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The American Journal of Agricultural Science, Engineering and Technology (AJASET) is 

blind peer reviewed international journal publishing articles that emphasize research, 

development and application within the fields of agricultural science, engineering and 

technology. The AJASET covers all areas of Agricultural Science, Engineering and 

Technology, publishing original research articles. The AJASET reviews article within 

approximately two weeks of submission and publishes accepted articles online immediately 

upon receiving the final versions.  

Published Media: ISSN: 2158-8104 (Online), 2164-0920 (Print).  

Frequency: 2 issues per year (January, July)  

Area of publication: Agricultural Science, Engineering and Technology. The subjects 

covered by the journal includes but not limited to:  

 

Science and Engineering 

Agricultural Economics and Agri-business  

Agricultural Engineering  

Agricultural Statistics  

Agricultural Extension and Development 

Agroforestry and Ecotourism  

Agronomy  

Agro-tourism  

Animal Science and Nutrition  

Applied Agriculture  

Applied Economics and Finance 

Aquaculture  

Bioinformatics  

Biotechnology and Biochemistry  

Climate Change and Green Technology 

Collaborative Engineering  

Computer Science and Engineering 

Computational Biology  

Crop Science and Production  

Dairy Science & Poultry Science  

Decision Support System  

Entomology  

Environmental Science and Extension 

Dental and Medical Science  

IoT, AI, 4th IR, Computer Science, ICT 

Food science, Engineering and Technology  

Genetics Technology  

Geophysics  

GIS, GPS, and Remote Sensing  

Horticultural Science  

ICT for Agricultural Development  

Irrigation and Water Resource Engineering 

Land Use and Development  

Mathematics  

Modeling of Crop and Animal System 

Pathology and Plant Protection  

Fisheries  

Plant Breeding and Crop Science  

Post-harvesting Technique and Technology 

Precision Agriculture  

Production Engineering  

Social Science and Agricultural Development  

Soil Science  

Tropical Agriculture  

Veterinary Science and Technology 

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EDITORIAL BOARD 

 

Chief Editor 

Dr Mamun-Or-Rashid 

Professor, Dhaka University, Bangladesh 

 

Board Members  

Dr. Sumit Garg, IL, USA 

Professor Dr. James J. Riley, The University of Arizona, USA 

Dr. Ekkehard KÜRSCHNER, Agriculture Development Consultant, Germany 

Professor Dr. Rodriguez Hilda, USA 

Professor Dr. Michael D. Whitt, USA 

Professor Dr. Wael Al-aghbari, Yemen 

Professor Dr. Muhammad Farhad Howladar, Bangladesh 

Dr. Clement Kiprotich Kiptum, University of Eldoret, Kenya 

Professor Dr M Shamim Kaiser, Professor, Jahangirnagar University, Bangladesh 

Professor Dr Mohammad Shahadat Hossain, Chittagong University, Bangladesh 

 

Managing Editor 

Md. Roshidul Hasan 

Professor, Department of Computer Science and Information Technology,  

Bangabandhu Sheikh Mujibur Rahman Agricultural University, Banglades

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IDENTIFICATION OF KEY COMPONENTS OF PAYMENT FOR ECOSYSTEM 

SERVICES (PES) MECHANISM IN BEGNAS LAKE WATERSHED OF POKHARA-

LEKHNATH METROPOLITAN CITY, NEPAL 

Arpan Gelal1, Ukesh Raj Bhuju2 

DOI: https://doi.org/10.5281/zenodo.5498319 

ABSTRACT 

Payment for Ecosystem Service (PES) scheme for certain ecosystem services is being used as 

a mechanism to provide incentive to suppliers of the services by the beneficiaries. In Nepal, 

PES like schemes is in practice since a long time, though the discussions on formal PES 

schemes have recently been started. This study has been carried out at Begnas Lake 

Watershed (BWS), a Ramsar site, at Pokhara-Lekhnath Metropolitan of Nepal. It aims to 

understand the perception of local residents towards the implementation of PES scheme in 

BWS. Furthermore, it also identifies key actors for PES implementation at BWS, their role in 

PES design and implementation as well as potential payment mechanism for the ecosystem 

services within the PES scheme at BWS. Finally, institutional structure for PES design and 

implementation is also presented. The study finds positive perception of local people towards 

initiating payment mechanism for the use of ecosystem services to ensure environmental 

conservation and sustainable management of the resources. Both upstream and downstream 

population favors mix of public/private PES scheme while upstream population favors cash-

payment type scheme and downstream population favors the capacity building of upstream 

communities in conservation efforts. It is also noted that upstream people favor input-based 

mode of payment and downstream people are inclined towards output-based payments. The 

study found some ‘PES-like’ practices operational in the watershed. The study recommends 

the formation of ‘Begnas Watershed PES Advisory and Coordination Committee’ with due 

participation of identified stakeholders to initiate and institutionalize formal PES mechanism 

at BWS. 

