This is where the water fund enters the equation. Water funds provide a mechanism for downstream users to directly or indirectly compensate upstream users for activities that deliver water benefits to the payer.
Public and private water users, including businesses, utilities and local governments, invest collectively in conservation of the watersheds from which they source their water.
In fact, for half of the cities that the Conservancy studied, such a mechanism could fund source water protection activities at a cost of just US$2 or less per person per year.
Nairobi, Kenya, offers a good example. The conversion of forests and wetlands to agricultural uses in the Upper Tana River watershed, which supplies Nairobi’s water, has led to heavy sedimentation in the river—reducing the capacity of reservoirs, impacting the delivery of water to Nairobi water users and limiting hydropower generation during low-flow periods.