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Int. J. Pluralism and Economics Education, Vol. 3, No. 2, 2012 173

Copyright 2012 Inderscience Enterprises Ltd.

Integral solutions to complex problems: climatechange, adaptation policies and payment forecosystem services schemes

Andrs Vargas

School of Economics.,Sergio Arboleda University,Calle 74 no. 14 14, Bogot D.C. ColombiaE-mail: [email protected]

Mauro Reyes*

National Natural Parks of Colombia,Sustainability and Environmental Services Unit,Cra. 10 No. 20 30, Bogot D.C. ColombiaE-mail: [email protected]*Corresponding author

Abstract: Payment for ecosystem services (PES) schemes have beensuccessfully applied in many countries. This paper argues that such schemes, tobe effective must be applied holistically, otherwise if applied narrowly mightexacerbate the problem, both globally and locally. This paper gathers data fromtwo sites in Colombia, each of which has implemented a PES, one holistically

and the other not, and compares the two.Keywords: resilience; payment for ecosystem services; PES; socio ecologicalsystems; pramos; watershed management; Colombia.

Reference to this paper should be made as follows: Vargas, A. and Reyes, M.(2012) Integral solutions to complex problems: climate change, adaptationpolicies and payment for ecosystem services schemes, Int. J. Pluralism andEconomics Education, Vol. 3, No. 2, pp.173188.

Biographical notes: Andrs Vargas is an Economist at the Universidad delNorte in Colombia. His recent research focuses on the interaction between localcommunities, conservation and biodiversity.

Mauro Reyes is actively involved in biodiversity conservation financing. He

received his Masters degree in Holistic Science from Schumacher College(UK). His academic interests include holism, history of science and complexitytheory.

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Integral solutions to complex problems 175

2 Research sites and methods

Our research was undertaken in the Campohermoso sub-basin area since it has thefollowing representative characteristics: its nearby areas share socioeconomic practiceswhich create soil erosion, water pollution, deforestation and slides; it is located next to aprotected area SFF Iguaque which has been threatened by socioeconomic practicesthat require arrangements with local people.

The Campohermoso basin belongs to the Cane-Iguaque watershed located atChiquiza, Gachantiv, Arcabuco and Villa de Leyva (also an important tourist site)municipalities at Boyac. Campohermoso has 5,254.3 Hectares with slopes between 12%and 50% at an altitude between 2,300 to 3,750 meters in the paramo zone of the NaturalPark Iguaque. Its average annual rainfall is 1,600 mm with significant aquifer formationsas an important water source, and well-drained moderate-low fertility soils

(COPOBOYAC et al., 2006).

Figure 1 Map of research sites in Boyac Colombia (see online version for colours)

Campohermoso

Sub-basin

Villadeleyva

La Colorada

PES Area

EL Roble

Sub-basinVilladelyva

Acueduct

Cane IguaqueRiver

Legend

Interviews Sites

Pramoand

Turberas Area

Iguaque NaturalPark Limits

3000 masl

3500 masl

La Colorada

Sub-basin

SubBasinlimits

Cane IguaqueWater shed limits

2100 masl

2.1 Socioeconomic description

The Campohermoso sub basin area has 3,067 people in total, all of them peasant-likewith low and medium income levels; a population density of 68 people per square; and anannual population growth of 2.42%. 64% of the land is dedicated to pastures and crops,with 1,193 plots and an average size of 5.25 Ha. The predominant productive systems aretraditional rearing and milk production and occasionally combined with potato

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176 A. Vargas and M. Reyes

monoculture; potato monoculture crops and simple accumulation of subsistence capital;

and potato monoculture crops with Andean tubers (COPOBOYAC et al., 2006). TheQuality Life Index is the lowest in the basin with a value of 36.1.

2.2 Specific problems at the study case area

The lack of conservation practices and soil erosion has affected environmental goods andservices. In particular there is an increasing water demand by Villa de Leyva andChiquiza municipalities where water availability, regulation and pressure have beenaffected. This situation is even more serious in dry years reaching 80% water reduction.

