In China, Beijing is one of 36 mega-cities – with a total of approximately 300 million people between them – facing critical water shortages. Tensions are mounting between urban centers and their neighboring rural jurisdictions over the increasingly scarce supply of water. For example, rural watersheds in Hebei province are a major source for Beijing’s water supply, but rural communities in Hebei also rely on these watersheds and for water and economic development. Existing governmental eco-compensation or cross-province agreements are in place for watershed services but the effectiveness of the incentives as well as the achievement of outcomes in terms of targeted water quality or quantity benefits are uncertain. Most of current work in this watershed related to source water protection is in the form of gray infrastructure,and despite massive public spending on eco-compensation projects across the country, financial incentives and policy innovation have not sufficiently linked eco-compensation with specific water-related objectives. The true trade-offs for upstream participants (including large areas of neighboring Hebei Province) have not always been clear. This has led both policymakers in Beijing and upstream stakeholders to wonder about the value and fairness of eco-compensation packages.
Our Vision
The long-term vision of the project is to find a sustainable approach to address the water crisis in mega-cities, such as Beijing. Upstream economic and downstream hydrological interests are better aligned through negotiated, performance-oriented incentive payments and coordinated action to protect water sources. Negotiated investments will better ensure fair and appropriate levels of investments or payments to upstream land managers while providing greater assurance that downstream water users (the citizens and organizations in Beijing) will realize benefits in terms of water quality or quantity.
From 2014 to 2016, BFS will initiate pilot activities in the Miyun watershed, with different socio-economic and bio-physical contexts. These experiences in these sub-catchments will inform IWS plans for scaling up within the Miyun watershed. Pilot experiences will also inform development of guidelines for IWS program development and relevant aspects of policy, finance, technology and community development for the mega-cities partnership (PMWP).
Goals
As agencies  and institutions in different regions have historically encountered problems working together, one of the main objectives of the IWS will be to foster this cooperation. The different agencies will together develop a concept for the investment in watershed services and with the help of BFS implement it.
As this is a pilot activity, the successful implementation of the IWS would lead to a scaling up of the efforts, extending beyond the Miyun watershed regionally but also serve as a model for Payments for Ecosystem Services (PES) discussions globally.
As the project is linked to the PMWP initiative, a team will formulate guidelines for IWS and publish them on the PMWP webpage.
What has been achieved so far?
The IWS project’s goal of upscaling experiences gave birth to the idea of a sustained mechanism to fund more projects aiming at improving water quality and quantity. This mechanism is called the Mega-City Water Fund (CMWF).