In Asia, China’s leadership continues to embrace eco-compensation programs to mitigate environmental damages and build local capacity for natural resource management. Chinese government spending ($8.8B) accounted for 92% of global watershed investment reported in 2013; the country has spent an estimated $40B in the space since 1999. Recent years also saw Vietnam’s new national Payment for Forest Environmental Services program accelerate. In 2013, water users such as hydropower operators and utilities collectively paid $54 million to Vietnamese forest-based communities for watershed services.
At a Glance: Watershed Investment in Asia
|Programs in development||34||7|
|Total land area managed for watershed services (hectares)||110.7M||339.6M|
- China continues to lead Asia and the world in watershed investment. Total transaction values in Asia exceeded $11.5B in 2013, with more than $11.48B (>99%) invested in China.
- The rest of Asia collectively saw $52M in investment, led by Vietnam, where the national Payment for Forest Environmental Services (PFES) program has scaled up rapidly since 2011.
- In 2013, nearly 340M hectares in Asia was under management for watershed services. Programs tended to focus on paying for sustainable management on productive landscapes and on forest projects: 67% of programs funded tree-planting, sustainable forest management, or forest protection efforts.
- Outside of China, where public subsidies dominated spending, programs were far more reliant on local buyers and the private sector. With $50M spent in 2013, hydropower producers were the largest buyer by transaction values, largely through Vietnam’s PFES program. Public drinking water utilities ($1M) and local government ($1M) were a distant second and third in terms of spending, although as a group, local water service providers were a buyer in more than a quarter of programs.
- Excluding Chinese activity and Vietnam’s new national PFES program, other Asian programs show signs of slowdown. In this group, transaction values have fallen every year since 2009.
Forest Trends’ Ecosystem Marketplace’s Watershed Connect Program Inventory: http://www.watershedconnect.org/programs
Forest Trends’ Ecosystem Marketplace’s State of Watershed Investment 2014 report, Chapter 6: http://www.forest-trends.org/documents/files/SOWI2014.pdf