Latin America & Caribbean Region 76886 Environment & Water Resources Occasional Paper Series Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Addressing Key Environmental Challenges © 2013 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The Environment and Water Resources Occasional Paper Series was developed under the direction of Karin Kemper, Sector Manager for Environment and Water Resources in the Latin America and Caribbean Region (LCSEN) of the World Bank. The publications in this Series were designed and produced by GRC Direct under the supervision of Emilia Battaglini and Rachel Pasternack (LCSEN). A list of the most recent papers is on the back cover of this publication. For electronic copies of all our LAC Environment & Water Resources Occasional Papers please visit our website: www.worldbank.org/lac Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. All images courtesy of Thinkstock/Getty Images and The World Bank Environment and Water Resources LCSEN Occasional Paper Series Foreword The Latin America and Caribbean (LAC) region has seek to bring to a broader public – decision makers, a unique mix of qualities and challenges when development practitioners, academics and other it comes to the environment. It is exceptionally partners - lessons learned from World Bank- endowed with natural assets, with globally financed projects, technical assistance and other significant biodiversity and valuable crops, and knowledge activities jointly undertaken with our also harbors the world’s greatest carbon sink in partners. The series addresses issues relevant to the the Amazon. At the same time, however, the region region’s environmental sustainability agenda from registers the highest rates of urbanization in the water resources management to environmental developing world with pollution, overuse of its water health, natural resource management, biodiversity and natural resources and detrimental impacts on conservation, environmental policy, pollution the health of people, especially the poor, and the management, environmental institutions and environment. governance, ecosystem services, environmental financing, irrigation and climate change and their Over the past twenty years, the LAC region has linkages to development and growth. made impressive gains in tackling these issues. It leads the developing world in biodiversity In this particular paper, we present to you the case conservation and natural resource management of Lake Cocibolca in Nicaragua, an increasingly and is at the forefront in reducing urban pollution. important source of water supply for the country The World Bank has often been the partner of and a global biodiversity hotspot. The lake is under choice for those countries in the region that have significant pressure from a variety of sources. The had the initiative to pioneer innovative policies for paper shows the results of the hydrological and environmental protection and natural resource land use model (SWAT) that was used to assess management, strengthen institutions responsible these pressures, estimating the sedimentation for environmental management, enhance levels in the watershed and identifying erosion environmental sustainability, and introduce new hotspots, thus filling an important knowledge approaches to water resources management. Such gap by building a more comprehensive picture initiatives include fuel and air quality standards of the sources of contamination. The technical in Peru, carbon emission reduction in Mexico, training and the sharing of regional experiences payment for ecosystem services in Costa Rica, with Colombia and Costa Rica, conducted in the participatory and integrated water resources course of this study, have demonstrated how using management in Brazil, and new approaches to hydrological modeling tools such as the SWAT can irrigation management in Mexico. generate guidance for identifying critical areas and can help set priorities in watershed action plans, In this context, it is our pleasure to introduce the including possible policy and investment solutions. Environment & Water Resources Occasional Paper Series, a publication of the Environment and We hope that this paper, just as the entire series, Water Resources Unit (LCSEN) of the Sustainable will make a contribution to knowledge sharing Development Department in the World Bank’s Latin within the LAC Region and globally. America and the Caribbean Region. The purpose of the series is to contribute to the global knowledge Karin Kemper exchange on innovation in environmental and Sector Manager, Environment & Water Resources water resources management and the pursuit of Sustainable Development Department greener and more inclusive growth. The papers Latin America and the Caribbean Region Table of Contents Acronyms and Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Abstract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 I. