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Creating Markets For Watershed Services In Nyungwe National Park, SW Of Rwanda


Nyungwe National Park is globally recognized for its conservation value as the largest protected mountain forest block remaining in east and central Africa. It is also a major catchment for the nation of Rwanda, providing most of its water for drinking, manufacturing), and hydro-electricity generation. WCS has been working with the Government of Rwanda to:

  • model the likely impact of illegal forest clearing and burning, and climate change on water quality and quantity flowing from Nyungwe National Park
  • raise awareness within Government and the Private Sector of the importance of the forest for present and future water security in Rwanda, and
  • encourage private sector (drinking water filtration, tea processing, drink manufacturing, and hydro-electric power) interest in working with the National Parks Agency within the Rwanda Development Board to support the conservation of Nyungwe National Park and secure predictable flows of low-sediment load water.

NNP partners, including USAID, Wildlife Conservation Society (WCS) and the Rwanda Development Board (RDB), are exploring the application of sustainable financing mechanisms like payment for ecosystem services (PES) as a means to protect and enhance the services and values provided by NNP while securing benefits to the adjacent communities.

Problem, challenge or context: 

Landlessness, decreasing agriculture productivity as a result of intensive cultivation, and lack of alternative economic opportunities for park’s neighbouring communities are significantly affecting the management of NNP. In addition to the park’s insufficient budget to meet the needs identi¬fied in its management plan illegal activities such as mining, poaching, encroachment for agriculture land are affecting the integrity of the park and its ecosystem services. Over the last two decades Rwanda has taken important strides to improve the management of its protected areas, and to utilize tourism as a way to generate the revenues to finance them and support community development projects. However, given the uncertainties of the global tourism industry—driven by factors such as the state of the global economy, the price of air transport due to fluctuations in oil prices, and the perceived state of international security—revenues from tourism seem to be unpredictable. Therefore there is an urgent need to diversify sources of revenues to address this uncertainty. The development of payments for watershed services in Nyungwe aims at addressing some of the challenges facing conservation in Rwanda including secure sustainable financing for parks management and support local livelihoods.

Specific elements of components: 
In designing a payment for watershed services scheme we are envisioning five key important steps including the biophysical and economic assessments, establishing a legal and policy framework, raise the awareness for the need of sustainable financing and PES, developing a business plan and PES implementation through negotiations and agreements between providers and users. These steps are generally chronological and take time, though many stages will run in parallel and may change organically as data and resources become available and lessons are learned. 
Step 1 . Biophysical and Economic Assessments
Biophysical assessments
This step aims at identifying baseline conditions, threats, trends, priority areas and associated interventions. It is difficult to expect beneficiaries to invest in a solution if they are not fully aware of the problem. It has been revealed that there is a lack of understanding of:
  1. True baselines of current anthropogenic impact to NNP
  2. Existing threats and implications to the ecosystem services provided by the park if those threats increased, and
  3. Potential interventions to address those threats.

As a first step WCS in partnership with the US Forest Service carried out a study to assess the impacts of land use practices and climate change on water quality and quantity. The potential impacts were evaluated through four scenarios: a baseline, deforestation, one degree Celsius temperature increase, and the combination of a one degree Celsius temperature increase and ten percent reduction in precipitation. The conclusions from the scenario runs suggested that due to global climate warming, specifically increases in temperature and reductions in precipitation would cause decreases in stream flow, conversion of forest to cropland would have minimal impact on stream flows, deforestation would greatly increase erosion and sedimentation, and that Nyungwe has relatively high water yield, 30%-40% of its annual precipitation, and due to steep slopes and high rainfall, deforestation within Nyungwe would cause serious sedimentation problems. 

