Around the world there are a growing number of contractual
arrangements—sometimes called “water funds”—between municipal water
companies and upstream land owners, aimed at improving source water
quality and quantity. Yet the potential for cost-effective watershed protection
is much larger. Mobilizing the investments needed to realize this
potential hinges in part on the business case for water users—that is,
the competitiveness of watershed conservation programs with conventional
Yet credible economic assessments of watershed conservation
or restoration are almost entirely absent from the literature, leaving the
business case for watershed conservation an important yet largely unanswered
question. Likewise, those interested in evaluating the business case in their
own geography lack the examples and tools to do so in a robust manner.
Remedying the situation requires a
rigorous analytical framework to assess the return on investment of
watershed conservation. The Nature Conservancy—in collaboration with Stanford University, EPAGRI-CIRAM and EMASA—recently
conducted such an analysis of a payment for watershed ecosystem
services (PWS) program in Santa Catarina State, Brazil.
(Download the report above and here, also available in Spanish and Portuguese).
The case of Camboriú River Watershed
Camboriú in Santa Catarina state is a famous beach destination in
southeastern Brazil that attracts increasing numbers of both domestic
and international visitors. As a result of the booming tourism and civil
construction sectors that now dominate the local economy, the combined
population of Balneário Camboriú and neighboring Camboriú city,
approximately 200,000 year-round, now swells to more than 800,000 during
the summer high season.
Both municipalities count on the Camboriú
River as a reliable low-cost source of drinking water supply. However,
the increasing demand, especially during the summer tourist high season,
severely stresses this supply.