Posted on November, 01 2004

Water drips from the fronds of the ferns; mist fills the air; the loamy soil is slippery. This is the cloud forest of the Sierra de las Minas Biosphere Reserve, home to the quetzal — Guatemala’s highly revered, yet highly threatened, national bird. 

“I've seen quetzals there before,” says the reserve’s Director Caesar Tot, pointing to a massive oak tree through the mist. “But we won't be seeing the shy birds today, they are hiding from the rain.” 

Even in good weather, the quetzal (Pharomachrus mocino) is becoming an increasingly rare sight. Its natural habitat is being destroyed by logging, cattle ranching, forest fires, and agricultural expansion. If nothing is done to protect the species, it could soon be heading for extinction; left to spread its wings only on Guatemala’s currency, the Quetzal. 
 
A protected biosphere reserve since 1990, Sierra de las Minas is the largest-remaining habitat of the Mayan Indian’s revered “bird of paradise”. It is also one of the largest unbroken extents of cloud forest in Mesoamerica, covering around 1,300km², of which some 65 per cent is primary forest. In addition to the quetzal, hundreds of other bird, mammal, amphibian, and reptile species live here, including the endangered tapir, howler monkey, jaguar, and Harpy eagle. 
 
“This forest is home to the most diverse range of species in Central America,” says Tot, a native Q’eqchi Indian who grew up in the region. “It houses more than three-quarters of all flora and fauna found in Guatemala and Belize, much of which is endemic.” 
 
But it is not only plants and animals that depend on the cloud forest for their survival — so do the people who live on the foothills of the mountain chain. 
 
Located in one of the driest regions of Central America, the Motagua Valley, these people’s very existence depends on the water flowing from more than 30 streams arising in the cloud forest. Half a million people — most of whom are small farmers — compete with large industrial water users, such as Del Monte, Pepsi and Coke, for this scarce natural resource. But, not without consequences. The Motagua Valley watershed carries less and less water each year; the water table sinks lower and lower. 
 
Too many forest fires
Experts believe one reason for the dwindling water supply is overexploitation of water by companies and communities in the area. However, the root of the problem is a lot deeper — or higher. Even the streams that cascade untouched from the mountains carry less water each year. Many blame the indiscriminate use of slash-and-burn farming techniques that are clearing the forest at a rapid pace. 
 
“Less forest means less water,” says Oscar Nuñez, Director of Defensores de la Naturaleza, a national environmental organization that manages the Sierra de las Minas Biosphere Reserve. “The exposed soil cannot retain the rainwater...pressure on the reserve is increasing.” 
 
Such pressure can be seen by the great number of people who, day in and day out, carry firewood to their villages situated lower down the slopes. Women carry huge branches; men carry bundles of firewood on their backs; even children drag home as much wood as they can. And every day, the villagers have to climb a little higher to find wood. It’s a depressing sight for Oscar Nuñez. But, the wood-carrying caravans are not his greatest worry. 
  
“What's worse are the forest fires that people light on purpose to make new areas for planting and grazing,” he says. “The fire-ravaged expanses of former forest where farmers proceed to plant corn and coffee are already exhausted five years later.” 
 
Money flowing upstream
Prompted by the close connection between dwindling forest and dwindling water resources, Nuñez had the idea of establishing a link between water usage downstream and protection of the cloud forest upstream. This resulted in a joint Defensores de la Naturaleza–WWF Central America partnership to create a water fund — where, in return for using water, downstream companies and communities can make voluntary contributions to finance forest protection upstream. 
 
“Once money flows upstream, enough water will flow downstream,” says Melissa Edwards, former Freshwater Programme Officer at WWF Central America. 
 
The idea has received support from the global reinsurer Swiss Re, who in 2003 awarded the project its US$70,000 ReSource Award for sustainable watershed management. 
 
Counting on people's own interests 
 A number of municipalities have already shown interest in supporting the water fund, including the mayor of San Augustin Acasaguastlán, who is responsible for 22 neighbouring villages. 
 
“We would like to work with Defensores de la Naturaleza,” says the mayor. “With their help, we can find a solution to our own problems. This is why we are willing to contribute to the water fund.” 
 
