Payments for watershed services

A watershed is an area that drains to a common point, making it a useful unit for managing water resources. The key characteristic of watersheds, from a human perspective, is that water generally flows downhill, so that upstream land uses affect downstream conditions through hydrological linkages. All over the world, watershed management efforts aim to influence this upstream-downstream relationship. They do so by encouraging upstream land-use practices that are consistent with maintaining the watershed so that it yields water that is unpolluted, low in sediment, buffered against flash floods, and with minimal fluctuations in dry-season and groundwater flows (Swallow et al., 2004). Local conditions determine what is possible and how best to achieve it. The basic scientific challenge in managing watersheds is to understand how upstream land-use practices affect natural resource conditions downstream, while the basic socioeconomic problem is to encourage people in an upper watershed to adopt those practices even though the benefits will accrue downstream ' in other words, how to encourage them to deliver this environmental service.