Payments for water services as a potential means for long-term sustainable financing for watershed conservation: the case of Uluguru mountains, Tanzania

Water is an essential commodity and a key environmental service. As we look ahead into the next decade, it will become an increasingly critical issue as it becomes an increasingly scarce resource. The current research aimed at addressing sustainability of this essential commodity as supplied by the forests of the Eastern Arc Mountains. Despite the importance of water only minimal funding from government is availed for conservation of forests that supply this service. Thus there is need to generate additional funds to supplement the government funding. This study has proposed various water user and voluntary contractual arrangements financial schemes for the users of the water to pay for the management of the Uluguru Mountain forests resources that supply this service to them. Among of the proposed fees include environmentally adjusted Water tariff; pollution charge; watershed conservation fee; Non-compliance fee and Fuel tax/levy. Two types of incentives scheme for economically empowering community around Uluguru Mountain Forests have been proposed. Namely opportunity cost based incentives scheme and benefits based incentives scheme. The study has look into the possibility of rewarding upland communities that are stewards of catchment areas. Nine innovative lessons of payment for Water Services from Australia, Brazil, Costa Rica, Colombia, Finance and the United States where payments for water are linked to the conservation of water resources are gathered and enumerated.