ets for ecosystem services” ets for ecosystem ets for ecosystem services” ets for ecosystem October 2003 Rüschlikon Center: Center: October 2003 Rüschlikon October 2003 Rüschlikon Center: Center: October 2003 Rüschlikon

WWF Central America and WWF Central America and Defensores de la Naturaleza Defensores de la Naturaleza Guatemala. Guatemala. When Money Flows When Money Flows Watershed Services in Watershed Services in “Beyond Carbon – emergingmark “Beyond Carbon – emergingmark Upstream: Payment for Upstream: Payment for Swiss Re Conference 29th-30th of Conference 29th-30th Swiss Re Swiss Re Conference 29th-30th of Conference 29th-30th Swiss Re WWF Global and Freshwater WWF Global and Freshwater

Conservation Priorities in Central America Conservation Priorities in Central America SIERRASIERRA DEDE LASLAS MINASMINAS BIOSPHEREBIOSPHERE RESERVERESERVE && LandscapeLandscape scalescale conservationconservation

• 240,000 Hectares (largest continuous cloud forest block in CA) • Sea level to > 3,000 meters • 70% of all birds, mammals, reptiles in Guatemala • 63 permanent rivers – important national water reservoir • Driest region in Central America (500mm) • Threats mitigation to the Mesoamerican Reef resource use and biodiversity loss resource use and biodiversity loss

The Challenge: Addressing Threats and The Challenge: Addressing Threats and

Roots Causes to unsustainable freshwater Roots Causes to unsustainable freshwater overgrazing and illegal logging). introduction of exotic species, hydro-electric plant construction). & policy incentives are lacking. provided by the Sierra de las Minas cloud forest and core zone. • land use changes (forest fires, Inadequate • Point and non-point source pollution. • Ecosystem alteration (canal dredging, • Opportunity costs for forest owners are high • de not pay for environmental services Users IMPORTANCE:IMPORTANCE: WATERWATER SOURCESOURCE

Water from the Reserve is used for: • Domestic Consumption • Irrigation & agro-export industry • Industry (bottling, paper & hydropower companies) resources?) resources?) Basic Research: Research: Basic Basic Research: Research: Basic water use efficiency water use efficiency Natural Regeneration Natural Regeneration Supply (How much is there?) Supply (How much is there?) Demand (How much is used?) Demand (How much is used?) biodiversity loss threat abatement) biodiversity loss threat abatement) Forest owner compensation program awareness raising for buy-in) project Forest owner compensation program awareness raising for buy-in) project Protected Area Management (protection and Protected Area Management (protection and Fund Design (How will we receive and channel Forest Landscape Restoration, Reforestation & Fund Design (How will we receive and channel Forest Landscape Restoration, Reforestation & Water Valuation (How much is the water worth?) Water Valuation (How much is the water worth?) Integrated River Basin Mgt, Governance &Integrated River Basin greater Mgt, Governance Community and User Involvement (environmental Community and User Involvement (environmental &Integrated River Basin greater Mgt, Governance

The Project Concept The Project Concept LINK CREATING CLEANER FINANCIAL WATERSHED PRODUCTION MANAGEMENT & savings to Water Fund Production cost INDUSTRY The Strategy

The Strategy $ Production Costs • Abasa (Coca-Cola) • (Rio Beer) Cabcorp •Hydro-electric plants •Hydro-electric • Lizasa (Zacapeña Rum) • Painsa manufacturers) (paper USERS & IMPLEMENT CLEANER PRODUCTION. PRODUCTION. USERS & IMPLEMENT CLEANER START WITH MORE WILLING AND FINANCIALLY ABLE WATER Cleaner Production Advisory Committee ACADEMIC/SCIENTIFIC COMMUNITY SIERRA DE LAS MINAS BIOSPHERE RESERVE EXECUTIVE SECRETARY POLOCHIC TOWN HALL GROUPING DIRECTORS

Water Fund Design WATER FUND BOARD OF IRRIGATION SYSTEMS ASSOCIATION

Component Progress to Date ASSOCIATION OF HYDRO-ELECTRIC PLANTS ASSOCIATION OF INDUSTRIES MOTAGUA HALL TOWN GROUPING Data Gap Analysis - Soil and Water Assessment Tool - development Cartographic -

Analysis

Hydrological Data Gathering & TBD Colorado Irrigation units -Cost-Benefit Analysis (agricultural production and protection costs) /year (in- 3 US$ 0.0016- 0.005/m kind contributions) Lato Domestic consumers -Contingency Evaluation to (“Willingness Pay”)

Water Valuation Studies US$ 200,000 – 1,000,000/year (based on total water consumption volumes) Pasabien Industry (bottling industries) -Subsidiary markets -Production costs -Benefits maximization Preliminary Water cost findings Watershed User group Methodology Local Constituency Building industries and research Guatemalan Chamber of Industry (GCI) and Clean Production Center program – Selection and initial contact with – information gathering Corporate – Formal agreement with the – & Clean Production training EPS – peer visit to Costa Rica EPS – Program for Industry Incentives – Breakfast at the GCI Corporate Communications and Fundraising

- Central American Journalist Training Workshop

- Matching Funds

- Project communications material & improved profile d policies are lacking in Guatemala. c however still considers it an open- c however still considers Relations activity rather than a risk ner Production than in PES and upper data sources and limited information for water valuation studies.

Take Home Messages and Challenges access resource. watershed conservation. mitigation investment. sharing on the part of industry •strategi water as recognizes Industry • is more interested in Clea Industry • is still seen as a Public Conservation • water privatization. concerned about communities Local • Adequate water management norms an • available hydrological Insufficient