Payments for watershed services is a method by which a market economy is created for services that relate to protecting ecosystems. For communities surrounding a river basin, this approach rewards upstream water users, such as farmers, for adopting sustainable land-use techniques (such as terracing, mulching, and agroforestry) that protect water supply and quality for downstream users. A pilot payments-for-watershed-services project was implemented in Kenya’s Tana River Basin, which spans more than 17,000 km²and hosts about 150,000 small-scale farmers. This project aligns with Kenya’s INDC in prioritizing the adaptation measures of sustainable land-management practices and supporting ecosystem resilience. Key actions and good practices related to this pilot project are highlighted below.

• The use of sustainable land-management techniques such as terracing, mulching, and agroforestry increased crop quality and quantity, resulting in higher income for farmers.
• Effectively implemented, sustainable land-management techniques reduced downstream siltation and thus reduced wear and maintenance costs for hydropower turbines. In addition, managing downstream water flow via proper upstream land-management techniques increased the efficiency of hydropower generation. Thus it is valuable to assess impacts of land-management practices holistically across other sectors to inform integrated planning (such as energy and water planning).