A regional project on markets and incentives for watershed protection and improved livelihoods

Location:Caribbean region

Year: 2004 – 2006

Funded by: International Institute for Environment & Development (IIED)

Amount: 480 000 USD

Project purpose: To create capacity in national and local institutions to assess the potential of market-based instruments to enhance watershed protection services and improve livelihoods, and to design and employ such instruments when appropriate.


In January 2004, CANARI launched a two and a half year project to examine and test the use of markets and incentives to improve the quality and delivery of watershed services (such as water production,minimising soil erosion, reducing landslides, flood control and biodiversity protection) for the purpose of improving local livelihoods, especially for the poor. The project builds on national diagnostic studies carried out in 2002 to assess experience in the use of markets and incentives as tools for watershed management and interest in the potential for exploring the concept further.

The project was part of a larger global project entitled, “Developing markets for watershed protection services and improved livelihoods” which was implemented by the IIED with support from the United Kingdom Government’s Department of International Development (DFID).

Project Goal

To optimise the direct and indirect benefits provided by watersheds to upstream communities, downstream users, and the wider society, with particular emphasis on the poor and vulnerable communities.

Project Activities

  • Action-Learning Group: To support the development of shared understandings across the region on watershed approaches that work to improve the livelihoods of poor and vulnerable groups and the environment, by building a community of change agents prepared to adapt and shape new watershed market initiatives as they arise;
  • Action -learning projects: Case studies from Saint Lucia and Jamaica examining the role of valuation in market development;
  • Research on strengthening links between sectors: Studies to examine the extent to which supply and demand side privatisation of the water sector and tourism certification schemes currently provide financial and other types of support for watershed protection and to demonstrate ways in which upstream-downstream linkages can be strengthened through the use of market -based approaches;
  • Case study analysis: Documentation of findings of the Action -Learning Group which expanded its learning by visiting a selected case of the project to study, briefly analyse and draw lessons;
  • Dissemination of learning:The Action -Learning Group identified approaches, tools and methods which are needed to ensure that market mechanisms develop in the right way, and disseminated them through national and regional fora.


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