Assessing the Potential for
Payments for Watershed Services to Reduce Poverty in
Highland Guatemala

It has often been assumed that payments
for watershed services (PWS) would go mostly to poor land
users, thus contributing to poverty reduction, but there has
been little empirical verification to date. This paper uses
data from highland Guatemala to assess the potential for PWS
to reduce poverty by examining whether the recipients of
payments for environmental services are likely to be poor.
The watersheds in which PWS would be feasible due to the
presence of downstream water users are mapped, and compared
to maps of poverty rates and densities. Poverty rates vary
substantially in areas where PWS could be developed. The
total number of poor that could potentially be reached if
PWS mechanisms were developed in all the water supply areas
is 1.76 million, or 34 percent of the country s poor
(excluding Petén).