1 Water Funds © Ami Vitale Andrew Deutz, Ph.D. Director, International Government Relations The Nature Conservancy

2 Ecosystem Services Model Water users Restoration & Conservation activities Income generated Forests producing clean water

3 Users Providers Quito, Ecuador Population: 2 million Condor Bioreserve & Surrounding farmlands $ CLEAN WATER $ Financial Fund Water Funds Board Water Fund ENVIRONMENTAL SERVICES MODEL

4 Source: Ciat, 2007 (TNC), Bogota Water Fund Water quantity Quantity of sediments (Component of Quality) Conserved Area Uses inside Protected Area Outside Protected Area m3/ha/year Ton/ha/year Regulation significant but not quantified 10:1 Savings USD 4.5M year Economic rationale

5 Users Providers Sugar Cane Growers Farmers in watersheds $ ACCOUNTABILITY Reporting $ Fiduciary fund Board WATER FUND Outreach Feasibility studies Start Up Seed funding Growing Capitalization Consolidation ENVIRONMENTAL SERVICES MODEL asocaña

Available at: ConserveOnline.org

7 Hydrological services: Status of supply and demand? Environmental, technical and socio-economic expected benefits or impacts of the Fund? Where should the Fund invest to increase and maintain hydrological services and get the greatest possible returns on investment? What is the cost of maintaining or improving the hydrological services? How do hydrological services vary under land-use and climate changes scenarios? What other environmental services can the Fund help maintain or improve? Conducting feasibility studies

8 Use of hydrological models : -InVEST (Natural Capital Project :Stanford University-TNC-WWF); SWAT; FIESTA -Water purification; Reservoir sedimentation; Water yield; Hydropower; Flow regulation; Sediment production; fog interceptation -Prioritization of places and types of interventions (forest restoration; springs protection; improved cattle management, etc) -Building scenarios; optimize ecosystem services and economic returns Conducting feasibility studies

9 Highest Return on Investment Contribution to aquifers Contribution to flows SedimentsCoverage Highest priority areas for conservation Biodiversity connectivity Water for life and sustainability

10 Climate change analysis : -Analysis of climate change in the future: climate change models -Analysis of climate change impacts on hydrological services -Development of climate adaptation strategies Conducting feasibility studies

11 Changes in water quantity Adaptation to climate change: where to invest and how?

12 Socioeconomic analysis: -Valuation of environmental and socio-economic benefits -Stakeholder analysis – who benefits, and who decides? -How much the fund will have to raise to meet the ES targets Legal and institutional analysis -Current national legislation that should be applied -Legal nature of the WF (trust fund (public/private); existing environmental fund; new organization; bank account) Conducting feasibility studies

13 Investments Private and communal lands 1.Direct payments 2.Best agricultural and cattle ranching practices (silvopastoral systems) 3.Riparian forests 4.Reforestation & restoration 5.Other projects Public areas 1.Park guards 2.Implementation of management plan © Fundación CIPAV

14 WATER MONITORING Water Monitoring Sites Precipitation 3 sites Flow 3 sites Quality 9 sites 9 items Parâmetro Analítico PH Turbidez DBO Cor Coliformes Termotolerantes Oxigênio dissolvido Nitrogênio amoniacal Fósforo Total Temperatura Community engagement

Water Funds in Latin America: 1 Mature and strengthened 10 Created and operating 17 in Design and Negotiation 15 in Evaluation “Exports” under Development: New Mexico, USA Texas, USA, Kenya