Multiscale Analysis for Promoting Integrated Watershed Management

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Multiscale Analysis for Promoting Integrated WatershedManagementJorge Rubiano a , Marcela Quintero b , Ruben Dario Estrada b & Alonso Moreno ca International Center for Tropical Agriculture (CIAT) , Cali, Colombiab CIAT—Consortium for the Sustainable Development of the Andean Region (CONDESAN) ,Cali, Colombiac Project “Cuencas Andinas” GTZ/CONDESAN, International Potato Center (CIP) , Lima, PeruPublished online: 22 Jan 2009.

To cite this article: Jorge Rubiano , Marcela Quintero , Ruben Dario Estrada & Alonso Moreno (2006) Multiscale Analysis forPromoting Integrated Watershed Management, Water International, 31:3, 398-411, DOI: 10.1080/02508060608691941

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398

Multiscale Analysis for Promoting Integrated Watershed Management

Jorge Rubiano, International Center for Tropical Agriculture (CIAT), Cali, Colombia, Marcela

Quintero, Ruben Dario Estrada, CIAT - Consortium for the Sustainable Development of the Andean Region (CONDESAN),Cali, Colombia, and Alonso Moreno, Project “Cuencas Andinas” GTZ/CONDESAN,

International Potato Center (CIP), Lima Peru

Abstract: Integrated Watershed Management involves many aspects of the biophysical and socio economic world operating at many different scales. It is a complex process since it involves a wide range of stakeholders that live, and compete for limited resources, at different temporal and spatial scales. In order to gain knowledge about appropriate approaches for integrating natural resources management with rural development strategies, this study details a framework designed to implement research and development activities in the Fúquene watershed of Colombia.

The framework integrates key spatial information, available at different scales for the site, to facilitate envisioning different land-use scenarios and their impacts upon water resources. Subsequently, selected alternative scenarios of the impact on the identifi ed externalities are analyzed using optimization models. Opportunities for, and constraints to, promoting cooperation among users are identifi ed, using economic games in which more sustainable land-use or management alternatives are suggested. Strategic alliances and collective action are implemented to test the feasibility of environmental and economic alternatives. Their implementation is supported by co-funding schemes designed with private and public stakeholders in the study area. Research needs and limitations of the methodology are discussed. The approach described here shows that integration is accomplished only when different scales of decision-making are considered and if activities at plot detail are linked with effects at the watershed scale.

Keywords: Environmental services, watershed management, experimental economics, strategic alliances, optimization.

Introduction

Natural resource management projects worldwide are addressing issues related to the conservation and restoration of ecosystem functions as a mechanism for providing rural and urban communities with suffi cient goods and adequate services (IIED, 2004). Watershed analyses identify the complex network of causal relationships between land use and management, as well as water quality and quantity and sedimentation

downstream. Most environmental confl icts are externality problems, arising from complex relationships such as reduction of water fl ows during the summer, diminishing of water quality and sedimentation of dams, aqueducts and rivers (Costanza and Folke, 1996)

To advance solutions, all stakeholders need to be involved to reduce tensions and facilitate agreements. This paper describes the methodological approach of an environmental project named “Andean Watersheds” (AWP), promoted by the Consortium for

International Water Resources AssociationWater International, Volume 31, Number 3, Pg. 398-411, September 2006

© 2006 International Water Resources Association

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IWRA, Water International,Volume 31, Number 3, September 2006

the Sustainable Development of the Andean Region (CONDESAN), Policy Analyses Subprogram, and the GTZ in the Andean ecoregion. It supports local users and authorities in natural resource management, making available socioeconomic and spatial biophysical information and generating activities that induce collective action to guide rural investment in correcting negative externalities and consequently, reduce environmental conflicts. It also addresses the need for identifying alternatives to solve environmental conflicts in an egalitarian and participative manner (Nielsen and Castro, 2003). The approach described here shows that integration is accomplished only when different scales of decision-making are considered and if activities at plot detail are linked with effects at the watershed scale.

To describe the approach the case of one of several pilot watersheds is presented: The eutrophication of Fúquene Lake, which provides potable water to more than half a million people downstream. Huge amounts of organic matter are being released into the water by at least five different actors. In the agricultural sector there are potato growers on very steep slopes (above 2900 m elevation), cereal crop growers at lower altitudes, and cattle producers on less steep slopes around the lake. The urban sector has two main actors: Those dumping wastewaters into the lake and those located downstream where water is used for consumption.