Keywords: Begans Lake Watershed, Payment for Ecosystem Services, Stakeholders, 

ecosystem services  

1 Faculty Lecturer, National College, Kathmandu University, Nepal 

arpan.gelal@nationalcollege.edu.np 

2 Dean, School of Development Studies and Applied Sciences, Lumbini Buddhist University, 

Nepal 

 

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https://doi.org/10.5281/zenodo.5498319
mailto:arpan.gelal@nationalcollege.edu.np


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INTRODUCTION 

With the increase in population, growing demand of ecosystem services and less efforts in 

conservation have led to a swirl of conservation innovations over the past decade in the form 

of various types of payment schemes (Wunder, 2007).  Various payment schemes have been 

linked extensively to the provision of specific ecosystem services which resembles the 

concept of Payment for Ecosystem Services (PES) (Ferraro & Kiss, 2002; Wunder, 2007).  

PES occurs when the beneficiaries or users of an ecosystem service make payments to the 

providers of that service.  In practice, PES takes the timely form of payments to suppliers for 

using various types of ecosystem services.  The basic idea is that whoever provides a service 

should be paid for doing so (Fripp, 2014).  PES has come to conservation front in the past 

decade as a possible solution to address environmental problems and ecosystem restoration.  

PES is a relatively new cooperative tool for environmental protection, it is important if used 

carefully (UN, 2014).  

In context of Nepal, various forms of payment mechanisms exist for ecosystem services like 

drinking water, irrigation and tourism.  But these are not the formal PES mechanisms because 

of lack of key elements of PES.  In actual practice, the service providers do not receive 

payment for management of services.  There is potential of localized PES schemes for 

sustainable management of resources in Nepal (IUCN, 2013).  However, there lacks the clear 

provision within the policy, acts, rules, regulations and guidelines to institutionalize PES and 

benefit sharing.  Awareness and empowerment of local communities is mandatory to end the 

situation of managers of services remain suffered and free riders getting the benefit.  PES 

mechanism can play a significant role to improve livelihood of people and enhance 

biodiversity conservation (Kunwar, 2008). 

Designing mechanisms for PES help to motivate individuals and communities to take actions 

that increase or maintain the provision of ecosystem services.  As nature provides the 

services, it is not clear whom to pay but creating mechanisms or institutions for payment 

provide motivation for those who conserve the ecosystem.  It can help to fulfill the goal of 

both conservation and sustained use of environmental services in a win-win scenario for both 

buyers and sellers.   

This study intends to outline the perception of local residents towards PES mechanism for 

sustainable conservation of watershed along with perception towards potential approach and 

mode of payment in Begnas Lake Watershed in Pokhara-Lekhnath Metropolitan city of 

Nepal. It also identifies key actors of PES mechanism along with existing payment schemes. 

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Furthermore, this study outlines potential payment modality and role of identified 

stakeholders in the formal PES scheme to be implemented. Finally, the institutional structure 

of the PES scheme for the Begnas Lake Watershed is also designed. 

 

MATERIALS AND METHODS 

Description of the study site 

Begnas Lake is a freshwater lake situated in the Pokhara-Lekhnath Metropolitan of Kaski 

district in Nepal.  It extends between 28º 7’ N to 28º12’ N latitude and 84º5’ E to 84º10’ E 

longitudes. The average depth of water in the lake is estimated to be 6.6 m with the water 

surface elevation 655.7 m abmsl (NLCDC, 2010). Begnas Lake is an eutrophic fresh water 

lake with total catchment area of 18.7 square km. The water body of the lake is 3.27 square 

km (373 ha) including the shallow areas i.e. the marsh fields towards west, north and east.  

However, the estimated land area of the watershed is 4,504 ha (Oli, 1996).   

Begnas is the second largest lake of Pokhara valley after Phewa Lake in Nepal. It was 

designated as the Ramsar site on 2nd February 2016 along with other lake clusters of Pokhara 

valley (Ramsar, 2016).  Begnas Lake Watershed (BWS) is undergoing various developmental 

pressures; mainly the urbanization which can be perceived as the major threat to sustainable 

environmental management.  Drastic changes in the land use practices; conversion of 

cultivable land into residential areas and rapid increase in commercial areas have created 

significant impact on the environmental aspects of the watershed. Begnas Lake and its 

watershed area along with nearby Rupa Lake is a famous tourism site with large inflow of 

both domestic and international tourists. 

