Willingness to Pay for Watershed Management

Abstract

Equitable payments for ecosystem services are emerging as a viable tool to protect and restore ecosystems. Unlike previous studies using contingent valuation approach in Ethiopia, this study is unique in its scope and target users. It explores the possibility of payment for watershed services as an economic tool in supporting and promoting sustainable land management and financing community-based watershed investments from electric users at a national level. We examine the sensitivity of users’ ability to generate funds for watershed services for sustainable watershed management through the raising of small amounts of money added onto a monthly electrical bill. Sampling frame covered four of the nine regional states of Ethiopia with more than 86% coverage dating back to 2014. A total of 501 urban and rural households and 100 organizations were interviewed over a five-year period from 2014–2019. We used a multistage sampling technique; we first selected cities, towns, and villages based on several data collection methodologies. The findings indicate that about 84% and 90% of households and organizations, respectively, showed their willingness to pay (WTP) additional fees for watershed management that could potentially reduce upland degradation and siltation. Specifically, more than half of the households and organizations and industries were willing to pay the surcharge for watershed management. Likewise, we developed a model estimation of results which verified the WTP amount, respectively. We concluded that funds generated from electric users play a possible role in contributing to the financing of watershed management efforts and could be taken as an important lesson for the watershed management continuum efforts Ethiopia-wide and in other countries.