The Panama canal produces around 15% of the Panama's gross domestic produce (GDP), and requires large quantities of water to function. The surrounding watershed has been subjected to large scale deforestation and an increase in the population. In order to reduce siltation and improve water storage capacity, this project will look at the feasibility of implementing a payment for environmental services project. It will examine land use alternatives and benefits, evaluate water services and their values, and develop tools to monitor soil and water quality.