Toward more equitable ecosystem investment programs—Adaptation and equity are central to the design and functioning of successful water funds

Projects designed to incentivize ecosystem management for societal benefits are becoming increasingly popular and are often touted as win–win solutions for social and environmental challenges. Yet, there are important concerns about the equity and justice implications of these programs, and there is strong evidence that a lack of attention to justice can exacerbate or create inequities. We focus on water funds, a subset of watershed ecosystem investment programs that are being scaled globally. We specifically discuss how three long‐standing Andean programs have shifted through time toward a greater focus on equity and justice. We argue that these shifts, while imperfect, have been critical to their durability and that, more generally, continued alignment of nature‐based investment programs with broader equity and justice concerns is essential for long‐term durability and success.

to people.Overarching names for the idea that the benefits of nature to people can be managed include ecosystem services, nature's contributions to people, green infrastructure, and Nature-Based Solutions (Cassin et al., 2021;IPBES, 2019;Salzman et al., 2018).A broad subset of these ecosystem investment programs are conceptualized as voluntary, encouraging participation of upstream actors through some combination of cash and in-kind support.The projects may be called Conservation Incentives, Payments for Ecosystem Services, Investments in Watershed Services, or Water Funds depending on how the programs are structured (Bremer, Auerbach, et al., 2016;Muradian et al., 2010).This voluntary and transactional model has made this group of programs an appealing conservation alternative to long-established approaches such as purchasing land or relying on regulatory conservation approaches.One general goal is to mobilize monetary and other resources where they are more abundant-in cities, or in some cases agricultural areas-and use those resources to finance activities ranging from reforestation to improved farm management in source regions (Salzman et al., 2018).The programs have been embraced by large conservation organizations, development banks, and others as having the potential to simultaneously address both social and environmental goals (Abell et al., 2017;Muradian et al., 2013).
Reflecting the empirical impact of many programs in practice, some political ecology research, in particular, has critiqued some ecosystem investment programs as increasing inequities within communities (Rodríguez- de-Francisco & Boelens, 2016), inadequately accounting for and compensating upstream labor (Berbés-Blázquez et al., 2016), and failing to adequately involve participating communities and their values in program design (Joslin, 2020a).In addition to exacerbating social inequity, inadequate or inappropriate participation in program design and implementation has been shown to decrease participation, with implications for program effectiveness (Brownson et al., 2019).
Ecosystem investment programs, however, are not static.For example, Shapiro-Garza (2013) demonstrated how equity and justice concerns re-shaped the design of Mexico's national Payment for Hydrological Services program, and recent work has demonstrated how historical, political, and social contexts shape program design and outcomes across many other geographies (Nelson et al., 2020;Shapiro-Garza, 2013;Shapiro-Garza et al., 2020).While some ecosystem investment theorists have argued for separating social equity and environmental effectiveness goals (Engel et al., 2008), empirical evidence suggests these programs are unlikely to function well, meaning that neither type of goal is achieved, if participants do not feel they are benefitting in an equitable way (Corbera & Pascual, 2012;Pascual et al., 2014).As ecosystem investment programs create new social and political contexts by creating or shifting the nature of relations within upstream and downstream communities and between the two, there are important questions about the equity and justice implications of these shifts (Joslin, 2020b;Meza Prado et al., 2021).For example, in the context of water funds, Kauffman (2013) described how justice concerns drove the re-shaping of program creation and design by Indigenous community leaders in Tungurahua, Ecuador, and Nelson et al. (2020) and Joslin (2020aJoslin ( , 2020b) ) describe the complex political-ecological contexts of these programs.
We focus on ecosystem investment programs focused primarily on water and with a water fund financial and governance model (Bremer, Auerbach, et al., 2016).A subset of these programs are mature, with one over 20 years old, and their shared general governance and financial structure makes them reasonably comparable and therefore good candidates from which to draw lessons.There are also concerted efforts to scale these programs across different social, biophysical, and political contexts (Abell et al., 2017).However, there has been little attention to how long-standing water funds have responded and adapted to justice concerns through time.
Here, we consider how program durability and equity interact and support one another based on long-term engagement with three water funds in the Andes: Fondo Para La Protección del Agua (Fund for the Protection of Water; FONAG; Quito, Ecuador), Fondo Agua por La Vida y la Sostenibilidad (Water for Life and Sustainability; APLV; Cauca Valley, Colombia), 1 and Aquafondo (Lima, Perú).The first two funds are among the most established in Latin America, founded in 2000 and 2009, and widely looked to as models of success.Aquafondo, established in 2010, has faced a series of financial and political challenges that slowed its development (Bremer, Auerbach, et al., 2016).In addition to long-term engagement (including one co-author, M. Echavarría, who helped to start all three programs), we carried out semistructured interviews with program managers and board members to reflect on and distill important emerging lessons of water funds over time (Brauman et al., 2022;Bremer et al., 2020).In two of the programs, Aquafondo and APLV, we also engaged with community participants' perspectives on programs through interviews (Game et al., 2017;Meza Prado et al., 2021;Nelson et al., 2020) or a social impact assessment process (Bremer, Gammie, et al., 2016).Although our 1 Fondo Agua por La Vida y La Sostenibilidad was restructured as Fundación Fondo Agua por La Vida y La Sostenibilidad in 2016, shifting from a fund within the sugar industry association to a foundation.The implications of this re-structuring are not considered in this article.
previous publications have focused on specific programs at specific points in time, this perspective piece is based on our reflections on our work with the three programs over time.We argue that the shifts these programs have undergone as they have matured, while imperfect, have been critical to their durability, in part because continued alignment with broader equity and justice concerns is essential to long-term durability and success.

