A forestry-based PES mechanism for enhancing the sustainability of Chilika Lake through reduced siltation loading

Lakes provide significant ecological and economic benefits to society. However, they are prone to over-exploitation and degradation. In this paper, we address the challenge of protecting Chilika Lake in India from heavy siltation caused by land degradation in its catchment areas. Community led afforestation is explored as a management tool for reducing soil erosion and improving fish yields in the lake. Optimal afforestation by a forestry-dependent community is compared to that from the perspective of a manager who maximizes the joint utility of the forestry and fishery-based communities. Additionally, a payment for ecosystem services (PES) mechanism is designed, which pays the forest community on the basis of reduced siltation loading in the lake while also allowing it to benefit from fuelwood harvesting in the newly restored forests. Through relating the impact of fuelwood harvesting by the forestry-based communities on fish yields of the fishing community, a dynamic optimization model evaluates the various trade-offs between environmental services provided by the forest and lake ecosystems. Findings indicate that paying the forestry-based communities for restoration can help improve the lake's lifespan in absence of other interventions. Increasing afforestation levels in the lake's catchment region to 1000 km2 can result in additional fish yield of half a million tonnes over the next hundred years, generating more than a billion dollars in revenues for the fishing communities.