Table 1 Water balance and scarcity index Campohermoso Basin

Formula Volume (M3) Parameter %

P 320,0450.71 Precipitation-(M3

/month) 100SUR Q 20,849,896 Runoff-(M3/month) 6.51

SUB SUR Q 357,592.25 Lateral flow-(M3/month) 11.17

ETR 2,048,892.65 Real evapotranspiration-(M3/month) 64.02

OHG 1,151,558.06 Water supply-(M3/month) 35.98

Demanda

DHA 192,300.4 Acueducs water demand-(M3/month) 25.16

DHC 506,193.01 Crops water demand-(M3/month) 66.23

DHP 12,960 Water demand privates-(M3/month) 1.70

DG 71,1453.41 Global demand-(M3/month) 100

DG/OHG 61.78 Scarcity index Very high

Source: COPOBOYAC et al. (2006)

The scarcity index the rate between available water supply and demand is very highin the case study area, with values greater than 61%, where levels greater than 20%suggest and urgency to manage water supply and demand (United Nations, 1997).

2.3 Research method

A flourishing literature exists regarding resilience management in socio-ecologicalsystems.5 Given its newness, the theoretical framework is still being developed, as isfinding a standard procedure for testing resilience. The research methodology proposedhere is based mainly on 15 socio-ecological systems presented as case studies by

members of the Resilience Alliance; likewise it gathers inputs from a paper developed bythe Alliance that proposes an evolving approach to analysing resilience in SES as a basisfor managing resilience within a four-step framework, involving close involvement ofSES stakeholders (Walker et al., 2002). Our methodology also recognises the perceptionsof local stakeholders for understanding processes by which multiple stressors and climateaffect livelihoods (Bunce et al., 2010; Reid and Vogel 2006). This, along with ourwillingness to share time with people in their own context, and facilitate theirself-analysis differentiates our analysis from standard neoclassical analysis (Bortoft2007).

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Table 2 Research techniques and data collection

Step Step objectives

Site andnumbers

(Latitude: 3,000masl in

average)

Researchtechnique

Data collected

1 To establishthe historicalprofile in theSES.

To identify howlocal people haveaffected theirenvironment forthe sake of theirsocial andeconomicdevelopment

Elders,peasants, home

ladies andNatural Parksemployees ofthe site (n = 6)

Key informantinterviews

Villagemapping,in-depth

interviews onchange and

stressors

To identifychanges, causesand impacts doneto their naturalcontext

Historicaltimeline

To identifyclimate changesymptoms

2 To identify keyvulnerabilities:economic,social, andenvironmentalfrom thecontext.

To determinehow prepared thecontext is toexternal shockssuch as climate

change andeconomic crisis

Elders,peasants, home

ladies andNatural Parksemployees ofthe site (n = 6)

Key informantinterviews.



stressors

To determinevulnerabilityvariables.

3 To determinehow the PESschemecontributes oraffects theidentifiedvulnerabilities.

To establishdifferent viewsfromstakeholdersrelated to thePES scheme.

Group meetingin the study site.

(n = 10)

Key informantinterviews



stressors

To determine thePES effectamong thevariablesidentified.

Head of theNatural Park

Focus groups

We designed a three-step methodology (see Table 2) which allows us to achieve inputsfor elaborating the current construction of Iguaque Natural Park Management Plan,accounting for climate change effects and suggest improvements and strategies forimplementing the proposed Payment for Environmental Services scheme in the area.

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2.4 Major events: historical profile

Investigating the historical profile reveals that new agricultural practices introduced fromcolonial times consolidated unsustainable farming based on potato monoculture andcharacterised by a high use of fertilisers and harmful land clearing procedures likelogging and fires. Practices which constitute key vulnerabilities to the SES since have hada visible and damaging impact to soils and water sources alongside climate variabilityand low life quality levels. Figure 2 identifies key events in the historical timeline relatedto the SES.6

Figure 2 Historical timeline at Campohermoso watershed (see online version for colours)

Colonial period: Urbanization; Land privatization

1600

1800

Wheat crops introduced. Desertification.

First Acueduct Villa de Leyva.

Church takes the control of land, economy and slave

workforce.

1850Land monopolization. Indigenous people and Church are

expulsed.

