Network Activation around Pimampiro’s PES Program

Pimampiro’s payment for ecosystem services program grew out of DFC’s efforts to create a community forest management plan that would protect the watershed providing Pimampiro’s water. Like many of the small Andean farming communities where DFC worked, Pimampiro suffered from high poverty rates and severe water shortages, exacerbated by deforestation in the watershed to expand agriculture.[1] Beginning in 1994, DFC technicians worked with the local farmers’ association to develop a forest management plan for farmers’ land, located in the catchment area of the watershed feeding Pimampiro. Given farmers’ desire to increase production, the plan combined forest and soil conservation with agroforestry projects (e.g., fruit trees, commercial orchid cultivation, and medicinal plant collection), as well as environmental education (CEDERENA 2002). DFC also helped create a new Environment and Tourism Unit within the municipal government. The unit constituted a new local governing node in the transnational IWM network. It was staffed by experts trained through DFC and charged with designing and implementing the municipality’s environmental strategy.

While DFC’s program ended in 1997, Ecuadorian experts trained through DFC founded the local NGO CEDERENA (the Ecological Corporation for the Development of Renewable Natural Resources) to continue DFC’s work in Pimampiro (illustrating the power of network activation). By 1999, CEDERENA’s technicians had become quite concerned. Various tactics to convince local farmers to stop cutting down trees had failed, and deforestation in the watershed continued. Studies showed this contributed to reduced water flow, and water access was down to two hours per day. Moreover, studies showed the watershed was the only viable water supply.

Desperate to find something that would work, CEDERENA proposed creating a payment for ecosystem services fund. After reading about Costa Rica’s recently established national-level payment for ecosystem services system, CEDERENA developed the idea of adapting it to be a voluntary local program. CEDERENA sold the idea to experts in the municipal Environment and Tourism Unit, and worked with them to design the program and sell it to landowners and politicians. Pimampiro’s municipal government launched the program in 2000, with support from FAO, the Inter-American Foundation, and CEDERENA.[2]

The program’s logic is that beneficiaries of ecosystem services (in this case, water users) voluntarily “buy” these services (i.e., the flow of clean water) from “providers” who enact land-use practices designed to ensure that the services continue. The municipal government acts as the “buyer” of watershed services on behalf of the city’s water users. The municipal Environment and Tourism Unit manages the program. It negotiates voluntary agreements with farmers to conserve and sustainably manage the forest on their land in exchange for cash payments. To finance the payments to farmers (the ecosystem service “providers”), the government passed an ordinance levying a 20% fee on drinking water (The Inter-American Foundation and CEDERENA also made initial donations for start-up costs). This money is held in a municipal government account in the National Development Bank. Decisions on how to use these funds are made by Pimampiro’s Mayor and the directors of the municipality’s Financial Unit, Environment and Tourism Unit, and Environmental Commission.

During the early 2000s, Pimampiro became known nationally as a pioneering case of decentralized payment for ecosystem services. Its perceived success raised CEDERENA’s stature as a leading authority on watershed management. By 2003 CEDERENA was devoting its energy and resources to replicating the Pimampiro model in other municipalities. Drawing on the FAO-DFC network, CEDERENA organized coalitions of local, national, and international organizations to implement payment for watershed services programs in various Ecuadorian municipalities, including Celica and El Chaco (see Fig. 4.1).

  • [1] Pimampiro is a municipality in Ecuador’s Imbabura province, one of nine provinces inEcuador’s highlands where DFC operated. The institutions working on the DFC program inImbabura included the municipality of Pimampiro, CEDERENA (an Ecuadorian NGO created byEcuadorian DFC technicians to facilitate community management of natural resources, local development, environmental services, and institutional development), and the Red MACRENA (anEcuadorian NGO created by ex-DFC technicians for training in natural resources management);these organizations received funding from the Inter-American Foundation, FAO, and the Dutch government (Echavarria et al. 2004).
  • [2] For details of Pimampiro’s program, see Echavarria (2004); Kauffman (2014). For definitionsand descriptions of payment for ecosystem services, see Goldman-Benner et al. (2012); Wunder(2005).
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