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GIST Advisory, in collaboration with the United Nations Environment Programme, conducted a study to assess the feasibility for a PES scheme for the water purification and waste treatment services of Lake Sevan in Armenia. As a part of the study, the value of Lake Sevan to the local, global and regional community was assessed by identifying the main ecological and environmental services, thereby establishing a link between land use change practices with restoration of Lake Sevan. This paved the way towards identifying the most appropriate payment schemes, which can provide incentives to landholders to maintain or generate the services identified.
Following were the key ecological and environmental services of Lake Sevan as identified by the study.
Economic Categories of Benefits Provided by Lake Sevan
The study revealed that in Lake Sevan, around half the respondents were willing to pay a positive monthly sum to maintain the water levels in the lake. The average sum offered under this willingness-to-pay methodology was 201 Armenian Dram per month, for the next three years. Assuming half of Armenia’s households would indeed be willing to pay such a sum over the course of three years, the value of maintaining Lake Sevan could be estimated at US $4.6 million (based on 2003 average exchange rates).The study proved that there was a clear linkage between water quality of Lake Sevan and the ongoing economic activities in the areas surrounding the lake. Over the course of only 20 years, the level of the lake had dropped by 18 m; its surface area decreased from 1,416 to 1,239 km2; and the volume of water in Lake Sevan had fallen by more than 40%.