1950

Potato crops spreading. New varieties introduced.

Organic agriculture was changed by the Green

Revolution one.

1970

Plots fragmentation

2000

Extreme hot temperature events.

1982 and 1992 (Nio phenomenon)

Climatic variability. Wind augmentation;

rainfall reduction; Less water availability2010

Fertilizers usage increase.

Iguaque Natural Park Declaration (1977)

During the colonial period (17th to 18th centuries) indigenous settlements were reducedto urban cores while the communal use of land and natural resources was abolished andreplaced by private property. Likewise well-kept forests by the indigenous disappeareddue to cattle ranching and the so-called clean agriculture of wheat crops. Low croprotation, and ploughing reduced the lands productivity and increased erosion, somethingthat never happened before. During the Republican time, the church became the principal

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landowner in the Iguaque Watershed, controlling the territory through a slave working

force. In 1850, indigenous reservations and non-use lands were expropriated by thegovernment; this reinforced large state properties monopolised by few landowners whichallowed some peasant families to continue working for them.

During the 1950s new varieties were introduced and traditional and organicagricultural practices were replaced by green revolution. This was accompanied by theIguaque Natural Park Declaration (1977) and a policy which fragmented large stateproperties to be sold to local farmers, which boosted landscape transformation for potatomonoculture crops replacing traditional polyculture crops while worsening water quality.Area wetlands were dredged for developing crops and cattle raising, now very typicalin the area. Given growing population and its effect on water supply, the firstEnvironmental Council in Villa de Leyva was established in 1998, principally to recoverthe Cane-Iguaque river watershed. Today, wind change patterns, rainfall reduction,

longer warm periods and climatic uncertainty are the new norms.

3 Key vulnerabilities and strengths

According to the Colombian Second National Communication to the Parties of theUNFCCC, Boyac is potentially most affected by climate change. Based on theevaluation of global climate models which best represent regional climate, and with thehelp of high-spatial-resolution regional climate models, simulations were made ofpossible climatic scenarios for the remainder of the 21st century. The most probablescenario is the following:

In the Andean region, the most notorious changes can be expected withtransition from a semi-humid climate to a semi-arid one, and this willparticularly affect Boyac. As a matter of fact, Boyac is one of the areas withthe largest peasant smallholding areas which might suffer very high in potentialimpact due to reductions in rainfall (IDEAM, 2010b).

General observations made by the second communication comport with respondents inthe study site. Table 3 indicates key stressors as a source of the SES vulnerability,identified by respondent interviews. Climatic variation emerges as a key stressor. Someinterviewees noted the arrival of new plagues and pests, along with lower overall soilquality. Needless to say the plot fragmentation that began forty years and the potatomonoculture has exacerbated the vulnerability.

Table 3 Stressors reported at the study site Campohermoso

Stressors Perception of stressors and their impacts

Climatic variation Long warm periods are of special concern.

Long rains not frequent as before.

Climatic variations have affected water sources

Warm periods are longer (and of higher temperature) than before.

2011 warm period was the strongest in last 50 years.

Crops got burned and cattle had to be moved.

Fertilisers pricesincrease

Rain periods are shorter than before.

Higher temperatures and winds damage crops.

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Table 3 Stressors reported at the Study site Campohermoso (continued)

Stressors Perception of stressors and their impacts

Soil quality reduction Increased need for using a higher quantity of fertilisers.

Worms affect potato production.

Bad quality harvest.

New plagues.

Completely dried land.

General production costs increase.

Water scarcity River dryness.

Water sources become dry.

Plots fragmentation Land scarcity forces monoculture, i.e., potato crops.

3.1 Conservation practices at the study site: the role of National ParksAuthority as a key strength

One of the remarkable aspects at Campohermoso is how successful sensitisation activitieshave been during the last six years, enabling the National Parks Authority to erect andprotect the Iguaque Natural Park buffer zone. A key strategy has been making peopleaware of their environmental context through several workshops and trips around thearea, while learning the most important rivers and lakes and the watershed boundaries. Inaddition, the indigenous got to know each other increasing their awareness of watermanagement practices in the watershed. As a result, the indigenous voluntarily acceptedconservation and agricultural practices through demonstrative projects such as live

fences, organic fertiliser use, while ceding, in some cases, up to 3 meters of their territoryalong the river to protect against water pollution. Another key strategy has been teenageeducation via a communitarian endemic species bank where they learn sustainableagricultural practices and how to restore water recharge sites affected by pastures, firesand crops.