A seasonal monsoon stream Syankhudi Khola is the major inlet stream to the lake.  Small 

seasonal streams namely Lipdi, Maladi, Majhikuna are the other supporting inlet to the 

Begnas Lake. The outlet stream is Khudi Khola. Begnas Lake supports livelihood of large 

number of households and watershed area is extensively developed for domestic and 

international tourism.  Moreover, Begnas Lake holds importance from the point of boating, 

trekking, bird watching and other eco touristic activities. Downstream population and people 

around Begnas Lake are directly dependent on the ecosystem services of the lake. 

 

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Figure 1 Geographical location of the study site 

(Source: Adopted from Li-Bird, 2016) 

Research Methodology 

The study used both qualitative and quantitative mode of enquiry. The research proceeded 

with identification of spatial and temporal context of the study site, identification of sampling 

frame, determination of sample size and identification of concerned business, governmental, 

nongovernmental organizations and concerned communities either as a producer, consumer 

of ecosystem services or involved in environmental conservation activities at the study site.  

Qualitative tools for the study included Observation, household surveys, Key Informant 

Interviews (KII), Focus Group Discussion (FGD) and desk research. The identification of 

location for household survey was done with consultation with experts and local environment 

activists. Sundari Danda, Bhanjyang-Panchbhaiya, Majhikuna and Lamichhane gaun at 

Majhthana were the places selected for household survey at upstream community whereas 

household survey at downstream community was carried out at Piple, Sisuwa and 

Gagangauda areas. The rationale for selection of these places is that these places at upstream 

are well known for community forestry management practices and the selected places at 

downstream are the major users of ecosystem services either fishery, boating, irrigation or 

tourism. A total of 500 households representing upstream and downstream were surveyed. 

Focused Group Discussions (FGD) and Key Informant Interviews (KII) were carried out with 

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various stakeholder to identify the current payment mechanisms, their perceptions towards 

PES and their potential role in the formal PES mechanisms. Households from upstream 

community and downstream community were sampled using Strategic sampling procedure of 

Purposive sampling method.  The major advantage of using purposive sampling is that the 

samples were identified under certain conditions to be assured they are the reliable sources of 

information, and a small sample size would be reliable to make generalization of the study.  

Special attention was given that sampled population includes beneficiaries of community 

forests, beneficiary groups like fishermen, boaters, hotel owners, other tourism entrepreneurs, 

farmers and other land users.  The households were considered eligible for the sample under 

following assigned criteria: 

• Residing at the study area atleast for five years. 

• Household head must be atleast 30 years of age. 

• Must have general knowledge about the environment and natural resources of the 

study area. 

• A member of community forest user group (CFUG) for upstream. 

• Involved in boating, fishing, irrigation, tourism or the beneficiary any other ecosystem 

services for the downstream. 

Various institutions/organizations were also consulted for the purpose of the study. Following 

are the institutions consulted: 

Table 1 Organizations consulted for the study 

S.No. Organizations Rationale 

1 Begnas and Rupa Tourism Promotion Committee Major user of Ecosystem Services 

2 Begnas Taal Boat Entrepreneurs Association Major user of Ecosystem Services 

3 District Agriculture Development Office Major user of Ecosystem Services 

4 District Forest Office, Kaski Concerned stakeholder 

5 Fish Entrepreneurs Association, Begnas Taal Concerned stakeholder 

6 Hotel and Restaurant Association, Lekhnath Major user of Ecosystem Services 

7 Ilaka Forest Office, Sisuwa Concerned stakeholder 

8 Irrigation Development Division, Kaski Concerned stakeholder 

9 LI-BIRD, Pokhara NGO working in BWS environmental 

aspects of Begnas and Rupa Lake 

10 SEED Foundation, Panchbhaiya NGO working in BWS environmental 

aspects of Begnas and Rupa Lake 

11 Ward Office, PL Metropolitan 30 & 32 Concerned stakeholder 

12 Water User Association, Begnas Major user of Ecosystem Services 

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Focus Group Discussion and Key Informant Interviews were conducted among the people 

representing various fields like business, leading farmer, local politician etc. to gather overall 

information regarding the availability of ecosystem services, tradable and consumptive 

ecosystem services and gather understanding on key components and general perception 

towards PES scheme.  FGD was carried out using a semi structured checklist. 

RESULTS AND DISCUSSION 

Respondent’s perception on PES 

Perception for activities of upstream people affecting flow of Ecosystem Services 

80% of upstream respondents and 60% of downstream respondents reported that they believe 

activities of upstream people effects the availability of ecosystem services to downstream 

people. However, 13.33% of upstream respondents and 16.67% of downstream respondents 

didn’t believe on activities of upstream people affecting flow of ecosystem services. 6.67% of 

upstream people and 23.33% of downstream people replied that they had no idea about it. 

