Challenges to establishing markets for watershed services: Learning from country diagnostics

This paper synthesises a set of diagnostic studies carried out by the International Institute for Environment and Development (IIED) and local partners in 2001-2002 to explore the potential of market-based approaches for watershed protection. The studies responded to concerns raised in earlier work by IIED that markets for watershed services were being promoted without adequate consideration of their costs and benefits. Studies carried out for four countries or regions – the Caribbean, India, Indonesia and South Africa – included an assessment of key watershed management issues and needs; potential market actors; the policy and institutional context; and interest in and demand for market-based approaches.