Diving into Water Markets

The use of markets and market-based mechanisms to conserve and pay for ecosystem services is a
growing global trend that has gained a solid foothold through both the regulated and voluntary
carbon markets and is rapidly gaining traction in the water markets. Furthermore, it is a trend that is no longer solely important to environmentalists but has become of essential interest to small local communities, government regulators, businesses, and financiers all over the world.

Payments for Watershed Services (PWS) encompass innovative private deals, trading schemes, and
government programs that have been structured around the concept that watersheds provide
valuable services, such as the natural filtration through wetlands, which, if marketed correctly, these services might help watershed conservation pay for itself and generate income for those willing to participate.

The foundational articles that the Ecosystem Marketplace has compiled in Diving Into Water Markets are complemented by a view into payment schemes in the New York
City and Chesapeake Bay watersheds. In this volume, ee also turn a critical eye toward Africa for a look at how best to adapt successful PWS (Payments for Watershed Services) schemes to fit in the developing country context.

In compiling these articles and examining the work of others noted in Part IV, we hope to demonstrate cases where market-based mechanisms can play a critical role in the protection, restoration and sustainable management of the world's most essential commodity— water — for which there is no substitute.