Watershed services for hydroelectricity scheme in Nepal: Transition from "command and control" regulations to "buyers" and upland "sellers" of environmental services

A major supplier of Nepal's hydropower, the Kulekhani watershed was the target of government watershed conservation activity in recent decades, mandating catch dam construction, reforestation with pine trees and changes in land use practices. These measures were successful in reducing sedimentation and providing the environmental services need to maintain hydroelectric dam activity. However, the royalties paid by the hydropower company did not go toward compensating the upland communities that provide these environmental services. RUPES has worked to create more direct linkages between the providers and beneficiaries of environmental services in the watershed and empower upland communities to have more voice and influence in their land use management decisions. In 2006, 20% of the local district's share of the hydropower royalties went to an Environmental Management Special Fund (EMSF) to finance conservation and development activities proposed by the communities.