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Protecting Water Sources to Conserve Biodiversity: Financial Mechanisms for Watersheds Protection in Colombia, Ecuador and Venezuela

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Protecting Water Sources to Conserve Biodiversity: Financial Mechanisms for Watersheds Protection in Colombia, Ecuador and Venezuela Protecting water sources to conserve biodiversity: Financial mechanisms for watersheds protection in Colombia, Ecuador and Venezuela Northern Tropical Andes Conservation Program The Nature Conservancy 2007-2012 Proposal by Marta Echavarría (Ecodecisión) Adapted by Natalia Arango, Lila Gil, Pilar Barrera, Silvia Benitez and Aurelio Ramos (TNC) February 2007 TABLE OF CONTENT Executive summary .................................................................................................................. 3 I. INTRODUCTION..................................................................................................................... 5 A. FONAG: a model to replicate ................................................................................................. 6 II. WHY MAKE THIS PROPOSAL?........................................................................................ 10 A. PRECAUTIONARY PRINCIPLE.............................................................................................. 10 B. GLOBAL DEVELOPMENT GOALS........................................................................................ 11 C. WORLD WATER FORUM ...................................................................................................... 11 III. PROJECT OBJECTIVES..................................................................................................... 13 A. GENERAL OBJETIVE ............................................................................................................. 13 B. SPECIFIC OBJETIVES............................................................................................................. 13 IV. BASIC ASSUMPTIONS .................................................................................................... 13 V. SELECTED ACTION SITES................................................................................................. 14 A. METHODOLOGY FOR SELECTING SITES............................................................................ 14 B. SELECTED SITES ................................................................................................................... 15 VI. COMPONENTS AND ACTIVITIES................................................................................... 16 A. FINANCIAL MECHANISM SET UP....................................................................................... 17 B. DEFINITION OF BIODIVERSITY CONSERVATION AGENDA............................................... 18 C. UNDERSTANDING NATURAL HYDROLOGICAL REGIMEN............................................... 23 D. ADAPTATIVE MANAGEMENT ............................................................................................. 24 E. DEMAND-SIDE MEASURES ................................................................................................. 25 F. LEVERAGE FUNDING............................................................................................................ 25 VI. EXPECTED RESULTS ........................................................................................................ 28 VII. BUDGET............................................................................................................................. 31 VII. REFERENCES .................................................................................................................... 37 A. INTERVIEWS........................................................................................................................ 41 B. APPENDIX: UN MILLENNIUM DEVELOPMENT GOALS RELATED TO WATER AND ENVIRONMENT ....................................................................................................................... 42 Goal #1: Eradicate extreme poverty and hunger..................................................................... 42 Goal #4: Reduce child mortality ............................................................................................... 43 Goal #6: Combat HIV/AIDS, malaria and other diseases........................................................ 43 Goal #7: Ensure environmental sustainability ......................................................................... 43 Goal #8: Develop a global partnership for development ........................................................ 44 C. APPENDIX: DESCRIPTION OF SELECTED SITES.......................................................... 46 A. VENEZUELAN CONTEXT...................................................................................................... 46 I. Barquisimeto........................................................................................................................... 47 C. COLOMBIAN CONTEXT ....................................................................................................... 48 I. Bogota..................................................................................................................................... 52 II. Cali ......................................................................................................................................... 55 D. ECUADORIAN CONTEXT ..................................................................................................... 57 I. Cuenca.................................................................................................................................... 58 II. Loja and Zamora ................................................................................................................... 60 2 Protecting water sources to conserve biodiversity: Financial mechanisms for the protection of watersheds in Colombia, Ecuador y Venezuela Executive summary Water resources management is a global priority. Throughout the world, there is recognition that water quality and flow are being affected by land use changes. Institutionally, water management faces a complex situation of multiple governing institutions with differing points of view and a generalized lack of controls. Despite the numerous efforts to protect watersheds or establish drinking water projects, few programs address the link with protected areas, which in many cases where originally created to protect water sources. Therefore, the level of investment in the conservation of water sources in minute considering the need to guarantee the regeneration capacity of the resource. The UN Millennium Goals aim to reduce by half the number of people without drinking water and sanitation by 2015. This requires an extraordinary level of investment. For example, 5 billion dollars are needed to meet this target for Ecuador alone. Meeting this ambitious goal is vital for social welfare, and requires not only mobilizing investment, but ensuring its environmental sustainability as well. Deforestation, agricultural development and urbanization are heavily impacting drinking water sources. The Nature Conservancy, and in particular the Northern Tropical Andes Conservation Program, has worked for over a decade establishing financial and institutional mechanisms that protect biodiversity, as well as conserve water sources for human consumption. One of the Conservancy’s key successes and models has been the Quito Water Protection Fund, otherwise known as FONAG. Quito, Ecuador’s capital city of 1.5 million inhabitants derives 80% of its water from flows originating in three national parks, Cayambe, Antisana and Cotopaxi. Set up in 2000 with a seed capital of $21,000 dollars, it is now a trust fund with a capitalization of over $3 million that is investing in watershed programs and projects around the Quito water sources. In addition, the Sustainable Waters Program of The Nature Conservancy has pioneered efforts 3 to conserve aquatic biodiversity; an area greatly ignored compared to terrestrial ecosystems. Our working hypothesis is better functioning ecosystems provide cleaner water and stabilize flow. Although there is widely accepted evidence supporting the link between conservation and water quality worldwide, flow is more complex and dependent on site-specific conditions. However, the hydrological benefits provided by Andean grasslands and montane forests have been well documented. The ecological integrity of these ecosystems also provides other important environmental services such as carbon fixation in biomass, as well as soils. As the mechanism is institutionalized carbon sequestration opportunities can also be identified and quantified, including avoided deforestation, as well as new plantations or forestry projects. The proposed program aims to establish multi-stakeholder institutional mechanisms for sustainable finance of watershed conservation that simultaneously support biodiversity protection (and eventually carbon sequestration) and ensure water supplies at 6 sites in Venezuela, Colombia and Ecuador. The Conservancy’s conservation portfolio may entail the following sites: in Venezuela, the city of Barquisimeto and the Dinira National Park; in Colombia, the city of Bogotá which depends on water sources in Chingaza and Sumapaz National Parks, and the city of Cali involving the Farallones and Las Hermosas National Parks; and in Ecuador, the cities of Loja and Zamora, dependent on Podocarpus National Park and the city of Cuenca dependent on the Cajas and Sangay National Parks and the Mazán Ecological Reserve. The expected results of this project are environmental and social; by creating an institutional framework for decision-making that will commit water users to protect the natural land cover of close to 2 million acres and improving the living conditions
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