4 The role of the PES scheme: some pros and cons

Do PES schemes foster resilience or undermine it? It depends on how the instrument isintegrated into the relevant SES. Although there is agreement on what PES schemes areand their basic defining characteristics (Engel et al., 2008), every PES initiative isdifferent because of the specific characteristics of each environmental problem. Theinstrument affects the structure and functioning of the SES through various channels,some related to ecological properties and others related to the social properties.Consequently, the effectiveness and unintended effects of the PES programme criticallydepends on the interactions with other parts of the SES.

In what follows we compare two PES initiatives in the La Colorada andCampohermoso watersheds intended to improve water services, taking into account theenvironmental, economic and social dimensions of the SES. Special attention is given tothe design process of the schemes, which is important because it identifies the degree ofcommunity involvement and future support of the programme. In some cases, PES result

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from self-organised communities; in others they are initiated by government officials, or

jointly by community members and the government. Real community driven projectsallow participants to experiment and learn from their own experience and that of others,incorporating the specifics of a particular setting, thus avoiding the blueprint approachdefined when policy makers, citizens, donors or scholars propose uniform solutions to awide variety of problems (Ostrom, 2009). Of course, community driven programmes canalso suffer from rent seeking and corruption (Conning and Kevane, 2002).

The La Colorada watershed extends 4,244 Ha, of which 1,697 (40%) are locatedinside the SFF Iguaque, the protected area managed by the national government, in themunicipalities of Arcabuco and Villa de Leyva, Boyac. The main activity is agriculture,primarily small-cattle ranching and basic crops. Problems regarding water quality andquantity led 470 downstream households to search for a solution. Initially they heldmeetings to better understand the causes of the problem and to propose solutions. They

were supported by the National Parks Authority. Another watershed in the region adopteda PES scheme,7 so the La Colorada households thought it would be worthwhile to forgean agreement with upstream landholders in order to induce favourable land use changes.

Through the Water Committee, downstream households negotiated bilateralagreements with nine landholders. The area under consideration is entirely located insidethe protected area so landholders already had land use restrictions. The agreements werebased on the particular condition of each owner and its property, giving special attentionto the owners income. As a result payments were differentiated among landholders. Thisparticular PES design favoured equity concerns over efficiency (Pascual et al., 2009).The agreements included annual payments based on the opportunity cost to thelandowner as well as purchasing the properties. Regional and national environmentalauthorities provided funds and technical assistance for reforestation and ecologicalrestoration.

Three points are worth noting: one, the PES scheme resulted from local communityconcerns after they had discussed and better understood the problem; two, governmentofficials, NGOs and other outside organisations were included gradually in theprogramme according to the needs and obstacles; and three, community decisions andinvolvement were facilitated by existing local institutions like the Water Committee. Theprocess started in 2005 and the PES was fully implemented by 2009.

In the Campohermoso watershed, the main activity is agriculture, especially potato,which is the main source of income upstream in Chiquiza municipality. Forest covers andwetlands are seriously affected by agriculture in the recharge area of the basin, affectingthe quantity and quality of water consumed by downstream users in Villa de Leyva animportant tourist centre. Upstream households obtain water from the turberas at the topof thepramo so they are only partially affected by land use decisions and its effects on

water availability.The environmental conflict between upstream and downstream households was first

identified by the National Parks Authorities and was not initiated by the community.Subsequently, other environmental authorities and organisations joined the process byproposing a PES scheme, using as a reference the recent experience with other regionalPES schemes.8 Later, local authorities assumed an active role mainly in the design of thePES scheme but not to discuss alternatives. Thus, the indigenous implemented apre-designed solution to a problem identified by institutions outside the community.