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 II. Deterioration of the Watershed and Sources of Contamination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 III. Modeling Pressures on Lake Cocibolca: Results of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 IV. Setting Research Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 V. Setting Policy and Investment Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 VI. Conclusions and Policy Implications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Annex A. Technical Description of the SWAT Modeling of the Lake Cocibolca Watershed. . . . . . . . . . . . 71 Annex B. Estimation of Nutrient Load from Tilapia Farming in Lake Cocibolca. . . . . . . . . . . . . . . . . . . . . 87 Annex C. Additional Figures and Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Tables Table ES.1. Overall Nutrient Flows into Lake Cocibolca. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Table II.1. Proportion of Farms Without Land Title by Region and Type of Farm. . . . . . . . . . . . . . . . . . . . . 28 Table III.1. Estimated Nutrient Flows into the Lake from Domestic Wastewater Discharge in Coastal Towns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Table III.2. Estimated Mean Annual Nutrient Flows to Lake Cocibolca, by Source. . . . . . . . . . . . . . . . . . . . 41 Table III.3. Estimated Mean Annual Nutrient Flows into Lake Cocibolca by Country. . . . . . . . . . . . . . . . . . 43 Table III.4. Potential Reductions in Sediment and Nutrient Loads to the Lake Cocibolca Under Alternative Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Table IV.1. Key Technical Findings of the Study, the Extent of Certainty and Future Research. . . . . . . . . . 50 Table V.1. Principal Water Users in Selected Sub-Watersheds of the Lake Cocibolca Watershed . . . . . . 58 Table V.2. Institutional Profile of Water Resources Management in Nicaragua . . . . . . . . . . . . . . . . . . . . . 64 Table A.1. SWAT Input Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Table A.2. Land Use Areas Per Class in Nicaragua’s and Costa Rica’s Sub-basins (%) . . . . . . . . . . . . . . . 75 Table A.3. Land Use Areas Per Class in Costa Rica’s Sub-basins (%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Table A.4. Slope Profile by Sub-basin as Percentage of Total Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Table A.5. Changes Relative to the Baseline for the Pacific Cell. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Table A.6. Selected Climate Change Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Table A.7. Statistical Indicators of Model Performance in Two Sub-basins. . . . . . . . . . . . . . . . . . . . . . . . . 87 Table B.1. Estimate of the Net load of Nutrients Released into the Lake Cocibolca Ecosystem as a Result of Tilapia Farming in Floating Cages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Table C.1. Ranking of Sub-basins by Sediment and Nutrient Loads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Table C.2. Sediment and Nutrient Loads from Non-point Sources Flowing into Lake Cocibolca . . . . . . . . 92 Figures Figure ES.1. Pollution from Sediment and Nutrients, Coastal Towns and Tilapia Farming. . . . . . . . . . . . . . . . 5 Figure ES.2. Range of Policies and Investments to Reduce Pressures on the Watershed. . . . . . . . . . . . . . . . 9 Figure I.1. The San Juan River Basin and Lake Cocibolca Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 i Figure II.1. Average Annual Precipitation in the Lake Cocibolca Watershed (1975–1994). . . . . . . . . . . . . 19 Figure II.2. Topography of the Lake Cocibolca Watershed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Figure II.3. The San Juan River is the Lake’s Only Outlet to the Sea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Figure II.4. Sources of Environmental Degradation in the Watershed and its Impacts . . . . . . . . . . . . . . . . 25 Figure II.5. Land Use in the Lake Cocibolca Watershed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Figure II.6. Principal Sources of Municipal Wastewater Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Figure II.7. Wetlands in the Lake Cocibolca Watershed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Figure III.1. Estimating the Magnitude of Problems Affecting Lake Cocibolca. . . . . . . . . . . . . . . . . . . . . . . . 35 Figures III.2a. & III.2b. Mean Annual Soil Erosion in the Lake Cocibolca Watershed and Forest Cover . . . . . . . . . 