From research outputs to development outcomes—selected stories - Water Scarcity, Livelihoods and Food Security - page 194

• Issues in transferring voluntary contributions from urban water user to an

independent BSM investment fund;

• Issues in transferring public resources of local governments to these funds;

• How to make voluntary contributions legally binding;

• Financial independence and transparency of BSM investment funds;

• Lack of guidelines on how to establish new institutions for operating BSM

investment funds; and

• Lack of institutional structure for integrated watershed management.

Modeling was important to identify which hydrological units in watersheds
had the highest potential for change. It provided poverty profiles of farmers
and identified the natural resources they controlled and for which they could
receive payments. It also quantified the socio-economic benefits that land use
changes could bring.
The team used the soil and water assessment tool (SWAT) and ECOSAUT
(Box 8.2), a model for social, economic and environmental evaluation of land
use. The team collected the necessary data from a wide range of sources. To
determine changes in competitiveness, the team used an approach based on
the policy analysis matrix (PAM). PAM allows the use of secondary data and
requires the calculation of social values (shadow prices) for inputs and outputs.
An optimization model such as ECOSAUT can be used to determine the
shadow price of the land and labor under different technological alternatives.
The CPWF, together with CIAT, CONDESAN and other partners, played
key research and engagement roles since 2005 in the development of BSMs.
CONDESAN's work in coordinating research on BSMs in the Andes Basin
Development Challenge was especially important. It was founded in 1993 as a
spin-off of the CGIAR Ecoregional Program in the Andes. It became an
important platform for natural resource management and sustainable devel-
opment, particularly in water and watershed management. Its members include
the Andean Community of Nations, the Spanish Agency for International
Cooperation for Development and the Swiss Agency for Development and

Box 8.1 The models
The team combined information about topography, soils, weather and
land use for simulation using the ArcView-SWAT interface. They incor-
porated data on soil characteristics, daily climate data, and delineated
the watersheds using a digital elevation model. The project developed
a simulation model, ECOSAUT, which uses linear programming to
maximize farmers' net incomes under social, economical and environ-
mental constraints. The model considers multiple land use systems and
can quantify marginal benefits among a baseline and alternative land use
systems.