Downstream users were represented by the Mayor and Council members. Theexperience in other regional PES schemes indicated that through this approach only 44%

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of downstream users were aware of the programme; furthermore they did not know they

were paying to sustain the PES scheme (Moreno et al., 2009). Upstream landholders werealso represented by the Mayor and Council members but none of the landowners hadbeen consulted until mid-2010 about the feasibility of the scheme. Upstream, communityinstitutions are weak due to low commitment of members and weak reciprocity ties,meaning a low level of social capital.

Upstream landholders have strong cultural ties to the land and the potato crop, sowhen they were first asked about the possibility of changing land from crops toconservation they were reluctant to provide truthful information, when environmentalauthorities tried to determine the financial benefits of cultivating potato. Landownerswere not told about the ongoing PES scheme design. The process started in 2007 and bythe end of 2010 has not been implemented.

Four points are worth noting: one, this PES scheme is the outcome of a top-down

approach, where community members did not participate directly; two, governmentofficials initiated and led the process; three, there are no local community institutionssuited to tackle collective choice problems; and four, for upstream landowners, land usechanges from cultivation to conservation did not solve problems related to water scarcity.

Table 4 Climate change vulnerability assessment (before PES implementation)

Dimension MeasureWatershed

Campohermoso La Colorada

Exposure Water scarcity Scarcity index1 61% 36.24%

Sensitivity Human Pop. density: pop/Km22 68 39

Human Agriculture

dependency3

High Medium

Ecological PA coverage4 70.40% 40%

Adaptivecapacity

Socio-economics UBN providers5 48.40% N.A.

UBN users5 17.50% 35.54%

Economic dependency6 18% 18%

Technology Adequate coverage7 > 90% > 90%

Policy andinstitutions

Functional communityorganisations8

11% 50%

VulnerabilityHigh

vulnerableModeratevulnerable

Notes: 1Water demand/water supply, source: POMCA Cane-Iguaque (2008)2Source: POMCA Cane-Iguaque (2008)3Based on authors personal experience4Percentage of the watershed inside a protected area, source: POMCACane-Iguaque (2008).

5Unsatisfied basic needs % of pop. Source: DANE6Dependency ratio, Source: DANE7Based on authors personal experience and DANE: water and sewage indexUBN

8# of water committees functioning/total know water committees, source:POMCA Cane-Iguaque (2008).

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PES schemes are institutional responses to changes in the SES; and PES schemes are part

of the SES, so how can we determine if the response promotes or undermine resilience?One approach is to determine if the response reduces the vulnerability of the system,which is better defined as the degree to which a system is susceptible or unable to copewith adverse effects of climate change (IPCC, 2007).

Table 4 indicates an assessment of current vulnerability in the watersheds accordingto three dimensions: exposure the biophysical impacts of climate change onagroecological systems;sensitivity the degree to which a system is either adversely orbeneficially affected by climate variability or change, and adaptive capacity the abilityof institutions and individuals to avoid potential damage, to take advantage ofopportunities or to cope with the consequences of change (Asian Development Bank andInternational Food Policy Research Institute, 2009). We used available data and personalexperience.

Because data indicate that the most critical biophysical impact due to climate changeis water scarcity; we took the scarcity index as an approximation of the first dimension ofexposure. The Campohermoso watershed presents a high percentage of water scarcitylikely to worsen during the next thirty years. Sensitivity depends on the number of peoplepotentially affected as well as the importance and fragility of the ecosystem. The systemis much more sensitive if local livelihoods depend on agriculture. Campohermoso withlow crop diversity and a strong potato cropping tradition is much more vulnerable thanLa Colorada in this dimension. Finally, we capture the degree of adaptive capacitythrough socio-economic characteristics, institutions and technology. Individual adaptivecapacity is positively determined by the level of education, wealth, income and access toinformation and technology; whereas community adaptive capacity depends on theeffectiveness of institutions.

As indicated in Table 4, in general terms the Campohermoso watershed is morevulnerable than the Colorada Watershed. The former is much more exposed, sensible andless capable of adaptation due to the absence of functional community organisations anda greater incidence of poverty than the later.

