Table 1 Watershed PES

From: The global status and trends of Payments for Ecosystem Services

PES mechanism (category) Definition Example Market size 2009 → 2015 Programmes 2005 → 2015 Distribution (number of countries)
Subsidy watershed PES (government-financed) Public finance rewards land managers for enhancing or protecting ecosystem services. The funders do not directly benefit from the management activities. Chinese government’s Sloping Lands Conversion Program pays farmers to stop cultivating on steep slopes. Roughly 53 million farmers receive compensation to improve water quality and flood control. $6.3 billion → $23.7 billion (US$12.98 billion in China) 17 → 139, with 69 in China 39
Collective action watershed PES (user- and government-financed) An institution pools resources from multiple water users (private parties, NGOs, government bodies) to pay upstream landowners for management actions that provide water quality and other benefits. Quito’s Water Conservation Fund relies on a 1% surcharge on monthly water bills and monies from local electrical utility and beer company directed to finance projects protecting forests and grasslands in the watershed. US$402 million → US$564 million 16 → 86 22
Bilateral watershed PES (user- and government-financed) A single water user compensates one or more parties for activities that deliver hydrological benefits to the payer or serves to mitigate impacts from their activities. In the 1990s, New York City raised a bond to pay for land-use changes in the Catskills and Delaware watersheds to ensure the quality of their drinking water at much lower cost than installing a treatment plant. US$13 million → US$93 million 19 → 111 27
Instream buybacks (user- and government-financed) Water rights are purchased or leased from historic rights holders and retired, which leaves the water in-stream to deliver water-quality benefits and ensure healthy ecological flows. In Australia, the Restoring the Balance programme committed over $3 billion over a ten-year period to purchase water entitlements from farmers to ensure instream flows in the Murray–Darling Basin. US$25 million → US$60.7 million 15 → 20, with 18 in the United States 3
Quality trading and offsets (compliance) Water service providers comply with regulations by paying landowners for activities that improve a measure of water quality (such as nutrients, salinity or temperature) in exchange for credits. In the Hunter River Salinity Trading Scheme, salt credits are traded among mines and power stations based on river conditions to control the salinity. US$8.3 million → US$22.2 million 10 → 31, with 29 in the United States 3