Water Convention (http://www.unece.org/fileadmin/DAM/env/water/pdf/watercon.pdf) requires from the Parties to take all appropriate measures to ensure conservation and, where necessary, restoration of ecosystems (article 2). The Convention’s provisions are not limited to transboundary ecosystems.

Ecosystems provide a wealth of services that are fundamental for proper environmental functioning and economic and social development. While the demand for these services, including provision of clean freshwater, is continuously increasing, the capacity of ecosystems to provide such services is hampered by their ever-growing degradation which diminishes the prospects of sustainable development.

The Water Convention provides for wide range of measures aimed, inter alia, at conserving and restoring ecosystems. These include the establishment of water-quality objectives and criteria, development of concerted action programmes for the reduction of pollution, etc. Both water quality and water quantity are essential elements in securing the protection and conservation of ecosystems.

Payments for ecosystem services (PES) are an innovative tool to protect and enhance the services provided by ecosystems. It is designed to provide incentives to land users, on behalf of service beneficiaries, that are expected to result in continued or improved service provision, so a specific user or society will benefit more broadly.

To reflect good practices in order to support Governments at all levels of decision-making (global, regional, transboundary, national and local) in the implementation of PES the Parties to the UNECE Water Convention adopted The Recommendations on Payments for Ecosystem Services in Integrated Water Resources Management (http://www.unece.org/fileadmin/DAM/trans/osce/osceunece/misc_Zaragoza_Recommendations.pdf) at their fourth meeting (Bonn, 20–22 November 2006).

The main objective of these Recommendations is to provide guidance on the establishment and use of PES to implement IWRM through the promotion of the protection, restoration and sustainable use of water-related ecosystems at all levels, from local to transboundary. Recommendations contain a set of measures to protect and enhance the services of water-related ecosystems such as forests, wetlands, grasslands, and agricultural land. These services include water-quantity-related ecosystem services, such as flood protection and water regulation (runoff, infiltration, retention and storage), which are provided through forestation, conservation agriculture and flood-plain restoration. They also include water-quality-related services, such as curbing water pollution, which are provided through afforestation and forest management and protection, intensification of (agricultural) land use, integrated pest management, pollution quotas and conversion or restoration of natural land cover. Other water-quality-related services, such as water purification services, can be provided through wetlands’ restoration or creation.

Useful examples of a PES scheme applied in the UNECE region are described in the Recommendations; the Swiss Nitrate Strategy is one of them. To reduce the pollution of aquifers with nitrates, a PES scheme was established in Switzerland to change the management practice in agriculture beyond existing legal requirements and the existing recommendations of good agricultural practice. To achieve this more stringent goal, payments to farmers are being made ranging from 130 per hectare a year for measures in open cultures to 1,250 Euro for enhancing a meadow’s surface. The funding comes from the Federal Government, the Swiss Cantons and the water supplier, as all these parties profit from decreasing pollution levels in groundwaters as a source of drinking water.

In order to demonstrate the applicability of PES schemes to water management issues, to learn from practical experience and to promote PES schemes, the Parties to the Water Convention initiated a number of pilot projects, including a pilot project in the basin of the Chon-Aksuu River in the Issyk-Kul Oblast in Kyrgyzstan and a pilot project in Armenia in the upper part of the Hrazdan River up to the settlement of Qaghsi, including the right tributaries Marmarik and Tsaghkadzor.

Further reading:

1. Thematic Issue of Science for Environment Policy (http://ec.europa.eu/environment/integration/research/newsalert/index_en.htm) published in March 2012 explores research which can help guide effective PES schemes: http://ec.europa.eu/environment/integration/research/newsalert/pdf/30si.pdf
2. PES scheme in the Chon Aksuu watershed in Kyrgyzstan: http://www.solutionsforwater.org/solutions/pilot-pes-scheme-in-the-chon-aksuu-watershed-kyrgyzstan
3. Introduction of payment for ecosystem services schemes in upper Hrazdan pilor river basin in Armenia (with executive summary in Russian) http://www.unece.org/fileadmin/DAM/env/water/npd/Report_on_PES_in_Armenia_Eng.pdf
4. Payment for environmental services: first global inventory of schemes provisioning water for cities. 2011. http://www.fao.org/nr/water/down/PES_Water_for_Cities.pdf
5. IWA Water Wiki. Payments for watershed services. http://www.iwawaterwiki.org/xwiki/bin/view/Articles/Paymentsforwatershedservices#HRelatedPublications