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This article reviews 15 payment for watershed services (PWS) programs in Asia, most of which are in early stages of implementation. Important constraints against PWS in Asia include high population density that escalates transaction costs of contracting potential service suppliers, and state control over most forestlands. China has two nationwide programs that encourage afforestation to arrest soil erosion. Indonesia has several local PWS schemes to conserve catchments upstream of dams and hydroelectric plants. Vietnam, Nepal, and the Philippines have similar initiatives, funded by international donors or local hydroelectric companies. India presents two cases where village communities came up with innovative social arrangements to secure watershed services. However, in most cases conditionality is weakly enforced, and participation may be mandatory. Government is the major buyer of watershed services, while private or quasi-private companies are involved in a few watersheds in Indonesia, the Philippines, and Nepal. Evidence of PWS on poverty alleviation is tenuous in most cases. China's Sloping Land Conversion Program has helped the poor increase their asset base while landless farmers in Indonesia have received conditional land tenure.
Huang et al. (Wed,) studied this question.