Payment for Ecosystem Services of the Uluguru Watershed in Tanzania: Are the Buyers Willing to Pay and Sellers Willing to Accept Compensation for Their Custodianship?

In this paper we used the Contingent Valuation Method (CVM ) and its variant, the Choice Experiment (CE), to evaluate the willingness of the communities in the Uluguru Mountains (UMs) watershed to pay or accept co mpensation for watershed protection respectively. We intended to inform the debate on whether the Pay ment for Ecosystem Services (PES) model was an effective tool to ach ieve sustainable watershed management in the study a rea. We estimated the potential of the PES model and evaluated the factors which influence willingness to pay (WTP) for the Uluguru watershed conservation and WTAC for upstream co mmun ities. We estimated the potential revenues fro m water charges for do mestic uses in Morogoro Municipality, that could be used to fund the Uluguru watershed program at TZS 31.99 million (US$ 21 326.67) per month or TAS 383.92 million (US$ 255 946.67) annually. The upstream resource managers, who are the major custodian of the Ulu guru watershed would need to be compensated about TZS 100 000 to TZS 400 000 per ha per year depending on the type of co n- servation practices. Overall the results of analysis show that the current pitfalls notwithstanding, there is huge potential for the mo del to reverse the trend of ecosystem degradation in the Eastern Arc Mountains (EAM). To address the existing huddles, the practitioners of the model and local policy makers must work on keeping the public or the watershed conservation beneficiaries informed of the various environmental services they benefit fro m the PES model because they were not aware o f the concept of PES and associated benefits. The study revealed that, a regulatory framework to support compensation schemes for ecological services was required to facilitate the imp lementation of the model at a broader scale.