Payment for Environmental Services in Brazil’s Atlantic Forest Region

The Supply Company was challenged to test this hypothesis by two organizations that had attended a large workshop and applied course supported by ELTI: the Northeast Center for Environmental Research (CEPAN) and the Brazilian Biodiversity Fund.

By using the economic valuation method of replacement cost, the pilot project proved that it’s more cost effective to conserve and restore forest cover in the source watershed than to use conventional water treatment methods. The Supply Company’s employees were pleasantly surprised by the financial savings.

The results of the pilot project led to Brazil’s first contract for a Payment for Environmental Services (PES) scheme between a water supply company and a conservation area. Equipped with these outcomes, and ELTI’s support, CEPAN’s technical team convinced the State of Pernambuco to institutionalize this conservation strategy with a state policy.

Since then, other supply companies in Brazil’s Atlantic Forest region have started similar pilot projects to test forest conservation as a means to cut water treatment costs. Conservation biologists are excited with how well this arrangement aligns with the forest remnants’ primary long-term conservation strategy.