Table 2 Respondents' perception on activities of upstream people on flow of ES 

 

(Source: Field study, 2020) 

Perception on paying and receiving compensation for use of Ecosystem Services 

73.33% of upstream respondents believe that downstream should pay compensation for their 

contribution on preserving ecosystem while 16.67% replied that they don’t need any such 

compensation. However, 10% of respondents didn’t have idea about it. Regarding 

downstream respondents, 70% of them are ready to pay compensation for upstream people. 

20% aren’t willing to pay whereas 10% didn’t have any idea whether to provide 

compensation or not. 

Table 3 Perception on paying and receiving compensation 

 

S.No. 

 

Perception 

Upstream Downstream  

% Of respondents % Of respondents 

1 It affects 80.00 60.00 

2 It does not affect 13.33 16.67 

3 Don’t know 6.67 23.33 

 Total 100 100 

 

S.No. 

 

Perception 

Upstream (Receive) Downstream (Pay) 

% of respondents % of respondents 

1 Yes 73.33 70.00 

2 No 16.67 20.00 

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(Source: Field study, 2020) 

Perception on role of PES for sustainable management of watershed resources 

Majority of respondents believe that implementation of PES scheme could enhance 

sustainable management and conservation of watershed resources. 76.67% of upstream 

respondents and 63.33% of downstream respondents believed that PES could enhance 

conservation. However, 13.33% of upstream respondents and 23.33% didn’t believe role of 

PES in sustainable conservation and management. Meanwhile 10% of upstream respondents 

and 13.33% of downstream respondents had no idea on it. 

Table 4 Role of PES on conservation and sustainable management 

(Source: Field study, 2020) 

Perception on type of appropriate PES scheme 

After elaborating the respondents about types of PES schemes i.e., public, private or public-

private; most of the respondents favored public/private scheme. 66.67% upstream 

respondents and 70% downstream respondents chose public/private scheme. 23.33% 

upstream respondents and 13.33% downstream respondents favored private scheme whereas 

10% upstream respondents and 16.67% downstream respondents favored public PES scheme. 

Table 5 Respondents' perception on type of payment scheme 

(Source: Field study, 2020) 

 

3 Don’t know 10.00 10.00 

 Total 100 100 

 

S.No. 

 

Perception 

Upstream Downstream 

% of respondents % of respondets 

1 PES is needed for sustainable management of 

lake ecosystem  

76.67 63.33 

2 PES is not needed for sustainable 

management of lack ecosystem 

13.33 23.33 

3 Don’t know 10.00 13.33 

 Total 100 100 

 

S.No. 

 

Perception 

Upstream Downstream 

% of respondents % of respondents 

1 Public 10.00 16.67 

2 Private 23.33 13.33 

3 Public-Private 66.67 70.00 

 Total 100 100 

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Respondents’ perception on approach of payment 

When asked what the approach of payment could be, half of upstream respondents reported 

that cash payment from the downstream people would be appropriate. However, 23.33% 

reported that downstream people should help in building capacity for upstream people, while 

10% believed that downstream people should help in infrastructure development as 

compensation of using ecosystem services. However, 16.67% were willing to pay for lake 

management. Regarding downstream respondents, majority of respondents chose to pay for 

capacity building of upstream people (33.33%). Other chose infrastructure development of 

upstream (26.67%), cash payment (26.67%) and lake management (13.33%). 

Table 6 Respondents’ perception on payment approach 

Respondents’ perception on mode of payment 

Majority of upstream respondents (63.33%) stated in favor of Input based payment i.e., 

payment for the process or initiatives of upstream conservation rather than the payment for 

benefit generated due to conservation attempts or investments. However, 36.67% of upstream 

respondents favored for output-based payment. But majority of downstream respondents i.e. 

73.33% favored Output based payment scheme although 23.67% went for input based 

payment scheme.  

Table 7 Respondents’ perception on mode of payment 

 

(Source: Field study, 2020) 

 

 

S.No 

 

Payment approach 

Upstream Downstream 

% of respondents % of respondents 

1 Cash payment 50.00 26.67 

2 Capacity building 23.33 33.33 

3 Infrastructure development 10.00 26.67 

4 Lake management 16.67 13.33 

 Total 100 100 

(Source: Field study, 2020) 

 

S.No. 

 

Mode of payment 

Upstream  Downstream  

% of respondents % of respondents 

1 Output-based 36.67 73.33 

2 Input-based 63.33 23.67 

 Total 100 100 

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Respondents’ perception on who should pay 

13.33% of upstream respondents stated that tourism entrepreneurs should be made liable for 

payment, same percentage of respondents believed District Development Committee (DDC) 

should pay. Only 6.67% stated fishermen should pay whereas 13.33% believed downstream 

farmers should pay and majority, 53.33% believed all of them should be made liable for 

payment. Considering downstream respondents, 30% of respondents reported tourism 

entrepreneurs should be made liable for payment whereas same 13.33% percentage stated 

DDC and farmers are to be made liable. 16.67% stated payment to be made from fishermen 

and 26.67% believed all of them should pay.  