39, 40 Figure III.3. Pollution from Sediment and Nutrients, Coastal Towns and Tilapia Farming. . . . . . . . . . . . . . .42 Figure III.4. Estimated Impacts of Climate Change on Flows into Lake Cocibolca. . . . . . . . . . . . . . . . . . . . . 46 Figure V.1. A Range of Solutions to Reduce Pressure on the Watershed . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Figure V.2. Land Uses in the Watersheds that Contribute the Most Sediments and Nutrients to Lake Cocibolca . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Figure V.3. Possible Patterns of Returns to Farmers From Adopting Land Uses that Protect Lake Cocibolca. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Figure V.4. Extreme Poverty Rates in the Lake Cocibolca Watershed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Figure A.1. Actual Rainfall Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Figure A.2. Pseudo Weather Stations for Precipitation Used in SWAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Figure A.3. Location of Weather Generator Stations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Figure A.4. Simulated Average Monthly Precipitation per Sub-basin (in millimeters per month) . . . . . . . . 81 Figure A.5. Precipitation and Temperature Changes for the Pacific Cell. . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Figure A.6. Precipitation and Temperature Changes for the Atlantic Cell . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Figure A.7. Location of Mayales and Oyate/Dolores Sub-basins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Figure A.8. Monthly Flow and Precipitation in Mayales Sub-basin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Figure A.9. Monthly Flow and Precipitation in Oyate/Dolores Sub-basin . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Figure C.1. Indicative Ranking of Sub-watersheds by Sediment and Nutrient Load Rates . . . . . . 93, 94, 95 Figure C.2. Protected Areas in Nicaragua. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96 Figure C.3. Overlay of Erosion Hotspots, Protected Areas and PES Areas in Costa Rica . . . . . . . . . . . . . . . 97 Figure C.4. Mean Annual Sediment Loads Carried by Streams in the Lake Cocibolca Watershed. . . . . . . 98 Boxes Box ES.1. Consultations in Nicaragua and Training for Technical Experts . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Box ES.2. Re-running the SWAT Model in the Climate Change Scenario. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Box I.1. Preparation of the Strategic Action Program (SAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Box II.1. Tilapia Farming can Pose Risks to the Lake’s Biodiversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Box III.1. The Soil and Water Assessment Tool (SWAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Box V.1. Protecting Santa Lucía’s Water Source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Box V.2. High Multiplier Effects and Potential Benefits to Poor from the Tourism Sector . . . . . . . . . . . . 61 Box V.3. Public Disclosure can be an Effective way to Strengthen Compliance. . . . . . . . . . . . . . . . . . . . 62 Box VI.1. Project Profiles Defined in the 2004 Strategic Action Program. . . . . . . . . . . . . . . . . . . . . . . . . . 65 ii Acronyms and Abbreviations AAA: Analytic and Advisory Activity AdPesca: Nicaraguan National Fisheries and Aquaculture Administration (Administración Nacional de Pesca y Acuicultura) AMUGRAN: Association of Municipalities of the Basin of the Great Lake of Nicaragua (Asociación de Muni- cipios de la Cuenca del Gran Lago) ANA: National Water Authority (Autoridad Nacional del Agua) ARS: Agricultural Research Service BNPP: Bank Netherlands Partnership Program BOD: Biological Oxygen Demand CASUR: Compañía Azucarera del Sur, S.A. CIEMA: Center for Environmental Research and Studies (Centro de Investigación y Estudios del Medio Ambiente) CIRA: Center for Water Resources Research (Centro para Investigación de los Recursos Acuáticos) EIA: Environmental Impact Assessment ENACAL: Nicaraguan Water Supply and Sanitary Sewage Company (Empresa Nicaragüense de Acueductos y Alcantarillados Sanitarios) FAO: Food and Agriculture Organization of the United Nations FISE: Emergency Social Investment Fund (Fondo de Inversión Social de Emergencia) FY: Fiscal Year GCM: Global Circulation Model GEF: Global Environmental Facility GoN: Government of Nicaragua ha: hectare IFPRI: International Food Policy Research Institute INAA: Nicaraguan Water Supply and Sewage Institute (Instituto Nicaragüense de Acueductos y Alcantaril- lados) INETER: Nicaraguan Institute for Land Research (Instituto Nicaragüense de Estudios