REPRESENTATION-LOCAL INSIGHT AND LOCAL CHAMPIONS ARE KEY
Successful water funds require participation, not just for the mobilization of financial resources, but for every aspect of the programs.Whether or not local communities participate in programs critically depends on how much trust there is in the institutions and people running the programs, not only on an assessment of incentives.One element of trust is based on whether communities feel represented in program design (i.e., procedural and recognitional equity) as opposed to feeling that the programs are imposed from the outside.Our engagement with water funds strongly supports previous research demonstrating that local champions and social networks facilitate collective action (Ostrom, 2009); we heard repeatedly that water funds will only be successful when they work to support communities and land managers who have already or are in the process of organizing to protect their own resources.The most successful water funds have nurtured long-term relationships with local champions, communities, and intermediaries, and their work is responsive to local needs, both creating watershed-scale collective action and strengthening collective action initiatives by local communities and local organizations.
APLV in the Cauca Valley, Colombia, does most of its work through local river user associations, many of which are led by women, some of whom have worked with their organizations for nearly 20 years, since long before the creation of the water fund itself (Meza Prado et al., 2021;Nelson et al., 2020).The director of one river user association, for example, describes beginning to work with APLV as challenging, given the communities' long history of distrust of agroindustry as well as the ongoing armed conflict in Colombia.Slowly, as this director stayed in the area and continued to work with communities, she established relationships and built trust in the river user association.A few watersheds down, several Indigenous communities resisted working with APLV and the river user associations because of long histories of oppression and paternalistic development policies.Only once it was clear to them that the water fund, through the river user association, was willing to invest in building reciprocal relationships were collaborations established.Having local voices as empowered decision-makers in the river user associations and APLV will be key to the resilience of APLV as structural changes and political unrest continue.

