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Benefit Sharing Mechanisms


Research has an important role to play in planning and negotiating benefit sharing mechanisms





CPWF projects observed many inequities in water access among users and uses. (“Water uses” include direct consumption; industrial and urban use; use in hydropower and mining; agricultural uses in irrigated and rainfed systems including crops, livestock, and fisheries; and use in the production of ecosystem services). We found, however, that a redistribution of water as such was not always needed to improve equity. Sometimes a more equitable distribution of water-related benefits was sufficient.

Although the powerful were found to be generally more adept at gaining and maintaining access to water, access also depended on the position of a user in the landscape. Upstream users were frequently able to impose “externalities” on downstream users. In this context, externalities are costs or benefits that affect downstream users as a result of upstream water and land management practices. Externalities may be positive (provision of ecosystem services such as biodiversity conservation or improved water flow) or negative (siltation, pollution or interrupted water supply).

Some downstream water uses generate very substantial economic benefits – for example, through hydropower, commercial irrigated agriculture, fisheries or recreation. To do so, however users may require a reliable supply of good quality water throughout the year. In these cases, it is in their own interest to share some portion of the benefits they earn with upstream communities for the purpose of improving upland community livelihoods in ways that also improve downstream water availability.

Benefit sharing mechanisms (BSM), then, are institutional arrangements (for example, trust funds) for negotiating investment by downstream water users in improved upstream water and land management, with the agreement of and for the benefit of all concerned. In this form, BSM work best when upstream areas are relatively rich in water while downstream areas are relatively rich in economic and financial resources – and when there are no intractable transboundary issues. These conditions provide an environment for negotiating BSM based on mutual advantage and common agreement among stakeholders.

Research has an important role to play in planning and negotiating BSM. Modeling can link upstream land degradation and land management with downstream water quality in order to justify investment in BSM. Moreover, research can estimate the value of water in different uses, and by this means come up with shadow prices for water that can inform BSM negotiations among the several parties. Sometimes BSM do not use financial transfers but rather agreements on changes in access to resources.


BSM were of interest to many basin teams but received special attention in the Andes. The Andes team found many opportunities for fostering the introduction of BSM.

In Fuquene, Colombia, a lake was being silted up and its water was undergoing eutrophication because of sediment flow from agricultural areas around the lake. This affected lakeside communities that depended on its water for their livelihoods. Through one CPWF project, a BSM was introduced to provide financial incentives for hillside farmers to adopt conservation practices.

In another example in Ecuador, open grazing of cattle in fragile highland wetlands resulted in land degradation, reduced dry season stream flow and increased sediment flow. Through a CPWF project, a BSM succeeded in brokering an agreement with relevant highland communities to cease open grazing of wetlands in exchange for investment in community facilities for intensive dairy production.

Finally, because of successful progress in developing BSMs for Cañete in Peru, the Andes basin team was invited to serve as technical advisor to a national program within the Ministry of Environment to help develop BSM for more than 30 additional river basins in that country.

Browse the tabs on the left to learn more.


Summary of CPWF Research in the Andean System of River Basins (Brief)

CPWF regards benefit-sharing mechanisms as tools through which the benefits and risks associated with natural resource management, or development, can be more equitably shared. Seizing the opportunity for change, CPWF set out to find ways to increase water productivity and reduce water-related conflicts through the establishment of equitable benefit-sharing mechanisms.

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Piloting Benefit-Sharing Mechanisms and Influencing National Policy in Peru (Outcome story)

With help from CPWF, the Ministry of Environment in Peru established a new scheme for rewarding ecosystem services in the Cañete River basin and designated the basin as an official pilot for a national benefit-sharing program, which, if successful, could be scaled up and implemented in an additional fifty-three river basins.

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aying for Environmental Services in an Andean Watershed: Encouraging Outcomes from Conservation Agriculture (Outcome story)

The promotion of a scheme for payment for environmental services in the Lake Fuquene watershed spurred farmers to adopt conservation agriculture, slowing sediment slide and preserving the ecosystem.

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Benefit-Sharing Mechanisms Helping Create a Virtuous Circle Between Welfare of People and Ecosystems in the Andes

This is a blog post on CPWF Andes’ experiences with designing and implementing benefit-sharing mechanisms that seek to redistribute the benefits of a healthy watershed equitably to everyone in the watershed.

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Cross-Basin Convergence on the Role of Benefit-Sharing Mechanisms

A blog posts that questions what actors in the Mekong and Andean regions can learn from each other when it comes to implementing benefit-sharing mechanisms.

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Strengthening Benefit-Sharing Mechanisms in the Andes

This blog post explores how the second phase of CPWF research in the Andean region built on both phase 1 research and CPWF’s basin focal project in the Andes.

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Modelling a More Equitable Water Future in the Andes

This is a blog post on the CPWF Andes project “Mechanisms for benefit sharing to improve productivity and reduce conflicts for water in the Andes” (COMPANDES) which designs mechanisms to better share the benefits of water from an ecosystem services perspective.

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The CompAndes Negotiation Support System

The CompAndes negotiation support system is a test bed for negotiations around benefit-sharing mechanisms for water focusing on sustaining equitable flows of water for all through appropriate land, ecosystem, and water management.

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What is a Benefit Sharing Mechanism?

This flier outlines what a benefit-sharing mechanism is and why such mechanisms are needed in the Andean region.

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What Are Benefit-Sharing Mechanisms? (Video)

An introductory video to Benefit-Sharing Machanisms. Discover how Benefit-Sharing Mechanisms (BSMs) work to redistribute the costs and benefits of a healthy watershed equitably amongst everyone.

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Cuenca Río Cañete, Perú (Video)

Entrevista a Marcela Quintero Especialista en Servicios Ecosistémicos del Centro Internacional de Agricultura Tropical (CIAT) y líder del Proyecto AN2 del Challenge Program Water and Food (CPWF).

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  • Mulligan, M., J. Rubiano, G. Hyman, D. White, J. Garcia, M. Saravia, J.G. Leon, J.J. Selvaraj, T. Guttierez, and L.L. Saenz-Cruz. 2010.
  • Quintero, M, F Leon, J Tapasco, and Y Puemape. 2011. An ecosystem services oriented benefits sharing mechanism (BSM) in the Andes: The Canete watershed case study. In Proceedings of the 3rd CPWF International Forum on Water and Food (IFWF3) 14-17 November 2011,Tshwane, South Africa: CGIAR Challenge Program on Water and Food.
  • Quintero, M., R.D. Estrada, J. Tapasco, N. Uribe, G. Escobar, D. Mantilla, J. Burbano, E. Beland, C. Gavilanes, and A. Moreno. 2012. Compartiendo los beneficios de los servicios ambientales hidrológicos en la cuenca del Río Quijos (Ecuador). In Project report. CIAT / CPWF– GIZ – RIMISP. Cali, Colombia: CIAT and CPWF.
  • Quintero, M., S. Wunder, and RD Estrada. 2009.
  • Rubiano, J., M. Quintero, R.D. Estrada, and A. Moreno. 2006.
  • Saravia, M. 2012. Project Andes 4: Andes Coordination Project. In CPWF Six Monthly Project Reports for April 2012-September 2012: Unpublished.