Territoriales) INTA: Nicaraguan Institute for Agricultural Technology (Instituto Nicaragüense de Tecnología Agropecuaria) IPM: Integrated Pest Management IVL: Swedish Environmental Research Institute (Svenska Miljöinstitutet) km: kilometer iii km2: kilometer square l: liter LSMS: Living Standards Measurement Survey m3: cubic meter m3/s: cubic meter per second MAGFOR: Ministry of Agriculture, Livestock and Forestry (Ministerio Agropecuario y Forestal) MARENA: Ministry of Environment and Natural Resources (Ministerio del Ambiente y Recursos Naturales) µg: microgram MINAE: Ministry of Environment and Energy of Costa Rica (Ministerio de Ambiente y Energía) MINSA: Ministry of Health (Ministerio de Salud) mm: millimeters μg/l: microgram per liter mg/l: milligram per liter MPN: Most probable number N: Nitrogen NGO: Nongovernmental organization No.: Number NRCS: Natural Resources Conservation Service OAS: Organization of American States P: Phosphorus PASOLAC: Program for Sustainable Hillside Agriculture in Central America (Programa para la Agricultura Sostenible en Laderas de América Central) PES: Payments for Environmental Services SAP: Strategic Action Program SWAT: Soil and Water Assessment Tool TA: Technical Assistance TEDS: Transboundary Environmental Diagnostic Study UNAN: National Autonomous University of Nicaragua (Universidad Nacional Autónoma de Nicaragua) UNEP: United Nations Environment Programme US EPA: United States Environmental Protection Agency USDA: United States Department of Agriculture iv Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Addressing Key Environmental Challenges Irina Klytchnikova, Senior Economist, World Bank Rita Cestti, Senior Rural Development Specialist, World Bank Stefano Pagiola, Senior Environmental Economist, World Bank Allan Jones, Consultant, World Bank Raghavan Srinivasan, Consultant, World Bank Patrick Debels, Consultant, World Bank Jorge Escurra, Consultant, World Bank Augusto García, Operations Officer, World Bank Francisco Carranza, Consultant, World Bank Nelson Medina, Water and Sanitation Specialist, World Bank Acknowledgements This study was prepared with inputs from Ruth PRI), Willem Janssen (Lead Agriculturalist, LCSAR), Tiffer Sotomayor, Juan Carlos Valle, Carolina Ruiz Coleen Littlejohn (Sr. Operations Officer, LCCNI), Bojorge, and Juan Carlos Martínez Sánchez (Con- David Michaud (Water and Sanitation Specialist, sultants); Irene Leino (Junior Professional Officer) LCSUW), and outstanding assistance by Santiago and Sarah Martiny (Junior Professional Associate); Sandoval (LCSEN) and Linda Castillo (LCCNI) are and with inputs from the Technical Working Group gratefully acknowledged. The study was carried composed of Nicaraguan Government agencies. out under the overall guidance of Laura Frigenti Valuable comments by Juan Carlos Belaustegui- (Country Director), Karin Kemper (Sector Manager goitia (Lead Environmental Economist, LCSEN), since December 2009), Laura Tlaiye (Sector Man- Ernesto Sánchez Triana (Lead Environmental Spe- ager until November 2009), Gregor Wolf (Sector cialist, SASDI), Susanne Scheierling (Sr. Irrigation Leader), Joseph Owen (Country Manager), and the Water Economist, ETWWA), Julia Bucknall (Sector guidance of the Steering Committee for the study, Manger, ETWWA), Grant Milne (Sr. Water Resourc- composed of high-level decision makers in Nicara- es Specialist), Paula Novo (Visiting Researcher, IF- gua. The authors of the study are especially grate- ful for the guidance and support of the Minister of v Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) MARENA Juanita Argeñal Sandoval, Vice Minister by the members of the Technical Working Group for of MARENA Roberto Araquistáin, the Director of this study. Financial support by the Governments Planning of MARENA Denis Fuentes, the focal point of the Netherlands through the Bank Netherlands for the study in MARENA Engracia Merlo, the Min- Partnership Program (BNPP) is gratefully acknowl- ister of MAGFOR Ariel Bucardo, the Vice Minister edged. of MAGFOR Amanda Lorío Arana, the former Presi- The study was completed and disseminated in Ni- dent of ENACAL Ruth Selma Herrera, the former caragua in June 2010, and published in electronic Director of INTA María Isabel Martínez, the Presi- form. The report was welcomed by MARENA, which dent of INETER Alejandro Rodríguez, the Director also provided additional comments that future of CIRA/UNAN Salvador Montenegro, the Deputy studies would need to address. This is the paper Director of CIRA/UNAN Katherine Vammen, the Di- version of the electronic publication dated June rector of CIEMA Sergio Gámez, as well as support 2010. by experts from MARENA and other institutions and vi Abstract The