Developing markets for water services from forests: Issues and lessons for innovators


N. Johnson; A. White; D. Perrot-Maitre

Type of Document:
Research Report


Not Available

Date of Publication:

Place of Publication:
Not Available


(Excerpt from Introduction): The purpose of this paper is to help forest owners, policymakers, and investors assess the feasibility of developing markets or other financial incentive mechanisms for watershed management and give them General guidance on developing new mechanisms. Our overall Goal is to help forest owners add financial value to their forests based on the water-related benefits they provide, thus increasing their incentive to maintain healthy forests. This paper presents an Overview of findings derived in large part from a global scoping of innovative cases of markets and financial incentive mechanisms prepared for Forest Trends by Perrot-Maitre and Davis (2001).

In this Overview, we begin with a Summary of the biophysical relationships that link forests, water, and people. We then introduce the different types of financial mechanisms for watershed management, illustrate how they are currently being used in practice, and focus on a set of questions that can help guide the development of new mechanisms. From analyzing current mechanisms we derive preliminary lessons and rules of thumb for innovators. We conclude with recommendations for next steps in advancing the development of financial incentive mechanisms for watershed management.

Table of Contents:

Introduction Financial mechanisms for watershed management Key quedstions in developing markets for water services from forests Early lessons and rules of thumb for innovators Next steps: Advancing the development of markets for watershed management Bibliography Annex 1: Features of innovative cases of watershed management from around the world

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