UNIVERSITY OF APPLIED SCIENCES LARENSTEIN, VELP PART OF WAGENINGEN UNIVERSITY AND RESEARCH CENTRE Programa Gestión y protección de Recursos Naturales en cuencas hidrográficas (PROGEREN III), GTZ República Dominicana Secretaría de Estado Economía, Planificación y Desarrollo Secretaría de Estado de Medio Ambiente y Recursos Naturales (SEMARENA) An economical feasibility study for the implementation of a PES scheme in the catchment area of the Río Yaque del Norte, Dominican Republic BACHELOR THESIS BY STEFFEN EBERLE STUDENT OF TROPICAL FORESTRY ARNHEM, DECEMBER 2010 SUPERVISOR: JAAP DE VLETTER Table of Content Table of Figures ................................................................................................................... iv Table of Tables ..................................................................................................................... iv Acronyms and Abbreviations..................................................................................................v Abstract ..................................................................................................................................1 I. Introduction .........................................................................................................................1 1. Background of the Study .................................................................................................1 2. Payments for Environmental Services .............................................................................2 3. Problem Description........................................................................................................3 3.1. Background ..............................................................................................................3 3.2. Cause of the Problem ...............................................................................................3 4. Program Description .......................................................................................................5 4.1. Conceptual Framework ............................................................................................5 4.2. Strategy ....................................................................................................................5 4.3. Counterparts.............................................................................................................5 4.4. PES ..........................................................................................................................5 4.5. The Role of PES in the Dominican Republic ............................................................6 5. Legal framework .............................................................................................................7 5.1. Background ..............................................................................................................7 5.2. Principles of Law 64-00 ...........................................................................................7 5.3. Objectives of Law 64-00 ..........................................................................................7 5.4. The Ministry of Environment and Natural Resources ...............................................7 5.5. Administrative instruments ......................................................................................8 5.6. Obtaining Licenses and Permissions.........................................................................8 II. Methods .............................................................................................................................9 6. Description of the Study Side ..........................................................................................9 6.1. Geographical Aspects...............................................................................................9 6.2. Forest Cover in the CAY ..........................................................................................9 6.3. Hydrological Aspects of the CAY .......................................................................... 10 6.4. Hydroelectric aspect ............................................................................................... 10 7. Purpose of the Study ..................................................................................................... 11 8. Research Questions ....................................................................................................... 11 9. Methodology ................................................................................................................. 11 ii III. Results ............................................................................................................................ 13 10. Typology of EGS ........................................................................................................ 13 10.1. Definition of EGS ................................................................................................ 13 10.2. Classification of EGS ........................................................................................... 13 11. Identification of potential EGS Provider and Buyer ..................................................... 17 11.1. Characteristics of Watershed Protection Markets .................................................. 17 11.2. Potential Buyer and Provider of EGS ................................................................... 17 11.3 Relevant EGS for the CAY on the Buyer Side ....................................................... 18 11.4. Relevant EGS for the CAY on the Provider Side .................................................. 18 12. Evaluation Typology of EGS....................................................................................... 20 12.1. Ecologic Valuation ............................................................................................... 20 12.2. Socio-cultural Valuation ....................................................................................... 20 12.3. Economic Valuation ............................................................................................. 21 12.4. Evaluation Method for the CAY ........................................................................... 23 13. Quantitative Evaluation on the Provider Side .............................................................. 24 13.1. Classification Typology of the Affected Sites ....................................................... 24 13.2. Land Use Distribution in the CAY ....................................................................... 24 13.3. Slope Situation in the CAY .................................................................................. 26 13.4. Land Use Distribution According to Slope Classes ............................................... 27 14. Quantitative Evaluation on the Buyer Side .................................................................. 29 14.1. Technical Facts of the Tavera-Bao-Lopéz Angostura Complex ............................ 29 14.2. Sedimentation in the Tavera Reservoir ................................................................. 29 14.3. Reservoir Lifetime of Tavera Reservoir ................................................................ 30 15. Economical Valuation on the Provider Side - Opportunity Costs for Land Use Changes ......................................................................................................................................... 33 16. Economical Valuation on the Buyer Side – Economical Value of the PES Project ....... 34 IV. Discussion ...................................................................................................................... 36 17. Provider and Buyer of EGS and the Relevant EGS in the CAY ................................... 36 18. Evaluation Typology and Methods of EGS .................................................................. 36 19. Quantitative and Economical Evaluation on the Provider and Buyer side .................... 37 V. Conclusion ....................................................................................................................... 38 VI. Recommendations .......................................................................................................... 40 List of References ................................................................................................................. 41 iii Appendices ........................................................................................................................ - 1 - 1. Calculations for scenario No. 1................................................................................... - 2 - 2. Calculations for Scenario No. 2 .................................................................................. - 6 - 3. Calculations for Scenario No. 3 ................................................................................ - 17 - 4. Explanations ............................................................................................................ - 24 - 4.1. Abbreviations .................................................................................................... - 24 - 4.2. Calculations ...................................................................................................... - 24 - Table of Figures Figure 1 Location of the CAY ................................................................................................9 Figure 2 Relief map of the CAY, including the five major cities ..........................................