Table 8 Respondents’ perception on who should pay 

(Source: Field study, 2020) 

Perception on condition for payment to upstream 

When asked to downstream respondents about what upstream people should do to ensure 

regular flow of ES so that payment could be made, 13.33% replied that forest conservation 

should be the major condition. Very few, 6.67% replied that upstream should assure managed 

urbanization whereas 10% stated that upstream should assure about sustainable land use 

practices. Same 10% stressed on sustainable agricultural practices, 3.33% reported that 

pollution minimization should be major condition whereas 10% favored for conservation of 

water bodies as the major condition. However, almost half of the respondents i.e., 46.67% 

reported that all these factors should be the condition of regular flow of ES to downstream 

people. 

Table 9 Downstream respondents’ perception on conditions for payment 

 

S.No. 

Who should pay Upstream Downstream 

% of respondents % of respondents 

1 Tourism entrepreneur 13.33 30.00 

2 District Development Committee 13.33 13.33 

3 Farmers 13.33 13.33 

4 Fishermen 6.67 16.67 

5 All of them 53.33 26.67 

 Total 100 100 

 

S.No. 

 

Conditions 

Downstream 

% of respondents 

1 Forests conservation 13.33 

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(Source: Field survey, 2020) 

Key PES actors 

Sellers/suppliers 

To develop PES scheme, Ssllers/suppliers are the crucial actors whose actions generate 

ecosystem services or they simply are in the position to ensure and safeguard regular flow of 

ecosystem services. Generally, land users, individual farmers, community groups, 

government agencies, and even private companies are sellers of ES (Jindal and Kerr, 2007). 

In context of BWS, upstream area is the major supplier of ES. Land user and farmers whose 

land use and agricultural practices impact soil erosion, flooding, water purification, sediment 

and soil retention are the major suppliers of ecosystem services. Community forests and user 

groups, owner of private forests, orchids and garden owners are other important suppliers of 

prioritized ecosystem services like irrigation in downstream, erosion control, carbon 

sequestration, water recharge and discharge, habitat for wildlife and availability of water, 

sedimentation control and nutrient retention at Begnas Lake. Furthermore, community 

organizations and local government bodies working for local conservation attempts and 

environment friendly development initiatives like road construction are also suppliers of 

ecosystem services.  

Buyer/Beneficiaries 

The development of PES scheme would be waste of time and resource without the 

identification of buyers of certain ecosystem services (ES). Buyers may directly consume or 

get benefited from the ecosystem service or may be indirectly benefiting from certain service, 

so clear identification of buyers of ES is crucial. In case of BWS, tourists and associated 

tourism entrepreneurs are the major buyers of ES of Begnas Lake. There are 165 hotels and 

restaurants in or around Begnas along with around 200 tea shops. Furthermore, the travel and 

tour operators selling Begnas packages are other major buyers. The serenity of the Lake is 

2 Managed urbanization 6.67 

3 Sustainable land use practices 10.00 

4 Sustainable agricultural practices 10.00 

5 Pollution minimization 3.33 

6 Conservation of water bodies 10.00 

7 All of above 46.67 

 Total 100 

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major tourist attraction whose beauty depends on rate of erosion and nutrient flow from 

upstream area. Fishermen and farmers are the potential buyers of fishing and irrigation 

services. Livelihood of 42 Jalari families is directly dependent on wetland resources, 5000 

farmers downstream are beneficiaries of Begnas irrigation system.  Begnas Lake Boat 

Entrepreneurs’ Committee (BBEC) is another buyer of ES. Nepal Electricity Authority 

(NEA) could be the potential buyer of electricity generated from Begnas Lake. Three types of 

service users i.e., beneficiaries could be identified in BWS. First group are the immediate 

final users like fishermen or farmers who use water resources for fishing or irrigation. Second 

group is the business group, like Begnas Lake Boat Entrepreneurs’ Committee, Lekhnath 

Hotel and Restaurant Association or Nepal Electricity Authority. And the third as well as 

important indirect beneficiary is the government or local authorities. For instance, 

municipality levying tax on hotels and restaurant and District Development Committee 

(DDC) collecting tax from boaters or fishermen’s association and central government 

collecting visa fee from the tourists. 

