13.3.4.3 Conclusion regarding watershed management

In conclusion of this section 13.3.4, it has to be noted that despite successful examples of watershed protection business, the potential to finance nature conservation through payments for water services has not yet been fully developed. Finding a willing buyer for watershed protection services is a challenge and hence appears to be the main barrier to introducing watershed protection schemes and to maintain them in the long run. However, as water becomes scarcer and more valuable as a resource, it is assumed that watershed management in the future will have more income-generating potential, including opportunities for long-term investments.1 Furthermore, it is clear that any water-related scheme needs a certain degree of government involvement and support due to the complex legal and social situation in which these schemes have to operate. Since many projects still suffer from a lack of complete information regarding the impact of land use on hydrological services, further research in this field is required. Overall, if a well-balanced scheme can be established, the benefits will be three-fold: (i) financial returns where watershed protection is an optimal and cost-effective option; (ii) conservation of biodiversity, but the significance thereof will depend on the types of land use that are supported by the payments and their impacts on water supply; and (iii) as an extra 'selling point', watershed PES schemes can deliver social benefits, such as a contribution to poverty reduction by compensating farmers.