Investing in Green Solutions

Growing Blue

Global Initiatives Generate Huge Returns and Environmental and Social Benefits

Watersheds supply drinking water, provide recreation and respite, support food, fiber, manufacturing and tourist industries, and sustain life. However, with 80 percent of the world now facing significant threats to water security, investing in natural resources is emerging as the most cost-efficient and effective solution.

A new report from Ecosystem Marketplace presents a snapshot of the scale, size, shape and direction of investments in watershed services worldwide. These services include payments for ecosystem services, payments for watershed services, water quality trading markets, and both reciprocal and in-kind agreements. According to the report, the number of initiatives globally has nearly doubled in just four years with $8.17 billion being spent in 2011 on safeguarding drinking water and regional supplies by protecting watersheds. China leads in watershed investments, accounting for 91 percent of these watershed investments.

Data collected for the report identifies that direct payments to property owners who, in turn, change their land use behavior is the most popular method. These efforts have been credited with successes such as keeping safe drinking water flowing from city taps in New York City throughout the Hurricane Sandy aftermath. New York accomplished this by, more than a decade ago, deciding to compensate farmers upstate who reduced pollution in the lakes and streams. This method not only saved them millions on treatment operations but creating a sustainable cycle of mutually supportive economic and ecological investments. Other examples identified in the report demonstrate how:

  • In South Africa, a US $109-million investment in rooting out water-hogging invasive plants—a single eucalyptus tree can guzzle 40,000 gallons of water a year—currently employs 30,000 previously unemployed people and has returned an estimated US $50 billion worth of water-related benefits, such as vastly improved stream flow.
  • In Sweden, a local water authority found it cheaper to pay for a program to establish blue mussel beds in Gullmar Fjord to filter nitrate pollution than build a new treatment facility on shore.

Much research has been done on the importance of applying value to the environment and its benefits and accounting for natural capital as critical assets. The growth in management systems for water seen in the last four years despite the global economic downturn shows the importance of moving away from ‘gray’ solutions towards ‘green’ ones. Only through new funding mechanisms, cost-benefit and scenario analysis will the global population be able to continue its dependence on a limited natural asset as is water.

Read More:
Charting New Water: State of Watershed Payments 2012
Ecosystem Marketplace
Forest Trends