Peru is tackling water scarcity with nature-based solutions, leading the way in Latin America

Josefa Mería has lived in the Peruvian city of Moyobamba, where the Andes meet the Amazon rainforest, for more than 30 years. Even in this humid tropical climate, she remembers when some 20 years ago there was such little water that services to the city were frequently cut off, angering the entire city.

“There was a lot of frustration, because, you know, you can lack everything, except water,” Mería tells Mongabay by phone from Moyobamba, adding, “the problem was already becoming more and more serious.”

The problem, they discovered, was that deforestation had reached the three local watersheds, the source of Moyobamba’s water supply. As land use around these watersheds switched from rainforest to small-scale agriculture, both the quantity and quality of water that reached the city decreased.

To solve this crisis, locals, international environmental organizations, local and regional governments as well as the water utilities treatment facility collaborated to find a solution that would work for everyone. They decided to create a tariff system whereby locals were charged one Peruvian sol (about $0.30) per month as part of their water bill, which would go directly into a special fund used to invest in watershed and rainforest conservation initiatives.

This system was one of Peru’s first nature-based solutions (NbS) projects directed at preserving watersheds and quickly became a model for the country. Using the Moyobamba experience, the national government has since developed several policies and mechanisms to scale up these NbS projects to a national level, which makes Peru a leader of scaled-up NbS initiatives in Latin America.

Though some have criticized NbS projects as an inadequate solution to address climate change, others say these initiatives are essential to mitigate and adapt to the impacts that are already here. Can Peru do it right?

Moyobamba is the capital of the department of San Martín, where deforestation has long been an issue. For years, people have migrated to the region looking for space to develop farmland, mainly to grow coffee or oil palm, which thrive in tropical climates, or smaller crops of maíz or yuca.

As agriculture expanded around Moyobamba and its three main water sources, the Rumiyacu, Mishquiyacu and Almendra basins, there were not enough trees to filter the water or regulate precipitation and control the water cycle, which periodically stopped flowing to the city.

Moyobamba’s water tariff plan has played a huge role in reversing this trend. Mería, the 72-year-old Moyobamba resident, is the president of the Moyobamba’s management committee, the body that controls the funds received from the tariffs and chooses which projects to invest in.

Since the tariffs were approved in 2007, Mería says the management committee has signed over 60 conservation agreements with farmers living near the watersheds who agreed to stop deforestation and partake in conservation projects, funded by the water tariffs. The committee also began working with the water utility, which collects the funds from water users, to channel this money into conservation projects.

As a result, they have reforested some 500 hectares (some 1,236 acres) of land around the watersheds and developed conservation awareness programs to teach locals the importance of rainforest conservation, says Mería. They have also tried to develop alternative forms of income to dissuade people from expanding agriculture, which includes things like supporting artisanal crafts and local apiculture, particularly by working with trees that are good for bees, she adds.

“Awareness had to be raised, above all about the relationship that exists between the forest and the water,” Mería says, adding, “but we have paved the way.”

Marta Echavarria is the founder of the Ecuador-based EcoDecisión, an enterprise that seeks new ways to fund conservation initiatives and one of several international environmental organizations working in Moyobamba and with the Peruvian government on NbS initiatives. She says that the Moyobamba experience opened the door for creating other mechanisms and pilot projects with water utilities for water conservation initiatives elsewhere in the country. Finally, the Peruvian Environment Ministry (MINAM) created the Law on Compensation for Ecosystem Services Mechanisms, or MERESE as it’s known by its Spanish acronym, to support NbS as a national policy. This law, created in 2014, is a new kind of financing mechanism for conservation projects that works similarly to Moyobamba’s tariffs, whereby agreements are established between retribuyentes (downstream payers) who pay into a special fund and contribuyentes (upstream stewards) who undertake conservation projects using that fund. In the end, both parties benefit from better preserved water systems and ecosystems.

Today, 43 out of Peru’s 50 water utilities have adopted MERESE tariffs, reports the environmental NGO Forest Trends. This includes Moyobamba.