The PES scheme can potentially reduce vulnerability in both sites, but how much sodepends on the design process. In both sites the PES is expected to reduce water scarcity.According to the environmental authorities involved in the project the average annualrunoff in Campohermoso could increase 24% if every farmer targeted as a supplier of theenvironmental service changes current land use from cultivation to conservation(ESVILLA et al., 2010); thus, the proposed increased in environmental services couldmeet expectations only if local farmers agree with the project. This ideal scenario faces agreat risk because those farmers have not been fully and formally included in the designprocess. In Colorada, there is not an official estimate of additional water regulation

services due to the PES. Both schemes face the challenge of meeting the expectations ofthose involved, a risk that originates in the uncertainty surrounding the final effects of theland use changes on water regulation.

In a review by Calder (2005) evidence does not indicate unambiguous effects ofincreasing forest cover on run-off and regulation of flows, in particular the increase in dryseason flows. Project participants must be aware of this uncertainty so there are no falseexpectations; if not, the scheme can loss support, users get reluctant to pay and farmerswill resume cultivation if they expect users will not pay. Given the political and socialtensions between inhabitants and authorities of the municipalities of Chiquiza and Villa

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de Leyva, it was important that the uncertainty was communicated and introduced as a

fundamental part of the scheme.In terms of sensitivity the PES scheme can reduce vulnerability if it promotes

diversification in economic activities and income sources. If people are paid theiropportunity cost to not cultivate, then annual income is roughly unchanged but comesfrom two different and unrelated sources. In this sense, PES payments to farmers caninsure against agricultural price fluctuations; although conversely farmers could becomedependent on external income sources. This is particularly important for upstreaminhabitants of the Campohermoso watershed because they have strong cultural ties to theland and the potato crop.

One way to reduce sensitivity without changing the economic activity is via in-kindpayments (such as technical assistance to improve cultivation techniques and theintroduction of less demanding water potato varieties) rather than cash.

Adaptive capacity can be improved if the PES scheme is designed to alleviate povertyconcomitantly with enhancing conservation. If poverty is understood in a widerperspective, as individuals capacities and opportunities (such as proposed by AmartyaSen) PES must include farmers not as recipients of payments made by users but asstakeholders. In order to be effective in reducing vulnerability the scheme must becomplemented with strategies oriented towards increasing skill and education levels. It isclear that one instrument is insufficient to deal with all the obstacles and needs.

Finally, PES can help build social capital. This argument rests on the assumption thatcommunity members are part of the process, from the identification of the problem to theimplementation of the strategy. But if the PES scheme is the result of a top-downapproach, like in Campohermoso, then is not clear why there would be more socialcapital just because the scheme requires an organisation to collect and make payments,along with monitoring and enforcement mechanisms. If those organisations are seen as animposition by the government and other organisations, then there is no reason to expectthe community to be able to design their own rules to cope with collective choiceproblems and other conflicts.

In conclusion, the non-inclusive, top-down approach of the PES in Campohermoso isnot likely to reduce vulnerability. Rather, strategies involving farmers and their familiesdirectly will be more successful. In Colorada, by contrast, the PES scheme is the result ofa bottom-up approach made possible thanks to the existing social capital.

5 Lessons learned

Even if PES schemes are designed to tackle a specific environmental conflict it impacts

the vulnerability and capacity of communities to cope with other stressors, like climatechange or market dynamics. PES schemes, for example, are widely promoted bygovernment officials and donors for their potential as poverty alleviation instruments(Wunder, 2005; Suyanto et al., 2007). Taking as a reference point the Campohermosoand Colorada watersheds, Figure 3 indicates how responses produce changes in thesubsystems which in turn trigger new human actions. The slow variables stronglyinfluence socio-ecological systems but remain relatively constant over decades, while thefast variables respond sensitively to daily, seasonal, and inter-annual variation inexogenous or endogenous conditions [Chapin et al., (2010), p.346].

