INTERNALIZATION OF WATERSHED ENVIRONMENTAL SERVICES Luis Gamez Public Utilities Company of Heredia (ESPH) S.A. Heredia, Costa Rica Ground water endowment in the Heredia region (Adapted from J. Reynolds, 2003) Nicaragua Mar Caribe Océano Pacífico Panamá San José Heredia San Rafael LANDUSE OVER THE GROUNDWATERS Agriculture 38% Urban 24% Source: J. Reynolds, 2005 Forest 6% Grassland 32% THREATS TO WATER QUALITY & SUPPLY Upper watershed: forest and marginal dairy Mid: agriculture and urban sprawl Lower watershed: increased water demand and waste water Nitrogen and VOC´s LEGAL FRAMEWORK Utility rates Public utilities regulation #7593 Service & quality Health and public utilities ESPH S. A. Environmental Health regulation Water companies regulations Safe drinking water regulation Law ESPH #7789 Environmental services Forestry law #7575 Biodiversity law #7788 Environment law #7554 Water consumption (m³) and endusers by county, 2009 40023 4553 12742 53518 Water sources, (deepwells not included) Liter /second WATER PRODUCTION ESTIMATION OF GREEN FEE Use value (opportunity cost) n αi Bi Abi (1 + βi ) i =1 Oci VC = ∑ VC = 0.414 * 53000 * 5561.56 (1 + 0.80 ) = 2.70 colones/m3 of water 81390000 ¢1.90 /m3 Recovery & Protection (replacement cost) n δ ijCij i =1 Oci VP = ∑ VP = ¢3.80 /m3 $0.01 *(2004-2009) 0.414 *128777 * 7469.28 = 4.89 colones/m3 of water 81390000 579 colones = 1 US$ € $0.005 (2000-2004) ¢9.65 /m3 $0.02 *current amount GREEN FEE Institutional Mechanism Administration of Payment of Environmental Services External Advisory Committee Green Free FUND $ ESPH-PROCUENCAS Environmental Management Department Other fuding sources PES Contract Third party monitoring ENVIRONMENTAL SERVICIES PAYMENTS CONTRACTS 1. Forest conservation and succession 2. Reforestation • $120 /ha/yr. • 10 yr • $1200 /ha/ 5 yr. • 5 yr. Voluntary and flexible PRIORITY AREAS TOTAL AREA 1901.7 ha ESPH Water intake and protection zones RESULTS • 1191 hectres • . • . • . • 5 • . Benefits • • • • • • “Know -how” y learn by doing Activates the citizen´s interest & env. responsibility Direct tangible contribution of enduser to capitalize the private benefits enjoyed Cost-benefit Public-friendly Accountability LESSONS • Descentralization & Local decision • Emphasis on prompt action not on fund intensive • Local solution by sharing costs / benefits • High complementarity to National scheme • Simplicity & creativity • Does not replace land use planning/zoning • Adaptation to climate variability • citizens participation & WTP • Information and education on value • Potential for public-private alliance • Drives public & media attention / support • Low cost and high benefit Luis Gamez [email protected] / [email protected] www.esph-sa.com
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