Fúquene Lake is located in the valleys of Ubaté and Chiquinquirá, north of Bogotá, the capital of Colombia (Fig. 1). Concern for the lake’s conservation began in the latter part of the twentieth century when the environmental authority began working towards a better understanding of the lake’s role in the ecological and socioeconomic processes in the region. The lake has deteriorated extensively due to excessively high levels of phosphates and nitrates and the proliferation of aquatic plants, which have accelerated eutrophication. The surface covered by water has been reduced considerably, making navigation impossible. The downstream municipalities, whose aqueducts depend partially or totally on waters from the Suarez River, which begins at the outlet of the lake, are concerned about the future of their water-supply systems.

In order to reduce water pollution, the project focused first on determining each sector’s responsibility

for the lake’s deterioration. The multiple point and nonpoint sources and sinks of nitrogen and phosphorus were traced to determine which sector contributes the most pollutants to the lake. The opportunity costs of technological changes required to reduce pollutants then must to be quantified to calculate compensation schemes from water consumers to farmers.

A systematic study using secondary data was commissioned by the regional environmental authority CAR (Autonomous Regional Corporation for Cundinamarca Province). Results suggest that cattle producers are responsible for 80% of the pollutants that flow into the lake. Fertilizers from the pastures, manure and urine wastes all have a significant impact on the lake (CTI et al., 2000). Additionally, the industry and population around the lake lack appropriate treatment systems for residual waters, dumping wastes directly into superficial waters. The annual contribution of total loads including point and nonpoint sources is estimated at 48,123 kg/day of total N and 6,156 kg/day of total P (CTI et al., 2000).

The area lacks sound environmental management, both in the upper parts of the catchment where paramo ecosystems have been practically replaced by potato crops and in the valley bottom where cattle ranchers overexploit land and destroy the wetlands. From a socioeconomic standpoint, inequity is characteristic, with the most productive areas in hands of large landholders, while the hillsides are for smallholders. In summary, it is the accumulated effect of individual

Figure 1. Location of Fúquene watershed, Colombia.


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actions at plot scale that are having a regional impact on the quality of water resources.

The integrated water resource management (IWRM) approach

Some of the lands that are generating or suffering negative externalities are owned or managed by poor farmers. The AWP aims to diversify small farmers’ activities and mitigate environmental conflicts. The Project also recognizes that is not feasible for small farmers to assume these external costs without increasing their poverty levels. Consequently, it is impossible for

the poor rural sector to implement changes in their land uses without external intervention. Thus, this initiative is oriented toward transferring funds to promote changes in the use and/or management of lands that are causing those negative externalities. Figure 2 summarises the IWRM process, which considers the following four steps: (i) Location and magnitude of externalities and stakeholders; (ii) valuation of externalities; (iii) identification of strategic alliances; and (iv) negotiation of alternative mechanisms to modify negative externalities. Each of these steps is explained briefly followed by a more in depth discussion of preliminary results and key characteristics of the current approach. Steps in implementing IWRM

Location and magnitude of externalities and stakeholders

First, biophysical data available at a field-resolution scale are subjected to hydrological analyses to determine the existing Hydrological Response Units (HRUs) in the watershed. A HRU is a spatial unit characterized by a specific type of land use, topography, soil and climate, all which interact to produce a certain effect on environmental externalities. Individual HRUs cover an area of single or multiple farms. The level of detail depends on the available data resolution, which in developing countries is usually the equivalent of 1:25000-scale maps. More detailed input data will partition the space into smaller units and increase the number of HRUs. The HRUs are inputs for the quantification of externalities and valuation process, which also requires socioeconomic data, usually available at aggregate levels of municipalities and plot levels as information regarding production systems costs and benefits.

Valuation of externalitiesThe valuation of externalities is conducted

using a multicriteria model to simulate the variables corresponding to the behavior of the agroecosystems causing the externalities. In most cases, natural resources do not have a market price, however, the level of investments and/or economic compensations determined in a co-investment scheme are related to the shadow prices of externalities and are estimated with

J. Rubiano, M. Quintero, R. D. Estrada, and A. Moreno

Figure 2. Flow chart showing methodology followed by the Andes Watershed Project.

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the model.