RECOGNITION-SUCCESSFUL PROJECTS REFLECT PARTICIPANTS' VALUES
Though much of the academic and promotional literature for water funds focuses on the transactional benefits of clean water for downstream participants and compensation to upstream participants, the motivations of different actors to support, fund, and participate in these projects are much more varied (Kauffman, 2013;Meza Prado et al., 2021;Santos et al., 2019).Programs that are responsive to the diversity of these values and motivations (i.e., distributional and recognitional equity), from biodiversity conservation to social responsibility, are more resilient as their context changes over time.Relational framings of watershed investment projects, such as those put forward by projects such as Watershared in Bolivia (Grillos et al., 2019) and Merese in Péru (Quintero & Pareja, 2015), reflect this need to incorporate participants' values.
APLV, in Cauca Valley, Colombia, demonstrates the way multiple values motivate watershed protection and thereby encourage participation through time.Conversations with upstream participants suggest that few of the participants were motivated only by material gains; rather, participants were primarily interested in protecting nature for its ecological and cultural value (Meza Prado et al., 2021).For several Indigenous communities interviewed, a key factor influencing their decision to participate was their ability to define their own goals and defend and manage their land in a way consistent with their worldview.Another river user association is the only outside group one Indigenous community has decided to work with, specifically because the river user association has worked with the community for a long time and has, in the words of the community president, "aimed to achieve goals defined by the community themselves."Thus, while the most visible story of APLV is one consistent with upstream-downstream transactions, the reality on the ground is that program durability requires incorporation of the values and goals of participants (Nelson et al., 2020).
Successful water funds have embraced projects with local communities, starting from the needs expressed by communities, even when these projects fall outside of the conventional purview of watershed investment projects.FONAG, in Quito, Ecuador, for example, has shifted its approach to better meet community goals, including through working to improve access to potable water.This shift reflects the reality that many high Andean communities, the stewards of Quito's water sources, do not have a reliable and safe water source themselves.Water access projects are out of the traditional purview of water funds but are part of a broader reframing of FONAG's work as social hydrology, rather than just hydrology.To make this change, the water fund has hired staff with social science and water justice expertise to work with communities both upstream and in marginalized urban areas.FONAG's park guard program also demonstrates the potential for the program to listen to and learn from community members who deeply know the lands and people that water funds aim to influence.Over time, FONAG successfully learned from past challenges where long histories of distrust between rural communities and the water company prevented successful collaboration.Beyond just identifying alignment between water fund goals and community goals, FONAG has adjusted its own approach in order to be more effective in the long term.

PROCEDURE-ACTIVE COMMUNITY ENGAGEMENT CHANGES THE PROGRAMS THEMSELVES
Our experience suggests that the most durable water fund investments are made with, and not to, communities and other landowners.Processes that truly integrate participation of local land managers and communities are able to leverage intergenerational knowledge of land and water (i.e., procedural and recognitional equity).This knowledge often makes it possible to create management plans that reflect the values and desired futures of communities and land managers while also achieving water benefits for downstream water users.
Prior to the establishment of APLV, in Colombia, the local agroindustry sought to ensure its water resources by purchasing land.However, it quickly became clear that this strategy would intensify social conflict.APLV found that a more effective and durable strategy was to focus on developing alternative livelihoods with local communities and find opportunities to carry out source watershed protection activities that aligned with local goals and values.
For Aquafondo, in Lima, Peru, an initial pilot project represents a promising example of community collaboration.In this case, another NGO had worked with the community to restore pre-Incan infiltration channels, called amunas, which are not strictly natural but hybrid natural and built infrastructure.The community wanted to work with Aquafondo to continue channel restoration and also to protect the highlands for their own water supply (Bremer, Gammie, et al., 2016).One publication (Ochoa-Tocachi et al., 2019) that resulted from the project received substantial recognition, reinforcing the importance of learning from communities and the potential role of ancestral technologies in water security.Ancestral technologies also include specific approaches to constructing small reservoirs, wetlands, and terraces and even encompass organizational methods, like mingas, or group work.

