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Centre for Development, Environment and Policy (CeDEP)

New research: Market-Based Mechanisms for Protection of Water Resources

Tamar Lakes

30 July 2010

Laurence Smith and partner researchers at the University of East Anglia and Cornell University have been awarded a new project under the RELU programme’s 4th round "Adapting Rural Living and Land Use to Environmental Change" - a joint call with the Living With Environmental Change programme. Following from and building on existing research on Catchment Management for Protection of Water Resources also funded by RELU, the new project will partner and evaluate an innovative ‘Payments for Ecosystems Services’ (PES) scheme for water protection being developed by an environmental charity – the Westcountry Rivers Trust - in South West England.  

In the UK, changes in the hydrological cycle with climate change will have significant impacts. Predictions are uncertain but it is expected that we will have warmer and drier summers, and warmer and wetter winters. The possible changes in temperature and rainfall within our children’s lifetime are alarming as many of our catchments are already under stress from our high demands for water. Water quality has been improving but pollution with nutrients, faecal organisms and sediments from farming remains a concern. Urban runoff and remaining deficiencies in sewage treatment are also problems. The risk and severity of flooding seems to be increasing.

We need improved ways to protect water resources at source and alleviate flood risk. This requires the cooperation of land users and some change in their land use and farming practices. Attempts to achieve this to date have involved a combination of advice and capital grants backed up by regulation. This project proposes that what has been lacking has been the ability to provide incentives to landowners to go further in protecting water by setting aside the limited areas of land with most beneficial effect. Typically these will be steeper slopes or low lying, often waterlogged and along watercourses. Despite their lower productivity they are intensively farmed and their retirement will incur a loss in income. The project will investigate whether a PES scheme can address this. PES involves a voluntary transaction in which the beneficiaries of environmental services pay for their provision and the providers of those services get paid to provide them.

Source: Laurence Smith