Lake Cocibolca watershed is a globally unique watershed and by conducting additional estimates cradle of biodiversity with major importance not of nutrients generated from wastewater sources only to the global and local environment, but also and tilapia farming. The study has confirmed that to the 750,000 people living within its boundaries. sediment loads are very high, and has estimated Several fish species are endemic to the lake, and their magnitude in each sub-watershed. The key the watershed’s location within the Mesoamerican results of the study are the estimation of sedimen- Biological Corridor has made it a meeting ground tation levels in the watershed and the identifica- for fish, bird and mammal species from North and tion of erosion hotspots. At about 13.3 tons/ha South America. Apart from its importance for fish- per year on average for the watershed, sediment ing and recreation industries, the lake is beginning yields are high and comparable to watersheds with to be used as a source of water supply for some well-documented sedimentation problems such coastal towns; its role as a source of drinking water as Lake Victoria, which is more than ten times the may grow in the future. Lake Cocibolca and its wa- size of the Lake Cocibolca watershed but has simi- tershed are under pressure from multiple sources lar elevations, rainfall patterns and deforestation but, in the absence of reliable monitoring informa- problems. The load of sediments and nutrients can tion, the extent of the environmental degradation is be greatly reduced through programs that com- unclear. Environmental deterioration in the water- bine such measures as reforestation in areas with shed is high on the government’s agenda. the steepest slopes, the adoption of conservation tillage, and improved pasture management. The This study has assessed the sources and the study also shows that climate change could signifi- magnitude of the pressures that threaten Lake cantly affect the water balance and severity of the Cocibolca. It was accomplished by applying a hy- sedimentation problem for the lake. drological and land use model (SWAT) to the lake’s vii Executive Summary Background of the Study In November 2008, consultations with the Gov- ETER, ENACAL, CIRA/UNAN, CIEMA and MINSA). As ernment of Nicaragua, academia and nongovern- an outcome of the initial technical consultations, mental stakeholders resulted in the selection of the Soil and Water Assessment Tool (SWAT), used three studies on key environmental issues for the extensively around the world to help set priorities in programmatic analytic and advisory activity (AAA) watershed management, was chosen as one of the “Republic of Nicaragua. Addressing Key Environ- best available tools for modeling the environmental mental Challenges: (i) Environmental Health in problems associated with unsustainable land use Nicaragua, (ii) Setting Policy Priorities to Reduce in the context of the Lake Cocibolca watershed. Environmental Degradation in the Lake Cocibolca This study is built on earlier efforts by other nation- Watershed, and (iii) Analysis of the Process of Envi- al and international organizations—particularly the ronmental Impact Assessment in Nicaragua.� This Procuenca San Juan and TWINLATIN projects—and report presents the findings of the second study. In its results will inform the Master Plan for the lake’s the course of the dialogue during the study’s imple- watershed, under preparation by MARENA. mentation, the government requested an addition- At different stages in the study, a combination of al Diagnostic Study of Environmental Degradation workshops and technical trainings (in Managua in Corn Island, the results of which have informed and at Texas A&M University in College Station, the design of a pilot project in Corn Island, included Texas) was carried out with sessions tailored to de- in the Nicaragua Rural Water and Sanitation Proj- cision makers and technical experts. This process ect (PRASNICA). has been successful at generating a high level of The main counterpart for this study is the Ministry interest in this AAA, addressing concerns that this of Environment and Natural Resources of Nicara- study must have a real impact on decision making gua (MARENA) but many organizations in Nicaragua and be relevant for the formulation of watershed have contributed to and helped shape the results protection plans, and to some extent helping over- of the study and the training activities that have come institutional silos. As the importance of the accompanied it. At the government’s request, this contribution of the sediment load from the Costa study was designed to provide Nicaraguan institu- Rican part of