Paying for Mountain Ecosystems

How Himalayan forests, glaciers and rivers provide water and climate benefits to the plains, and ideas like green bonuses to pay mountain states for conservation.

The Himalayas provide ecosystem services far beyond the mountains.

What they provide

Water: rivers like the Ganga, Indus and Brahmaputra support hundreds of millions downstream.
Forests that store carbon and prevent erosion.
Biodiversity.
Climate regulation.

The externality

When mountain states protect forests instead of cutting them, benefits flow downstream to plains states and the world. But mountain states bear the costs, like forgone development. This is a positive externality.

Green bonus

Himalayan states have demanded a “green bonus”: compensation for conservation. The Finance Commission has given weight to forest cover in distributing central taxes to states, partly addressing this.

Payments for ecosystem services

Programmes can pay communities to protect forests or springs, as in some pilot projects.

Glaciers

Himalayan glaciers are melting due to climate change, threatening long-term water supply and raising flood risks.

Springs

Many hill communities depend on springs, which are drying. Springshed management programmes restore them.

The protected forest

A village protects its forest from logging, preventing landslides and keeping streams flowing to farms far downstream. Yet the village earns nothing from these benefits.

Thinking conservation has no economic value

Mountain ecosystems provide water and climate benefits worth large sums.

Key takeaways

Himalayan ecosystems provide water, carbon storage and biodiversity.
Conservation benefits flow downstream, a positive externality.
Himalayan states seek a green bonus.
The Finance Commission weights forest cover in tax sharing.