Payment for Environmental Services: Sustainable Development of Water Resources in Rwanda

Rwanda aims to become an environmentally sustainable middle-income country. The problem is how the country will implement projects that alleviate poverty without increasing environmental degradation, or alternately, implement projects that protect the environment without hindering economic development. One policy approach that has been found to be effective in financing sustainability policy is Payment for Environmental Services (PES). PES is a financial policy intended to value ecosystem services, such as the regulation of water for hydroelectric and domestic use, as positive environmental externalities. This is achieved by structuring payments to land managers in return for their effective management of a specific natural resource. To ensure financial sustainability, Rwanda’s PES should follow a model where PES is a transaction between provider and buyer, with the national government in the middle creating the rules, regulations, and framework. Based on the political will it has demonstrated in implementing innovating environmental policy measures and supporting pilot projects and studies, Rwanda can and should implement PES at a national level to incentivize sustainable water provision