Sandro Domínguez del Aguila, specialist in inventory, evaluation and monitoring of water resources with MINAM, says Moyobamba is important in that it shows a new way to create alliances between various institutions and organizations, which has allowed them to apply these dynamics to national policies.

The process of developing local tariff systems for conservation hasn’t exactly been simple, explains Gena Gammie, associate director of Forest Trends’ water initiative, who has been working both in Moyobamba and with the Peruvian government to scale NbS projects. Part of the complexities are due to Peru’s strict regulations for public funds management. In Moyobamba’s case, the projects resulting from water utility tariffs are treated the same as grey infrastructure projects. Waiting for project approvals has been a timely process, as the government tries to evaluate things like reforestation programs the same way they would assess a road or a bridge.

“It’s a pretty complicated, bureaucratic, time-intensive process that also requires a lot of technical specialties,” Gammie tells Mongabay by phone from Peru, adding, “We’re also starting to simplify and clarify the processes, which is helping to bring a lot more people along.”

There are several NbS initiatives unfolding in Latin America around watershed conservation. Echavarria says this could be considered a regional trend, as policy makers start to recognize that infrastructure needs to work with nature, not against it.

“I think there is a paradigm shift that is taking place,” says Echavarria. The response has been more integrated solutions, she says, adding, “a civil engineer has to know more about biology and about ecosystems and things.”

In its latest report on NbS in Latin America, the World Resources Institute identifies 156 NbS projects at different stages of development in the region in 2021, but only 47% of these projects have actually been implemented. Mexico (31), Colombia (21), Brazil (17) and Peru (17) have the highest number of projects to date.

Peru, according to the report, leads the way for mainstreaming NbS and securing scaled investment, mainly because of laws that require water utilities to support NbS. The WRI authors say it’s essential to include infrastructure service providers in order to scale NbS initiatives as a way to step away from dependence on grants and find other financing mechanisms.

Some scientists say that scaling NbS projects is important to mitigate impacts from climate change and develop urgent adaptation strategies.

Peru in particular is vulnerable to the impacts of climate change in many ways, but one study from the International Organization of Migration points out that water scarcity is a major concern and could be one driver of migration, pushing people into already overcrowded cities. Already, Peru’s glaciers are melting and changes in precipitation patterns could lead the way to droughts, floods and landslides.

“In general, I would say the climate crisis will be felt as a water crisis,” says Gammie.

But there are many criticisms of NbS as an inadequate response to the dire impacts of a changing climate. Some academics, environmental rights activists and civil society groups say these tactics actually divert the conversation away from real climate change solutions, like switching to clean energy or forcing large-scale fossil fuel emitters to decrease their emissions.

Echavarria agrees that NBS initiatives are not the only solution, but they are one mechanism to reduce climate change impact on local communities — in this case, the danger of freshwater scarcity.

“Right now the problem is so big that you need all the alternatives,” Echavarria tells Mongabay, “This is one. It’s not the only one. But we have to develop this in parallel with the energy transitions, transitions to a circular economy, it’s a combination of factors.”

Other critics have pointed out that NbS can be damaging to both local ecosystems and communities, as these projects often don’t include an adequate consultation process with communities before implementation, thus reducing their autonomy over their own territory. Some initiatives also show poor planning and understanding of local socio-ecological systems, introducing foreign species that end up doing more harm than good.

In the case of Peru’s watershed conservation efforts, Gammie says they’ve tried to avoid these risks in several ways. First, she says, their team has carried out extensive reviews of the scientific literature on Andean as well as Andean-Amazonian ecosystems, and on their relationship with water and soil, to diminish the risk of misunderstanding these ecosystems.

“It’s important for project developers and policy makers to be aware that these are not simple relationships, and you have to be aware of the nuances in the literature,” says Gammie, adding, “It’s really important to not plant a pine plantation in the high-Andean grassland, for example, which has been done in the past.”

According to Gammie, it’s also important to have clear protocols when working with communities, ensuring they’re engaged in the projects from the earliest steps, listening to the communities’ priorities and collaborating on the project design.

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Banner image: Peru’s initiatives to protect its water sources could serve as an example for countries in Latin America facing similar problems. Image by Rhett Butler for Mongabay.