Identification of strategic alliancesThe information resulting from the previous step

is used to design decision-making games through experimental economic techniques to determine stakeholders’ willingness to collaborate and negotiate. Thus, it is possible to observe, in a more controlled environment, how incentives and institutions govern the individual decisions affecting outcomes at individual and group levels (Cardenas, 2000). In the Fúquene watershed the decision-making game was played by individuals from local communities in the upper and lower parts of the watershed who have the choice to change their current land-use scenarios or/and make a payment to provide an incentive for these land-use changes.

Negotiation of alternative mechanisms to modify negative externalities

Finally, co-funding schemes among networks of stakeholder participants are established based on sound alternative activities, identified by the multicriteria analysis to guide the use of resources in the watersheds. Additional products include a collective action process to implement solutions.

Key characteristics of the AWP approach

Using data efficientlyAs an external actor in the development

process, AWP’s role is to process raw data to provide reliable information on environmental and economic relationships as a basis for negotiation among stakeholders (Nielsen and Castro, 2003). In Latin America these basic data often have copyright restrictions. Although taxpayers have been the source of funding for public-sector environmental organizations, users face prohibitive costs to access climate or soils data, increasing the transaction cost in the process of identifying optimal solutions (Van Noordwiijk et al., 1998). The Project is making an effort to acquire and produce the data for the local organizations that lack the resources to purchase them. It is common, also, to find that decisions made at a certain scale are obstacles to processes at lower or higher scales. Such is the case

with water-quality data, the current conditions are known by locals but unknown to the authorities and regulatory agencies. On the contrary, for example, is the pre-existence of enforcement rules unknown by the locals.

Biophysical information about daily rainfall, topography, current land cover and soil type is key for this analysis, as well as socioeconomic information about production systems including management activities per crop, fertilizers, labor, pesticide uses, costs, scheduling, yields and employment. These variables are necessary for watershed analyses, identification of causal relationships and potential changes in land-use patterns capable of modifying the hydrological balance and, at the same time, determining the magnitude of externalities. Given the prohibitive cost of this data, national agencies in charge of climate and soils data need to be involved in the process to distribute the benefits and costs of the overall initiative. Participatory activities and collective action are required to warrant the incorporation of this type of partner in the process. Recent advances in deriving topographic maps from the National Aeronautics and Space Administration (NASA) radar missions are providing free access to reliable topographic maps, previously impossible to obtain from local sources. This facilitates the implementation of the approach in areas where topographic maps were not previously available.

In order to determine the value of the externalities identified spatial analysis is done to provide information concerning: water yield flowing into multiple-use reservoirs; peak flow of water and the implications for floods in lowland areas; dry-season base flow for uses that draw water directly from streams; quality of water in lowland areas; and sedimentation of lowlands, reservoirs and lakes. These are key issues motivating catchment management (Van Noordwiijk et al., 1998).Van Noordwiijk et al., 1998).). Climatic information must be managed considering two time scales-daily and annual. Existing daily data is collected to quantify the impact of events on these characteristics as peak runoffs. This daily data is then organized in to annual sets (for about 10 years) to facilitate long-term simulations, crucial in detecting medium- and long-term changes in environmental externalities.


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Systems approach and modeling of causal relationships

The AWP conducted a watershed analysis (Process 1, Fig. 2) to identify relationships between land uses and water quantity, quality and sedimentation using the Soil and Water Assessment Tool (SWAT). SWAT integrates current or desirable land uses with other features such as topography, soils and climate data (Neitsch et al., 1999). The combined factors produce HRUs, for each of which the maximum runoff, lateral flow, percolation to the confined aquifers, soil water retention, actual and real evapotranspiration, discharge and erosion are calculated. The results of the hydrological model are validated against actual measurements of river discharge and parameters such as infiltration, peak runoff and sediments, measured with the aid of a rainfall simulator in the field (Meyer, 1994; Neitsch et al., 1999; Torres, 2001). Other monitoring schemes for water quality are ongoing.

In the context of the biophysical and socioeconomic heterogeneity of Andean watersheds, the spatial information helps identify the HRUs and prioritize them according to their environmental offer (i.e. reduction of sediments, increase of water flows, etc.). Not all HRUs have the same importance when determining their role in providing environmental service. In this pilot watershed their role in the production of nitrates and phosphorous is a priority given their contribution of sediments to the lake. Criteria for selecting the relevant HRUs are also dependent on the scale of the externalities to be assessed. At this point international water-quality standards are an alternative source of information when local limits are not clearly defined. Their relevance against local conditions is a question that obviously requires further study.