EQUITABLE WATER FUNDS ARE BUILT ON LONG-TERM RELATIONSHIPS, WHICH RELY ON STABLE FINANCIAL SUPPORT FOR ONGOING ENGAGEMENT
Distributional, recognitional, and procedural equity in watershed investment projects are all built on long-term relationships.In every program we have worked with, consistent relationships between participants and trusted program representatives have been the backbone of adaptive, resilient, successful programs.This critical continuity of relationships and activities on the ground is only possible when funding is stable and institutional architecture and legal frameworks are robust.
FONAG, in Quito, Ecuador, for example, was established in 2000 and is considered a success in long-term operation partly because of its viable financial model, which receives a percentage of the water utilities' sales of drinking water and sewage services (2%) and an annual donation from the electric utility to the water fund.The water company's contribution was safeguarded with a Municipal ordinance that ensures that the water utility's contribution, which has generated a sizable endowment of over $USD 26.7 M as of 2022, including financial and land assets.Though the legal framework within which FONAG was created has since changed, it has been legally allowed to continue with its original governance and financial structure.
In contrast, Aquafondo, in Lima, Peru, has been unable to secure a stable funding source since its establishment in 2010 due to legal limitations and lack of political resolve on the part of the water users.However, in 2015, a new law was approved in Peru that required water companies to invest a percentage of their water rates in watershed conservation; Lima's water utility is now a potential funder.A major roadblock to the water utility's investment in Aquafondo is its limited capacity.While Aquafondo has worked successfully on several projects and helped to establish recognition and scientific validity of a number of important land management practices (Willems et al., 2021), resource limitations have caused frequent turnover of staff.Aquafondo now has been building capacity and is expanding a portfolio of practical projects.

CONCLUSION
Our engagement with three prominent Andean water funds clearly demonstrates the link between program durability and attention to equity and justice.This should not be surprising, as the importance of "heeding social goals" has been widely messaged in literature on ecosystem investment programs (Corbera & Pascual, 2012).We have found that these successful water funds have grown from reciprocal relationships between communities and the programs and that the programs themselves have grown and changed as they have incorporated participants' values and needs.In so doing, these programs are working toward not only providing more equitable compensation (distributional equity), but also bringing communities and other land managers to the decision-making table (procedural equity) and centering their worldviews and values in program design and implementation (recognitional equity).This finding is consistent with reviews of ecosystem investment programs, which have pointed to the importance of community participation in program design and implementation in facilitating sustained enrollment and positive social and environmental outcomes (Brownson et al., 2019;Lliso et al. 2022).However, our findings highlight the potential for programs to learn and shift through time, which has received less attention in the ecosystem investment literature.Program evolution does not come without cost, however (Kang et al., 2023).Successful projects financially support the active, on-the-ground engagement of individuals who have come to be trusted and identify and actively engage with existing social networks and community organizations.Water funds have been widely promoted by large conservation organizations, development banks, and others (Abell et al., 2017); on the ground, their establishment and durability rely fundamentally on people participating over the long haul.Evaluations of where water funds are likely to "work" should account for the leaders and community networks that can facilitate participation.This, in turn, requires financial and human investment.
As with any conservation or water program, including the wider range of payment for ecosystem services programs and nature-based solutions, water funds operate in a range of environmental, historical, socioeconomic, cultural, and political contexts, all of which change through time (Nelson et al., 2020).On top of continuing shifting contexts, climate change is and will continue to exacerbate this.To be durable over time, water funds need to be flexible, resilient, and adaptive.While there has been both celebration and critique of water funds, more attention is needed to the way these programs adapt through time in response to changing conditions.Ultimately, water fund durability rests in the relationships these programs support, among and between upstream and downstream actors and communities; nurturing these relationships over time and creating structures to facilitate real engagement with legitimate concerns of different actors are critical to their equity and success, which are inherently linked.

A C K N O W L E D G M E N T S
We are deeply grateful to the staff, board members, and participants in the FONAG, AquaFondo, and Fundación Fondo Agua por La Vida y La Sostenibilidad programs.Their work and insight over the years have been invaluable and made this contribution possible.We thank Sara Nelson and Kelly Meza-Prado for their collaboration in many components of this work.This research was supported by the Belmont Forum project ClimateWise (NSF: 1624329).This is contributed paper CP-2024-02 of the Water Resources Research Center at the University of Hawaiʻi at Mānoa.

D ATA AVA I L A B I L I T Y S TAT E M E N T
The data that support the findings of this study are available from the corresponding author upon reasonable request.