Besides the communities, there are hopes that the major water consumers — industry and businesses in the Motagua Valley — will get involved in the project. The chances of their involvement look extremely good because their key resource, water, is becoming an increasingly scarce commodity. The large paper factory, PAINSA, for example, has expressed its interest. 
 
“Water accounts for 99.5 per cent of the raw material used in the manufacture of paper,” says plant director Rommel Najera. “However, towards the end of the dry season in April, the Motagua River is often so parched that we have to switch off one or two of our three machines.” 
 
Sometimes the situation is even worse.

“In 1998, we had to actually bring production to a complete halt for a number of days because there was no more water; the river had simply dried up,” says Najera. 
 
“Factory managers such as Najera are very much aware of the importance of water,” says Edwards. “They understand how important it is to do something. But not all companies can warm to the idea of having to pay for the water they have always drawn for free from the river or water table.” 
 
Defensores de la Naturaleza and WWF are in the process of providing an incentive to these companies to participate in the water fund. They are to benefit from the services of the National Cleaner Production Centre of Guatemala (NCPCG), which advises companies on how to manufacture their goods more efficiently, ecologically, and, ultimately, more cheaply. A portion of the money saved will flow into the water fund. 
 
Better living conditions
One of the potential beneficiaries of the water fund is Carlos Alvarez. This old mestizo lives in Albores, a village located in the centre of Sierra de las Minas. He nods thoughtfully in response to the question as to whether he would be willing to help preserve the forest. Like most farmers in Albores, he is ready to do his part. 
 
“That is if someone helps us and pays for the additional work involved,” he quips. 
 
Projects financed by the water fund, such as the production of environmentally friendly organic coffee, could represent an urgently needed source of income for farmers, who nowadays can barely scratch a living from coffee as its price has plummeted on the international market. 
 
Defensores de la Naturaleza is also identifying alternatives to exploiting the cloud forest. For example, the organization is advising farmers to switch to a more environmentally friendly method of cultivation known as ‘agroforestry’, which combines sustainable forestry with agricultural practices. 
 
“We show the farmers that they can exist, and even earn a better living, without having to burn parts of the forest to the ground,” says Nuñez. “This is the best way to protect the forest.” 
 
Using the proceeds from the water fund, conservationists want to compensate farmers for planting trees and train them how to fight forest fires. 
 
All the measures to be financed by the water fund have one thing in common — they not only protect the cloud forest, but also offer its inhabitants a source of additional income. This is sorely needed as the fate of the cloud forest and its wildlife is intrinsically linked with the well-being of those living in the region. The quetzal bird can only survive once the villagers have a few more Quetzal notes in their pockets — and thanks to the water fund, both these prospects look better. 

* Urs Dräger is a freelance writer based in Switzerland.

Further information: 

Sierra de las Minas Biosphere Reserve
Located in southeast Guatemala, the Sierra de las Minas Biosphere Reserve was designated a UNESCO-MAB Biosphere Reserve in 1992. Protection of the area is particularly important because it contains an estimated 60 per cent of Guatemala’s remaining cloud forest. Because of its geographic isolation and wide range of elevation, the reserve is home to at least 885 species of birds, mammals, amphibians and reptiles. More than 17 distinct species of evergreen forest are endemic to the area. The area is also considered an irreplaceable seed resource for reforestation and agroforestry throughout the tropics. The reserve’s managers are engaged in environmental education for local community leaders, many of who are Q’eqchi Maya. The goal is to discourage ongoing encroachment into the forest and to establish sustainable agricultural activities instead. 
  
The Water Fund
The water fund is financed via contributions from water users and by interest income earned by a US$5 million trust fund set up several major international donor organizations, including the World Bank. The water fund is managed by a foundation comprising a maximum of seven members, and includes representatives of the biggest user groups – industry, agriculture, hydroelectric plants, and local authorities, as well as environmental organizations, such as Defensores de la Naturaleza. 

Contact information:
Carlos Morales, Freshwater Programme Officer
WWF Central America
Tel: +502 2367 0480
E-mail: cmorales@wwfca.org