As mentioned above, hydrological simulations are conducted for 10 years in order to capture infrequent events or those with an accumulated effect, such as soil erosion and the deposition of that soil in major rivers or lakes. In Fúquene Lake, the impact of land use and management is related to availability of water, sedimentation and concentration of nitrates and phosphates. Figure 3 shows the HRUs contributing the most leached nitrates in Fúquene Lake.

The SWAT model simulates amounts of NO3-

N contained in runoff, lateral flow and percolation as products of the volume of water and the average concentration of nitrates in soil layers (McElroy et al., 1976). A loading function is used to calculate the transport of organic N (Williams and Hann, 1978) and modified for applying to individual runoff events. The loading function estimates the daily organic N runoff loss based on the concentration of organic N in the topsoil layer, sediment yield and the enrichment ratio (the concentration of organic N in the sediment divided by that in the soil). The AWP is also using alternative methods for identifying the contributing pollutants, including other hydrological models and GIS protocols.

Data on water quality, fertilizer use, and quantity for each cropping system are included in the simulation. Tracing the contribution of N and P by each cropping system to the water system is currently done using dN15 and dO18 isotopes. Stable isotopes can determine the contribution of old and new water to a stream and other components of the catchment during periods of variable runoff, integrating temporal and spatial variability (Kendall and Caldwell, 1998). Preliminary results show that farming areas and towns are contributing more nitrates and phosphates than previously estimated. To confirm this data new sampling campaigns are in place. Figure 4 shows the results of the first campaign for stable isotope analysis. Nonorganic waste sources, located in different parts of the catchment, are also contributing nitrates and phosphates to the lake.

Those HRUs capable of producing significant


Figure 3. Soil and Water Assessment Tool simulation of concentra-tion of nitrates in the area of Fúquene.

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VARIABLES

DECISION ALTERNATIVES SCENARIOS

Rotat-ions of crops(ha/yr)withwith-outmini-mumtillage&greenmanu-res

Perm-anentfores-ts(ha)

Perm-anentpast-ureswith/with-outgreenman-ures

Feedconc-entra-tes for cattleprod-uction

No.cows

Farminco-mes(salesofmeat,milk,wood,harvest) (t/yr-sem.)

Envir-onme-ntalincom-es for envir-onme-ntalservi-cesprovi-ded:water(m3/yr)andCO2(t/yr)

NandPpollu-tionresi-dualwater(t/yrorsem.)

Buys& sellslaboraccording to jobprofile

Bankloans

Net incomes (n yr) (objective function) X X X X X X X X X

Capital X X X X X X

Cash flows (by sem. or yr) X X X X X X X X

Land availability (upper, medium and downstream watershed) (ha) X X X

Erosion thresholds by land use (t/sem.) X X X

Hydrological balance, contribution tothe superficial aquifer (m3/ha/sem.) X X X X X

N contributed to water flows by land uses (t/ha/sem.) X X X X X X

CO2 fixation by vegetative cover (t/ha/sem.) X X X

Labor profiles by land uses (no. workdays/sem.) X X X X

Wood production by planted forests (t/ha) X

Wood production by native forests (t/ha) X

Energy production for livestock (megacal./K/ha) X X X X

Protein production for livestock (kg dry matter/ha) X X X X

Dairy production (t/sem./individual) X

Meat production (t/sem./individual) X X

Table 1.Principal variables and decision alternatives in the optimization model of the Fúquene case


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changes in the eutrophication of the lake are considered for modeling new land-use and management scenarios. In this ex-ante analysis the location of HRUs helps identify those stakeholders required in the negotiation and conflict-resolution process.

The impact of implementing land-use and management alternatives can be determined through the dynamic simulation of different scenarios. For Fúquene Lake, new scenarios will include the use of minimum tillage, direct drilling and green manures in addition to changes in land cover, such as reforestation with native species. The marginal change is calculated under the runoff peaks, lateral flow and water percolation, water contribution to the aquifers, soil water retention, real and potential evapotranspiration, discharge regulation, and erosion. These analyses help determine where land-use changes will have an important effect on reducing the negative externalities.

Identifying optimal options for watershed management

Farmers’ activities affect biophysical processes and water-resource availability at different temporal and spatial scales. Their effects can be either beneficial or detrimental at local or downstream locations (CGIAR, 2002). Where, how, and to what magnitude water and

land management changes can be implemented depend on local biophysical conditions and social organization that clearly determines what investments in labor, capital and land will have an impact locally, and downstream, (Reijntjes et al., 1992) today, and in the long term.

