There is growing interest in payments and rewards for environmental services in ensuring that watersheds continue performing their crucial, life-supporting functions.

A meeting at Sasumua where PRESA met the Sasumua Water Resource User Association and the Water Resources Management Authority.

Nowhere is this interest more apparent than at the Sasumua catchment area in Kenya, which alone is responsible for 20% of the fresh water supplied to the capital city, Nairobi. Water from the catchment collects at the Sasumua reservoir, from where it is piped almost 100 kilometres to Nairobi in the south.

At least half of the Sasumua catchment area is under cultivation, hosting a high population growing at 3.5% annually. The average farm size is 2.86 acres. Polluted runoff from small towns and farms results in high rates of sedimentation, high bacterial count and high water treatment costs. The major pollutants are biological and soil materials from agricultural fields, bacteria from human and animal waste, and metallic content from roads and garages.

Since 2008, the Pro-poor Rewards for Environmental Services in Africa project (PRESA) has been conducting research into possible payments for environmental services (PES) at Sasumua. PRESA is facilitating dialogue between the Sasumua catchment community, who are potential environmental service sellers and the Nairobi Water Company, which is the most likely buyer.

Research shows that certain interventions, such as grassed waterways and desilting of small upstream dams, can reduce sediments, thereby improving the quality of water flowing into the Sasumua reservoir. Implementing these measures is costly to farmers but, in a PES scheme, the water company could compensate communities for land use measures that reduce sedimentation. With reduced sedimentation, the water company could incur lower water treatment costs. The savings gained could be the source of funds to compensate farmers.

All this seems very straightforward, at least on paper. However, discussion with representatives of government institutions regulating the water sector indicates that implementing a PES scheme for watershed services in Kenya faces several policy hurdles.

For starters, Kenya’s environment policies do not specifically mention PES in natural resource management. This creates a policy limbo as regulators and potential private-sector buyers are not sure about getting involved in PES schemes. Besides, public institutions funded by taxpayers cannot appear to be compensating farmers only in one part of the country, but must replicate the same in all watersheds.

Kenya’s new constitution promulgated in August 2010 makes several changes in natural resource management, by delegating some responsibilities from the central government to new counties. The responsibility for watershed management could likewise be affected. In the latest meeting of Sasumua stakeholders held in September 2011, PRESA was advised to lobby for the inclusion of PES into the National Water Resources Management Strategy.

Other relevant policies that could be of interest to PRESA include the Landuse policy, the Irrigation Policy, the Water Policy, the Land Reclamation Policy, Forest Act, Agriculture Act and the Environment Management and Coordination Act.

Many of the policy makers that PRESA has met at its stakeholder forums in Kenya have expressed positive views on the potential of PES to address environmental sustainability and rural livelihoods. It is generally agreed that the fate of the environment lies at the hands of small holder farmers. With time, and when accommodated in environment policies, PES schemes will begin getting implemented across the country.