Intermediaries 

Intermediaries serve as agents linking buyers and sellers and helps with scheme design and 

implementation.  They help users and suppliers set up successful PES transactions. The 

potential intermediaries range from individuals, groups, NGOs, local governments, donors to 

private companies. They play the role of linking the service users and suppliers and taking 

lead over the implementation of the PES program (Jindal and Kerr, 2007). They help in 

building rapport between buyers and sellers and third-party monitoring of overall PES 

mechanism. In context of BWS local NGOs working could take a lead as intermediary. A 

Pokhara based NGO called LI-BIRD working in BWS since many years has recently taken a 

lead to establish PES like basket fund for watershed conservation. Local government could 

also act as intermediary to link upstream and downstream.  The concerned ward officials 

could take a lead. The governmental departments and line agencies like District Forest Office 

(DFO), District Agriculture Development Office (DADO), District Irrigation Development 

Office (DIDO), District Soil Conservation and Watershed management (DSCWM) offices 

who are connected with both upstream and downstream people could act as an independent 

third man in design and monitoring of PES mechanism. 

Knowledge providers 

Knowledge providers are essential to provide ideas and technical assistance regarding scheme 

development and implementation. They ensure the PES scheme designed is appropriate and 

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viable. They provide advice on appropriate management practices to service providers and 

steps to be taken to secure long term provision of ES for trade in PES mechanisms. 

Knowledge providers generally includes valuation experts, land use planners, resource 

management experts, regulators and business and legal advises to assure PES contact abides 

by the national laws and regulations. In context of BWS, local NGO LI-BIRD could be a 

primary knowledge provider regarding PES concerning it has initiated to develop basket fund 

for conservation linking service users and suppliers. Similarly other NGOs and INGOs like 

WWF, IUCN, Natioanal Trust for Nature Conservation (NTNC) who have worked for PES at 

other places could extend their help here. Various institutions like Agriculture and Forestry 

University (AFU), Fishery Research Centre, Begnas, Regional agriculture research Station, 

Lumle, Regional Irrigation Directorate, Pokhara, Regional Irrigation Directorate, Pokhara 

and other bodies like DFO, DADO, DIDO, FECOFUN, DSCWM could also extend 

knowledge support in PES scheme development in BWS. 

Table 10 Key PES actors in BWS 

Sellers/suppliers of ES Buyers/ Beneficiaries of ES Intermediaries Knowledge providers 

• Community forest 

User groups 

• Private land owners 

• Government as 

public land owners 

• Farmers in the 

upstream 

• Fruit orchid owners, 

coffee farmers and 

private forest 

owners 

• Community 

organizations and 

groups working for 

environmental 

conservation in 

upstream 

• Local government 

agencies working 

for conservation of 

upstream ecosystem 

• Begnas Lake Fish 

Entrepreneurs’ 

Association (BFEA) 

• Begnas Lake Boat 

Entrepreneurs’ 

Committee (BBEC) 

• Water User Association 

(BIS) 

• Lekhnath Hotel and 

Restaurants Association 

• Begnas Rupa Tourism 

Promotion Committee 

• Pokhara-Lekhnath 

Chamber of commerce 

and industry 

• Travel agencies selling 

Begnas Packages 

• National and 

International tourists 

• Nepal Electricity 

Authority (NEA) 

• Small tea shop owners 

• District 

Development 

Committee, Kaski 

• Pokhara-Lekhnath 

Municipality (ward 

29, 30, 31, 32) 

• Madi village council 

(Gau palika) 

• Nepal government 

• District Forest 

Office (DFO) 

• District Agriculture 

Development Office 

(DADO) 

• District Irrigation 

Development Office 

(DIDO) 

• Federation of 

Community Forestry 

User Groups Nepal 

(FECOFUN) 

• NGOS & INGOS 

• LI-BIRD, Pokhara 

• SEED Foundation, 

Panchbhaiya 

• NGOS & INGOS (WWF, 

IUCN, NTNC etc.) 

• District Forest Office (DFO) 

• District Agriculture 

Development Office (DADO) 

• District Irrigation 

Development Office (DIDO) 

• Federation of Community 

Forestry User Groups Nepal 

(FECOFUN) 

• Department of Soil 

Conservation and Watershed 

Management (DSCWM) 

• Department of road 

• Fishery Research Centre, 

Begnas 

• Regional agriculture 

directorate, Pokhara 

• Regional Irrigation 

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and street vendors 

around Begnas Lake 

• Downstream farmers 

• Land owners 

downstream 

• Local government bodies 

earning revenue from 

tourism and related 

enterprises 

• Researcher and explorers 

• Department of Soial 

Conservation and 

Watershed 

Management 

(DSCWM) 

 

directorate, Pokhara 

• Regional agriculture research 

Station, Lumle 

• Agriculture and Forestry 

University 

• Institute of Forestry, 

Tribhuvan University 

• Business and legal advisers 

• Academicians and 

researchers 

• National College, Kathmandu 

University 

(Source: Field study, 2020) 

Existing PES mechanism in BWS  

There is no formal PES mechanism in existence in BWS. However, it was found that 

stakeholders have been investing in Begnas Lake management activities every year. As 

reported by Jhalak Jalari, president of Benas Fish Entrepreneurs Association (BFEA) around 

10% of annual income of annual profit is invested in lake management which includes 

cleanliness campaigns, removing noxious weeds including Jal khumbhi (Pistia stratiotes) and 

donation to road construction activities. The income from royalty through sell of fish i.e., 

NRS 5 per kg from the fishermen is collected and invested in lake management activities. 