Identifying the appropriate scale for observing key ecosystem processes and interactions, especially those with a potentially positive impact, requires a thorough understanding of the local context and how decisions are made. Only then can new scenarios be created with modifications for current conditions, based on local perceptions of what is feasible, and combined with systematic ex-ante analyses of economic, social and environmental impacts.

A multicriteria optimization model (Process 2, Fig. 2) was designed for the ex-ante analysis; it identifies optimal values of the decision variables to maximize or minimize watershed management objectives without violating imposed constraints. Linear programming has been applied successfully to measure the tradeoffs between the economic performance of different activities and the environmental externalities. The AWP uses these models to support stakeholders in making decisions about multiple land-use options. This approach is complemented with social considerations. It is expected that the understanding of environmental problems and the potential collective action to solve them will facilitate agreements among multiple stakeholders.

It is difficult to find alternatives with complementarities related to the generation of jobs, profitability, environmental conservation and social equity all at the same time (Landell-Mills and Porras, 2002). The constraints or variables used in the optimization model correspond to the restrictions given by the biological and economic capacities of the system, farmers’ considerations, and/or local and regional policies. The decision alternatives refer to the activities (individual or collective) that can exist at the HRU or watershed level while respecting the constraints (Table 1). The biophysical constraints included for the case study are the quantity of water, sediments and N and P in the water flows that are affected by land use. The socioeconomic constraints are availability of labor, productive land, levels of income and wealth.

Using optimization models, socioeconomic and


Predominant Isotopic SignatureFertilizersSedimentsOrganic Residues

Water BodiesWater courses

N

Fuquene Lake

Predominant Isotopic SignatureFertilizersSedimentsOrganic Residues

Water BodiesWater courses

N

Figure 4. Preliminary result showing the predominant stable isotope

signature for sub-catchments sampled in the study area.

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environmental constraints are then considered to identify feasible land-use changes. Thus the multiscale biophysical and socioeconomic constraints are integrated in a modeled agroecological system to determine the impact on farmers’ net income and environmental externalities caused by land-use and management alternatives. The optimization model calculates the costs of changes in land use and technology under different spatial and temporal scenarios. Optimal solutions are the byproduct of trade-off analyses among stakeholders and satisfaction of multiple constraints. The optimization exercise evaluates ex-ante the economic and social potential of the alternatives in improving the quality of life, and the results can stimulate private and official investors to fund some of the alternatives.

For the Fúquene case study, the ex-ante analysis was conducted in the HRUs that were prioritized (329 ha) for their impact on the sediment yield levels, in which N and P move until reaching the water courses. Some of these HRUs were located in the upper watershed, and others in lower altitudes. This altitudinal gradient implies differences in the production systems and climatic characteristics and, therefore, a variation in the value of the environmental service and opportunity costs of changing the land use.

The ex-ante analysis considered two main scenarios: production systems with traditional tillage (current scenario) and production systems implemented with conservation farming practices (minimum tillage, direct drilling, and green manures). Tables 2 and 3 show that net incomes of upper and middle catchment farmers implementing conservation farming schemes are increased as the negative externality is modified positively (a reduction of about 50%). From the standpoint of generating jobs, changes in the management practices in the upper catchment produce a reduction in the contracted labor; however this is compensated with an increase in the levels of employment obtained with the technological change in the middle catchment.

With the optimization model acceptable values for decision variables and optimal income thresholds (e.g. land uses, sales of agricultural products and services, loans) are identified and adjusted to an acceptable level of environmental impact. Sensitivity analysis provides quantitative information regarding the value of the imposed environmental and socioeconomic

constraints; in other words, the shadow price. Shadow prices are useful for determining the price of services and goods that do not have a market price (production of sediments, water flows, etc). This value is equal to the reduction in net income when the system has to be adjusted to reduce one unit of the negative externality. The magnitude of the shadow price depends on farmers’ socioeconomic and biophysical conditions. Thus the shadow prices will correspond to the value of resources, critical to the externalities issue. It is not related, for example, to the total amount of soil N and P, but to the quantity that moves across boundaries (Van NoordwiijkVan Noordwiijk et al., 1998; Nagle, 2001), the value of that N and P Nagle, 2001), the value of that N and P downstream right into Fúquene Lake and surrounding towns, and the value of the reduction of the externality by its source.

