Market mechanisms to nudget better management of the world's watersheds

Abstract

Catchment management Management of the world’s critically important watersheds is usually undertaken through state regulation, or through publicly funded initiatives. Much of the analysis of the effectiveness of watershed management is therefore done through a similar lens. But what about market mechanisms as a way to incentivise good watershed conservation, and repairing of damaged ones? Article by Leonie Joubert. This was the question posed to resource economist, Prof Edwin Muchapondwa, based at the University of Cape Town’s Environmental Policy Research Unit (EPRU), when he was commissioned by the United Nations Environment Programme (UNEP) to lead a global review of the subject. The take-home message of the report: market-based incentives are a good complement to existing approaches to drive watershed management, but will not replace regulation or public funding, and are not a ‘panacea’ . “In our review of case studies from around the world, we found that market-based incentives are not a replacement for regulation, ” explains Prof Muchapondwa.

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