitationdataof tourists NPV ANALYSIS APPENDIX 5:TOURISM ANDCARBON VALUING THE ECOSYSTEM SERVICES PROVIDED BY FORESTS IN PURSAT BASIN, CAMBODIA 83