What is a revenueshed?
A revenueshed is the geographic area within which revenue is generated for a defined purpose. It’s a play on words of watershed, an area that drains all water to a common outlet. The purpose of the revenueshed is to model methods of revenue generation for a designated funding goal using new and existing mechanisms. The revenueshed also expands those who pay beyond the traditional polluter pays model by incorporating additional beneficiaries into the model. For example, rather than using solely the boundary of a watershed to source funding for a water quality project, a wider boundary could be drawn to include local governments holding drinking water allocations for the specified water body.
“For many people, food comes from a supermarket and water comes from a tap. But the truth is, the food and water that sustain us come from grasslands, forests, rivers, and lakes that depend on natural processes to be sustained themselves. Setting aside wild places alone are insufficient to protect nature. Lands and waters can sustain people and wildlife; modern conservation is about finding ways to do both.”
-The Nature Conservancy 2013 Annual Report
This post is part of a series following the experiences of students participating in the EFC’s Summer Environmental Finance program in Ecuador. This post was written by Megan Garrett.
The Nature Conservancy (TNC) has initiated a program to conserve the watersheds from which water is sourced, called Water Funds. These water funds exist all over the world, but have become especially popular in Latin America following the success of FONAG (Fondo para la Proteccion del Agua), the first ever water fund, located in Quito. These water funds are an interesting financial tool in preserving our water sources and surrounding environment. Continue reading
The above graphic illustrates one of the main challenges of watershed protection: jurisdictional and watershed boundaries rarely align. This issue generates questions about who is responsible for, and who should pay for, watershed protection. Over the past decade, the Environmental Finance Center at UNC has developed and applied the concept of a revenueshed to help communities answer such questions. We define a watershed protection revenueshed as the area within which revenue is generated for watershed protection. Thinking in terms of this concept can help address watershed protection challenges by (1) cultivating accountability, (2) generating discussions among local governments, and (3) developing interactive financial tools to assist in policy decision-making. In a recent report for the Conservation Trust of North Carolina, we applied the revenueshed concept to the local framework of North Carolina’s Upper Neuse River Basin.