Shadow prices were calculated for the HRUs selected in Fúquene. These prices were obtained regarding production systems with traditional tillage but imposing a limit on the production of sediments. Under these conditions the shadow price for reducing one ton of sediments is US$85 and US$24, respectively, for farmers located in the upper and middle catchments. This price corresponds to the cost of reducing one ton of sediments in the first semester of ten consecutive semesters evaluated (the ex-ante analysis was conducted for 10 semesters). It means that the modification of the negative externality (sediments) is more important in that semester due to temporal variations related to crop rotation and climatic conditions.

From a practical perspective, it is not effective to transfer this value in just one semester. For this reason, and using the marginal changes in net incomes and sediments yields, it was calculated that the reduction of one ton of sediment costs US$ 18 and US$11, respectively, for the upper and middle catchment farmer. Regarding the obvious difficulties of monitoring actual annual changes in sediment yields caused by the farmers’ production systems, it would be more efficient to calculate the opportunity cost of one hectare if taken out of the current production systems in order to accomplish erosion limits. The opportunity cost per hectare is US$1578 for farmers located in the upper catchment vs. US$1255 for middle-catchment farmers.

As shown previously (Tables 2 and 3), however,


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this cost can be avoided if conservation farming practices are offered and adopted by Fúquene farmers because net income is improved and negative externalities are reduced. For this reason, AWP has designed a co-funding mechanism to extend the number of hectares implemented with these practices. This mechanism is explained in the following sections.

An optimum solution for guiding watershed management will consider the participants’ willingness to cooperate so that solutions requiring economic co-investment or technological changes in a specific crop system will meet this condition. Experimental economics is used to understand how individual decisions are taken and the degree of willingness displayed by the individual to implement the proposed changes.

Identifying stakeholders and strategic alliances

It is not easy to find stakeholders willing to participate in integrated watershed management because solutions need to optimize social benefits in a way acceptable to all parties. Basic assumptions of rational decision-making processes infer that stakeholders agree on objectives leading to a determined decision, distinguish different actions important to achieve their goals, and then compare all-important consequences in a set of options. These basic assumptions are not always met in the public sector, where stakeholders rarely concur in their goals (Kaboolian, 1999). Given the complexity of environmental management, a more satisfactory model (Simon, 1953) suggests that stakeholders concentrate on only a part of the problem, deciding on a partial solution that will be modified and evolve interactively.

The use of experimental economic games has demonstrated that individual decisions on natural resource use do not obey classical economic theories, which state that rational people maximize their profits without taking into account the well-being of others and have a self-interested behavior when opportunities appear. Preliminary exercises with experimental economics make it possible to identify the willingness of the stakeholders involved to cooperate in an environmental conflict. Many facets of the problem have to be considered, especially those related to power

relationships and conflict of interests. It is here that collective action plays a role in promoting understanding among the parties, reducing negative externalities and improving the benefits of all parties. Knowing that information per se is not enough to promote changes, AWP, in collaboration with the Javeriana University-Bogotá campus, included economic games (Process 3, Fig. 2) as part of the methodology. These games, based on conflict understanding (interdependencies among parties) and having stakeholder representatives as participants, identify the willingness to cooperate in solving the environmental dilemmas. The games consisted of simulated exercises in which farmers, cattle ranchers and urban dwellers modify their decisions to negotiate the current environmental conflict in consecutive rounds. Providing players with different decision options simulates the decision-making process, where the participants must choose between implementing changes in the current land-use scenario and rules, or maintaining current practices, uses and institutions.

The context and issues of the watershed are mirrored during the process. Land-use management or changes are discussed in the light of changes in income or environmental impacts. Some changes in land use mean reduced income for some stakeholders; thus social and biophysical interactions abound during the simulated discussions. Payment schemes and negotiations among both upstream and downstream stakeholders are suggested; and cost figures or values inherent in those changes are also estimated. As a result of these games, the individual rationality that oriented the decision-making process is revealed. The ways in which community members respond to conflict vary according to local diversity in terms of material wealth, social status and power (CTI et al., 2000). It is through this exercise that it is possible to reveal the effect of the collective of individual decisions. Individual decisions change when considered collectively, which, in other words, is a scale-dependent phenomenon.