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Figure 3 Campohermoso and La Colorada watersheds as a SES and the institutional response:

PES (see online version for colours)

Climatechange

Nationaland regional

governancesystems,

regional economy

Waterquantity

Functionaltypes

Soiltypes, moisture

Disturbanceregime

Ecosystemstructure

Slow

variables

Waterquality

Biodiversity

Forestcover

Soilnitrate

Other

Fast

variables

Wealth

Aqueducts

Cultural ties to the landand economic activities

Community governanceinstitutions

Land tenureregimes

Slow

variables

Income

Demographics

Accesto resources: water

Agriculturalmarket dynamics

Landvalue

Fast

variables

Human

actors

Institutional

Response:

PES

ES and environmental impacts Social impacts

SES

Source: The authors, based on Chapin et al. (2010)

In the Campohermoso watershed the most critical slow variables are the cultural ties tothe land, economic activities, and the land tenure regimes. Demographic growth coupledwith a fixed area for cropping has caused high level of plot fragmentation, resulting innon-diversified economic activity. Furthermore, it is difficult for those who stay in theregion to improve their income because of the small area of productive units.9

The need to increase cultivable land per person has led peasants to reduce forestcover, drain wetlands, and use more fertilisers. While the first of these actions negativelyaffects the soil moisture and its water absorption capacity; the latter increases in the shortrun groundwater contamination. But, because most upstream farmers obtain water fordomestic consumption from other sources there is no local negative feedback to stabilisethe system.

The bottom-up solution is the key to success. The PES scheme was successful inColorada because it was demanded by the community itself; in Campohermoso theparticipatory education with teenagers and elders through pilot projects was alsosuccessful. These activities foster resilience to external shocks like climate change aspeople obtain ownership and leadership of their territory, while learning to manage theirnatural resources and understand the importance of changing some practices that willaffect their water sources in the near future.

A key lesson is that in real terms environmental services sellers, i.e., the upstreamlandowners, are not better off with the proposed monetary compensation. It is crucial tounderstand how their welfare is determined by aspects such as cultural ties to the land

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and economic activities as a source of happiness. Yet, viewed from a holistic perspective,

the PES does not solve an increasing problem-water scarcity, even after making neededland use changes for downstream users.

One solution to overcoming the PES drawbacks and making the most of this schemeas an instrument to area climate adaptation is to offer in-kind payments such as technicalassistance to improve cultivation techniques and the introduction of less demanding waterpotato varieties, as well as enhancing individual capacity and opportunities. A PES willsucceed if complemented with increasing skills and education levels of the population,along with designing an aqueduct that manages the water flows of the whole area.

Acknowledgements

This work was funded by the School of Economics of the Sergio Arboleda University andsupported by the Swedish Meteorological and Hydrological Institute, and the SwedishInternational Development Agency within the International Training Programme:Climate Change Mitigation and Adaptation. We would like to thank the governmentofficials from the Iguaque National Natural Park, villagers and all respondents at thestudy case area Boyac, Colombia. The authors also thank the editor and twoanonymous referees for helpful comments.

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Notes

1 In Colombia, the Nio (hot phase) and Nia (cold phase) visibly influences the inter-annualclimate variability, causing above/below rainfall and temperature depending on the phase. InBoyac, like most of the Andean zone and the Caribbean, during the warm phase (El Nio),rainfall is reduced between 20% and 40%, reaching severe levels above 40%. No matter ifnatural or anthropogenic, how to tackle the consequences of the variation of climate is ofparamount importance.

2 The pioneer case is Costa Rica with its country-wide programme Pago por ServiciosAmbientales implemented in 1997 to reverse high deforestation rates (Pagiola, 2008).

3 The national pilot project for adaptation to climate change (INAP) is the main programme foradaptation in high mountain ecosystems promoting the development of key adaptationmeasures [IDEAM, (2010a), p.348].

4 For some exceptions see Willetts (2008), and Asian Development Bank and InternationalFood Policy Research Institute (2009).

5 See Chapin et al. (2010), Ostrom (2009), Walker et al. (2002), and Resilience Alliance (2010).6 Based on field work interviews and complemented with: (ESVILLA et al., 2010), and

(COPOBOYAC et al., 2006).

7 Chaina PES Initiative, for details see Blanco (2006).

8 Chaina PES initiative (Blanco, 2006).

9 Average plot size is 6 ha, but more than 70% of plots are less than 5 ha in area (Borda, 2010).

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