Description

Mexico’s Payment for Hydrological Environmental Services (PSAH) Program contributes to the country’s efforts to address high rates of deforestation and water scarcity. Water user fees fund payments to forest owners for the environmental services of watershed protection and aquifer recharge. This paper describes the structure and function of the PSAH and offers assessment of its impacts and effectiveness, with suggestions for improving the program.

Contents:

1. Introduction 2. Main actors 3. Design issues: Financing the PSAH 4. Design issues: Paying participants 4.1. Eligibility and prioritization 4.2. Payment levels 4.3. Working with communities 4.4. Conditionality 5. Results for 2003-2005 5.1. Avoiding deforestation 5.2. Targeting areas of water scarcity 5.3. Reaching the poor 6. Conclusions and next steps