Uttarakhand - Department of Land Resources

Payment for ecosystem services: The Himalayan region has 69% of India‟s
freshwater resources. The region houses high concentration of poor population and the
interactions between the people and the water-related ecosystem are more evident here
than anywhere, also they are more affected due to high rainfall and sudden climatic
variations. The water resources of the region provide great environmental and
ecosystem services through fish production, biomass and wildlife, and transport of fertile
soils carried by floodwaters. The high discharge of rivers and the steep terrain provide
high potential for power generation. On the flip side, the Himalayan region is riddled with
political conflicts over sharing of water resources between states and nations. With the
rising inter and intra state water conflicts in the country, smooth inter-sectoral
management and allocation of water have become a prime need. The economic value
of the services being provided by Himalayan forests is being increasingly recognized.
Water availability in downstream states, for example, critically depends on forest cover
in the upstream Himalayan states. Several of these states have demanded that they be
compensated for maintaining high forest cover at the cost of (foregone) development
options. Internationally as well, the notion of 'payments for environmental services' is
receiving wide attention. It is being argued that services that were previously not valued
in an economic sense and hence were kept outside the purview of market/policy
mechanisms need to be explicitly valued so that upstream areas these can be paid for.
The payment system could either operate through the market (as a voluntary transfer
between a two or more well-defined groups) or through a politically negotiated interstate
(or inter-region) fiscal arrangement.
In the above context, the Report of Task Force on the Mountain Ecosystems under the
Eleventh Five Year Plan (Planning Commission 2006a) explicitly recognizes „the need
for clearer understanding of resource flows to and from mountain areas‟. The Report
also contends that this will lead to increased income to mountain communities and a
fairer distribution of earnings from natural resource exploitation and services provided
(Planning Commission 2006a). The Uttarakhand government had submitted a proposal
to the 12th Finance Commission in the context of valuation of water resources and has
asked for a financial award for the ecosystem services rendered by the state to the
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