Cost-benefits analysis of land use change for each industry/beneficiary
NNP’s services are highly valued across economic sectors - 80% of stakeholders surveyed, including all agribusiness representatives, stated that their business' success relies on at least one of the major watershed services and perceive an important role of the Park in provisioning such services. A cost/benefit analysis would help create the connection between increased threats and associated degradations to the business operations of NNP beneficiaries. Unless a beneficiary can see the direct risk to their business model, it may be unreasonable to expect them to contribute towards interventions. This analysis would help articulate the economic tradeoffs associated with the land use scenarios highlighted in the modeling exercises, and should strengthen the business case for willingness to pay into a sustainable financing effort. A clear understanding of the major threats to NNP and the associated ecosystem service impacts, both ecologically and economically, under different land use scenarios, will enable stakeholders to design a suite of corresponding interventions.
Step 2. Legal and Policy Framework
Currently, specific PES related policies and legislations are nonexistent in Rwanda. On top of that, even the various current policies related to the natural resources management are sectoral-based and in some cases contradictory. The merit of developing a PES policy in its own right is to bring clarity of provisions from very many laws, regulations, orders, and practices into a single platform of reference necessary in attracting and guiding investments into PES schemes. The review of Rwanda legal and policy framework demonstrated that given the fact that the majority of Rwandans are smallholders any PES schemes would have to be very competitive when compared to what households derive from agriculture, some of which could be unsustainable in the short run. Accordingly, any practical and long term rewarding PES schemes in Rwanda would have to demonstrate high potential for poverty reduction, agricultural productivity and resilience and food security, and above all, capacity to reduce loss of Rwanda’s critical natural asset- its top soil.
Step  3. Awareness and Outreach for sustainable financing and PES
WCS and Rwanda Development Board have spent considerable time raising the awareness of the need for a sustainable financing mechanism for NNP. Outreach activities are generally focused on three major groups of constituents: private sector, governments and communities. These activities include informal communications with the private sector, physical mapping of the beneficiaries to understand how businesses' location in the landscape relates to their use and perception of ecosystem services and to their potential motivations to make investments. 
Step 4. Development of NNP Business Plan
A sustainable finance plan is a plan that will ensure that the full costs of a protected area system are met, both now and into the future. A sound financial plan should ensure that the growth of income matches or exceeds the growth of expected costs of managing NNP. Putting together a plan will require:
  • Identification of current and projected costs of managing NNP;
  • Identification and quantification of current revenues and gaps; and
  • Development of revenue generation scenarios 
WCS and its partners are in the early stages of discussing the need and work plan associated with a business plan focused on sustainable financing for NNP.
Step 5. Sustainable Financing Mechanism/PES Implementation
The first four steps will help build the foundation for a sustainable financing mechanism. Biophysically, these efforts will identify baseline conditions, threats, trends, priority areas and associated interventions. Economic analysis will highlight potential lost value and business risk under a variety of land-use change scenarios. And infrastructure-related steps will focus on engaging the necessary stakeholders and setting up the appropriate policies through new and existing institutional arrangements. 
Key lessons learned: 
  1. Data availability: Rwanda has limited capacity and equipment for water quality/quantity monitoring, the results hydrology modelling were generated from a very constrained dataset. Future analyses could be significantly strengthened if more regular, high quality monitoring data on water quality and quantity were available. Monitoring equipment and human technical capacity are both needed for collecting and analyzing data on present water conditions and for making predictions of future changes. To make a good business case for a potential lost value and business risk under a variety of land-use change scenarios good quality data is needed.
  2. Stakeholder Engagement: Ecosystem services cut across all the economic sectors. In order to ensure the smooth implementation of the PES system, stakeholder groups should be engaged throughout the entire formulation, implementation, and verification processes to ensure each has a compatible vision of success. The Rwanda Environmental Management Authority (REMA) with the support of WCS has created a national task force to advise, guide and provide technical leadership in the development of a national framework for developing and implementing PES. Through the PES task force government agencies meet on quarterly basis to discuss issues pertaining to PES development in Rwanda.
Contact details: 
Dr. Michel Masozera, Wildlife Conservation Society, Rwanda Program
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