In this case study, cattle ranchers located in the lower zone of the watershed have the major assets and lowest discount taxes in relation to water resources. They are not open to investing in regulatory organization, much less to exploring ways to reduce their detrimental management practices. Field experiments


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have demonstrated that under unequal conditions, the users with greater wealth seem less willing to cooperate (Cardenas et al., 2002; Cardenas, 2003). For the games, three main questions need to be answered:• Which stakeholders will continue with the same

land management practices?• Which ones are willing to change their management

practices?• Which are willing to pay or compensate those

making beneficial changes in their systems? All these questions involve dilemmas among individual and collective decisions, at the farm or plot scale and the aggregated effect at subregional or regional scales. The answers to these questions in the Fúquene case are shown in figures 5 and 6. Figure 5 refers to the mean of individual decisions of potato growers adopting conservation farming practices. Figure 6 corresponds to the mean of individual decisions of water consumers accepting to transfer funds to potato growers in order to promote the proposed technological change. Both

decision-making simulations were conducted under four scenarios:• Allowing communication between farmers and

water consumer before individual decisions were taken

• Without communication (current scenario)• Applying low sanctions• Applying higher sanctions

Results demonstrated the important potential of collective action to achieve technological changes by means of incorporating environmental services schemes. However, it highly depends on the possibility of negotiating among those actors and on their awareness of the relationship between land use and hydrological externalities.

Implementing the selected alternatives

Collective action is also required to negotiate the alternative identified (Process 4, Fig. 2). Negotiations are not only based on monetary terms; there is strong evidence that relations of trust, reputation and reciprocity act as engines of collective action, not always to maximize benefits as stated by classical economics (Ostrom, 1998; 2000); i.e. individual users do not always take the optimal decision considering economic reasons exclusively. The three primary motivations for individual farmers to adopt soil and water conservation practices are as follows: reduced risk, increased possibility for cash crop production, and avoidance of punishment (Tiffen and Gichuki, 2000).

Taking this into account, and the need for implementing the alternatives that reduce negative externalities, experimental economics makes its biggest contribution by revealing the interdependencies of the problem among the stakeholders. In this case study, this showed how different crop- and soil- management practices affect water quantity and quality. When the participants understand that quantity and quality of water flows are externalities, they realize that local agreements with their neighbors are a self-control mechanism for implementing the appropriate land uses. At the same time, the economic game reveals a preference of local communities to accept local rather than governmental management of resources because of

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Figure 5. Individual decisions made by potato growers adopting conservation farming practices.

Source: U. Javeriana (2004).

Figure 6. Individual decisions made by water consumers accept-ing to transfers funds to promote conservation farming in potato production systems.


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the latter’s poor reputation. The AWP believes that once stakeholders understand the causality and relationships among those generating the externality and those being affected, the emergent collective action will motivate the required changes. This exercise induces stakeholders to discuss issues that cross biophysical, spatial and temporal scales and different institutional boundaries. A clear understanding of the principles governing social relationships and their dependence on the biophysical context in which they operate is still a research quest.

One result obtained in this respect was the set up of a co-investment scheme to support farming conservation practices. In 2004, about 800 ha were prepared for cultivation using minimum tillage, green manures and direct drilling through a collective effort among the AWP, two farmers associations, and the local environmental authority. WAP expects to use this preliminary experience to measure the real impact in situ of conservation farming on the negative externalities causing the lake’s eutrophication, with the goal of initiating negotiations with aqueducts and water consumers to participate in the co-funding scheme and taking into account the valuation of the externalities based on the calculated shadow prices.

Following that, a monitoring and evaluation scheme needs to be established, agreed upon by the local stakeholders, the local authorities and related development projects in the study region. Results

The results obtained thus far and generated throughout the implementation of the multiscale approach for IWRM described above can be summarized as follows:• A deeper knowledge of the hydrology of the

Fúquene watershed has been obtained and is being disseminated among different stakeholders of the region.

• A better understanding of the role of land uses leaching nitrates and phosphates into the Fúquene Lake has been obtained throughout the use of standard and isotope water analytical techniques combined with geographic information and hydrological models.

• Hydrological analysis at the watershed level has

been useful to prioritize, on a more detailed scale, the sites where land-use changes could have a major impact on externalities.

• The level of prioritization was the HRU, in which an environmental and socioeconomic evaluation of land-uses scenarios was conducted. This management of scales led to integrating hydrological variables with the production systems characteristics, making it possible to evaluate land-use scenarios and to value environmental services as a function of production systems capacities.

• Tools designed for the scenarios analysis have been useful to determine the cost of changing land uses and determine shadow prices of environmental services.

• In Fúquene case, the opportunity cost of reducing sediments is high when the farmer must reduce the crops area to achieve that environmental target. However, conservation farming practices are an alternative for reducing this cost and in some cases, eliminating it.