Dhaknath Kandel, president of Begnas Boaters Entrepreneurs Committee (BBEC) also 

reported that BBEC also regularly invests in lake cleanliness and weed removal. BBEC, 

BFEA, Lekhnath Hotel and Restaurant Association, local government bodies and other line 

agencies invest in organizing Fish festival in Begnas Lake; usually in the month of Falgun 

(February - March). Certain percentage of profit of Fish festival is used in lake management. 

Recently, LI-BIRD, an NGO working in BWS has initiated the development of basket fund 

for watershed conservation. Established in September 2016, ‘Begnas Lake Conservation 

Fund’ is in due process of registration and supposed to work under Local Self Governance 

Act, and Local Self Governance Regulations. LI-BIRD has prepared Begnas Lake 

Conservation Fund Management Guidelines and has proposed among stakeholders. This fund 

would be managed by a committee formed among stakeholders after extensive discussion 

among them. The major aim of fund is proposed to be ecosystem conservation, biodiversity 

and lake conservation, construction of environment friendly infrastructures, forest 

conservation, promote local skills on organic farming, environment friendly agricultural 

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practices, bioengineering activities and construction of water sports infrastructure. The 

proposed potential funding source of fund is donations from INGO/INGOS, income from 

festivals and celebrations, amount collected from beneficiaries like BBEC, BFEA, Hotel and 

Restaurants Associations, Community forests, local government bodies and other 

beneficiaries. Regarding, working mechanism, the management committee would receive 

applications from local groups or organizations and funds would be provided after detailed 

examination with due priority for proposals from upstream, contributing to lake conservation 

and intended on uplifting livelihood skills on wetland dependent minority groups (LI-BIRD, 

2016a). However, evaluating the funding mechanism, working guidelines and investing 

criteria and process, the initiative couldn’t be termed as PES mechanism as there is no 

compulsory provision of payment by beneficiaries; it is a ‘PES like’ mechanism.  

Potential Payment mechanism for ES of BWS 

Various payment mechanisms can be adopted in BWS for payment of its major ecosystem 

services. The common mechanism could be entrance fee, service charge, use fee, permit fee 

and channelizing the portion of royalty regenerated from sale of services for conservation 

activities and ecosystem management.  

Table 11 Payment mechanism for major ES 

Major ES Payment mechanism 

Recreation and Ecotourism Entrance fee, Service fee and taxes, Use fee 

Erosion control (Soil, sediment 

and nutrient retention) 

Mutually agreed channel, additional charge on govt. taxes and investment 

on upstream 

Fishing and irrigation Water use fee, Additional charge and permit fee for fishing 

Ground water recharge and 

discharge 

Portion of royalty generated from water distribution, individual annual 

payment for lake management and conservation 

Habitat for wildlife (Biodiversity 

conservation) 

National and international grants for conservation, trade of tradable 

species, people’s WTP for conservation 

Carbon sequestration International payment based on capacity building or infrastructure or 

livelihood development based on international accepted market price for 

carbon sequestration 

(Source: Field visit, 2020) 

Roles of key stakeholders in PES 

Discussion with various service users, suppliers, entrepreneurs’ groups, government line 

agencies, local government body, non-governmental organizations, community organizations 

through focus group discussion, key informant interview and stakeholder consultation helped 

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to generalize the potential roles of key stakeholders in PES process to be designed and 

implemented in BWS. District Development Committee can take a lead to implement/initiate 

PES in BWS with due consultation with other stakeholders and provide technical support in 

designing working mechanism of PES with due monitoring activities all the way. 

Government line agencies (DFO, DADO, DIDO, DSWCO, Nepal Tourism Board (NTB), 

could help design PES scheme along with its organizational structure and funding mechanism 

through their input in particular ES. They can provide technical and material support to build 

up capacity of sellers in restoring ES and ensuring efficient flow of ES. 

NGOs/INGOs can also play a significant role. As LI-BIRD has initiated a ‘PES-like’ scheme 

by establishing conservation fund in BWS, similar type of assistance could be provided by 

other INGOs like WWF, IUCN, NTNC etc. who have experience and expertise in designing 

and implementing PES in other areas. However, their key roles could be raising awareness 

about importance of PES, provide technical and material support and help in monitoring. As 

local government body, Pokhara-Lekhnath Metropolitan, village councils and concerned 

wards can provide consent on proposals about PES implementation in BWS and also provide 

legal consent to collect any type of service fee, collect and invest funds legally and help to 

resolve any conflicts arising in the process. They themselves can design and implement PES 

mechanism through legal measures. As a key party in PES scheme in BWS, service providers 

like Community Forestry User Groups (CSUG), land users, farmers or community groups 

should involve in negotiation process and show their commitment in ecosystem conservation 

and show their capacity in doing so. They should commit for proper fund investment. As a 

major service user groups, BFEA, BBEA, Water User Association (WUA), downstream 

farmers and downstream residents; their key roles include their commitment in payment for 

use services in a timely basis, involve in negotiation process as well as help in conserving 

ecosystem of upstream through constructive suggestions and participate in monitoring of PES 

fund mobilization. Local political parties could advocate for payment mechanism or influence 

their elected local representative to initiate such kind of scheme. Moreover, community 

groups and networks might assist help in capacity building and monitoring. Local leaders of 

political parties could build consensus among people for need and implementation of PES 

scheme and mediate any conflicts arising in the process. 

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Institutional structure for PES implementation 

Figure 2 Institutional mechanism for PES implementation 

The suggested institutional structure for PES in BWS is sketched in figure below. The 

advisory and coordination committee should be formed including the representatives of major 

concerned government line agencies and local government agencies like DFO, DADO, 

DIDO, DSCWM, Metropolitan, wards etc. This committee should initiate and coordinate the 

overall process including the buyers, sellers and other intermediaries. The buyers and sellers 

should be made to come to a common platform for negotiation. NGO/INGOs, private sector, 

legal advisors and PES experts should act as intermediary and provide knowledge for 

effective negotiation and implementation of PES scheme. This should lead to a creation of 

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institutional mechanism for PES implementation. A third-party monitoring through individual 

group is suggested to monitor the effectiveness and efficiency of the PES scheme. The 

capacity building of the sellers or suppliers and conditionality by buyers remains crux of 

effectiveness of mechanism. 

CONCLUSION 

There are various entrepreneurs’ group in Begnas Lake area that are making notable income 

from the ecosystem services of BWS. Particularly, Begnas Fish Entrepreneurs’ Association, 

Begnas Boat Entrepreneurs’ Committee, Water User Association of Begnas Irrigation System 

(BIS), Lekhnath Hotel and Restaurants Association, Various travel agencies, small street 

vendors around Begnas Lake and tourists visiting the lake are the direct beneficiaries of ES 

services of BWS. They depend on boating, fishing, tourism entrepreneurship, which is 

primarily derived from the water regulation and recreational services of Begnas Lake i.e., 

BWS. So, they should be liable to pay the suppliers of those services i.e., the upstream land 

users, farmers and conservationists. Moreover, all the downstream residents of the watershed 

are beneficiaries of ES of watershed. But these beneficiaries are playing negligible role in 

watershed conservation. Their role is limited to conducting some sorts of Begnas Lake 

cleanliness campaigns and organizing Begnas Fish Festival. The major actors who are trading 

off some cost for generating the flow of ES are not getting the returns for their efforts. For 

this, development of PES mechanism would be best practice to ensure sustainable 

management and conservation of watershed as well as upliftment of livelihood of upstream 

people. 

The consultation with major stakeholders revealed that they are ready to work for the 

environment conservation in the watershed. The portion of their income can be invested for 

conservational activities as well as to fund developmental initiatives in the upstream. 

Moreover, all the surveyed respondents, as a beneficiary of various ES are willing to pay for 

the sustainable management and conservation of the watershed. But there lacks the formal 

mechanism for sustainable financing the conservation activities and channelizing the fund 

collected from entrepreneur groups and other beneficiaries. For this, development of PES 

mechanism could be the best option. A Pokhara based NGO has initiated development of 

PES like scheme where various stakeholders have committed some amount on to-be-

established basket fund for BWS conservation, called as ‘Begnas Conservation Fund’. But 

lack of proper leadership and lack of binding mechanism to bind beneficiaries into the 

payment scheme would be obstacles to achieve the goal of such initiatives. So, various 

governmental agencies like DFO, DIDO, DADO, locally elected peoples’ representatives on 

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wards and Pokhara-Lekhnath Metropolitan who could act as intermediary and other 

NGOs/INGOs who have played vital role in development of PES schemes in other places 

should take a lead to establish sustainable financing mechanism for watershed conservation 

through development of PES mechanism. For this in initial stage, these stakeholders could 

form a ‘Begnas Watershed PES advisory and Coordination Committee’, make strategies, and 

bring upstream and downstream communities, entrepreneurs’ groups and other beneficiaries 

into the payment mechanism.  

 

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