• Adoption of conservation farming practices in existing production systems is a sound alternative to modified negative externalities while promoting positive changes in the small farmers’ income. This management alternative makes it possible for existing financial mechanisms, with some adjustment, to be effective in promoting required technological changes.

Conclusions

CONDESAN and GTZ, through the WAP, present a highly innovative scheme in which research and development maximize available data. This approach also integrates the private and public sectors in strategic alliances to fund alternatives for watershed management and pay for environmental services. The main constraints identified are the costs of basic biophysical data and the transaction costs of involving most of the key stakeholders in the process. The importance of a multiscale strategy to tackle the several ambits and biophysical dimensions found in a watershed context is highlighted. Every watershed has its own particular characteristics and the scale analysis should be considered accordingly.


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The Fúquene case illustrates an ongoing implementation of the methodology, but the scheme can be applied widely, it is running in other parallel watersheds. The only limitation in its application is the absence of negative externalities causing significant costs for the society. This is considered the engine to activate collective action for research and rural investment through the establishment of strategic alliances that are motivated by the actual positive impact on environment and rural incomes.

Additional research is needed to produce basic information inexistent in remote or marginal areas. The same can be said of the valuation of biodiversity, which is a resource that is difficult to quantify in terms of externalities. From experiences in other Andean catchments, the AWP expects to arrive at the point in which strategic alliances are identified among the different stakeholders involved. Work with funding schemes supported by CONDESAN has identified various parties interested in investing in the agreed alternatives. The attraction is the availability of capital to act as a magnet for other public and private investors in the area of concern.

Acknowledgments

The authors are very grateful to the WAP and CIAT members of the soils project, CONDESAN and the Javeriana and Andes universities (design of the economic games and their implementation in the field). Gratitude also goes to CAR for providing secondary information and constant support in the field and to the GTZ-Colombia for their support in the extension activities that are essential for the implementating conservation farming practices in the watershed.

About the Authors

Jorge Rubiano Jorge is currently Assistant Professor at the Colombian National University in Palmira, Colombia. He worked before in CIAT as postdoctoral researcher fellow in the land use project. He is an Agronomist with MSc and

PhD in Environmental monitoring and Geography respectively. He has been working in water research projects since the beginning of his career not only in the biophysical side but also in the social and economic issues related to water problems. Email : [email protected]

Marcela Quintero. Ecologist.Ecologist. Candidate for Master degree in Environmental Sciences of the University of Florida Research Assistant – International Center of Tropical Agriculture CIATSince 2001 has been working for CIAT in: Land Use Planning, Soil physics and Environmental Services Valuation. She is currently part of the research team of the Project 22 of the Water & Food Challenge Program and her work is focused on the measurement and valuation of environmental services in the pilot sites of Ecuador, Colombia, Peru y Bolivia. Email: [email protected]@cgiar.org

Ruben Dario Estrada. Agronomist-EconomistSenior Staff. Since 1997 hasSince 1997 has been the Leader of Policy Analysis of the Consortium for the Sustainable Development of the Andean Ecoregion-CONDESAN. CIP-CIAT. During this time has conducted environmental externalities analysis for Andean watersheds as a mechanism to reduce poverty. Proposed a methodological approach to include environmental degradation cost in the national accounts. Also has conducted pre-feasibility studies for investment projects. Lead a business fund to promote alliances among entrepreneurs and local producers in Andean basins. Other relevant professional experience: Liaison Officer of the Research Program of Agricultural Systems in Latin America of IDRC, and has been consultant for GTZ, World Bank, KFW, BID, ILRI,FAO and FIDA. Email: [email protected]@cgiar.org


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Guillermo Alonso Moreno Díaz. He is the principal Adviser of the “Andean watersheds Sustainable land use Project (Cuencas Andinas)” GTZ – CONDESAN/CIP – REDCAPA and Coordinator of the priorityoordinator of the priority area Resource Protection: Management of Protected Areas, Buffer Zones and Water Catchment Areas of the programme Sustainable Rural Development of the GTZ Peru. He has been also Professor at the EducationalProfessor at the Educational and Technological University of Colombia (UPTC) and “Corporación Universitaria de Boyaca”, Tunja, Colombia and Panamerican School of Agriculture (EAP), Zamorano, Honduras. Dean of Agrarian Sciences and Vice-rector of Research and Extension for the University of Tunja- UPTC.

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Multiscale Analysis for Promoting Integrated Watershed Management

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