the watershed became apparent in tions with a tool to help set priorities in the man- the course of the study, technical experts from Cos- agement of this critical watershed for the country. ta Rica and Colombia were invited to participate in The study was launched in Managua in November the workshops in Nicaragua, provide guidance on 2008 with the creation of the Technical Working possible binational cooperation and seek solutions Group, composed of key government institutions at the scientific level. This version of the study in- and research institutes, and the Steering Commit- corporates comments from the Government of Ni- tee, composed of high-level decision makers head- caragua received during consultations on the draft ing those institutions (MARENA, MAGFOR, INTA, IN- report in March 2010. 1 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) The Lake Cocibolca watershed is a globally requested this study as part of the series “Republic unique cradle of biodiversity with major impor- of Nicaragua. Addressing Key Environmental Chal- tance not only to the global and local environ- lenges.� ment, but also to the 750,000 people living Lake Cocibolca and its watershed are under pres- within its boundaries. Lake Nicaragua, also known sure from multiple sources but, in the absence as Lake Cocibolca, is a major freshwater resource of reliable monitoring information, the extent of in Central America and the second largest lake in the environmental degradation is unclear. The Latin America after Lake Titicaca. With a popula- watershed has lost most of its forest cover over the tion of around 750,000, the watershed is a major last century as cattle farming has expanded, expos- area for agricultural production, is one of the main ing the watershed’s fragile volcanic soils and steep tourist attractions in Nicaragua and offers a habitat slopes to erosion. Very high sediment loads from for many species. It is the Central American equiva- these eroded soils settle in the confluence of the lent to the Galapagos as a center of formation of San Juan River and the lake, decreasing its navi- new species, in this case for a particularly valuable gability and reducing the future potential of tour- group of cichlid fishes. Ometepe Island in the mid- ism development in that area. Other environmental dle of the lake is in the process of application to be- problems stem from the use of agrochemicals, ti- come a UNESCO biosphere reserve. The watershed lapia farming, and the flows of untreated or poorly hosts three major wetlands, which were declared treated wastewater from coastal towns. The result wetlands of global significance by the 1971 Ramsar is a reduction in water quality: nutrient levels are Convention. Several fish species are endemic to rising and there is evidence of agrochemical and the lake, and the watershed’s location within the bacteriological contamination. However, the extent Mesoamerican Biological Corridor has made it a of these problems is uncertain. meeting ground for fish, bird and mammal species Environmental Deterioration in the Watershed from North and South America. Apart from its im- is High on the Government’s Agenda. There is portance for fishing and recreation industries, the a widespread perception that this important re- lake is beginning to be used as a source of water source is deteriorating and urgent action is needed supply for some coastal towns; its role as a source to save it. The main concern is eutrophication—a of drinking water may grow in the future. The Lake progressive deterioration of water quality that is Cocibolca area, including Ometepe and Solen- generally accompanied by the occurrence of algae tiname Islands, the wetlands, the colonial city of blooms, increased water turbidity and possibly an Granada and the San Juan River’s watersheds with unpleasant taste and odor. If these problems were some of the best-preserved protected areas in the to manifest themselves in the lake, future costs of country, offer unmatched opportunities to develop water treatment to make it potable would at least ecotourism projects in Nicaragua. Much of the wa- double. More systematic monitoring data are need- tershed’s population is poor and the main source ed to confirm the suspected eutrophication trend of livelihoods is extensive low-productivity agricul- in the lake, and information on the absolute and ture. Given the watershed’s cultural and economic relative importance of different sources of nutri- significance, the Nicaraguan Government and non- ent loading—unavailable until now—is needed to state actors have emphasized the need to protect design the government’s future environmental pro- the health of the lake, its watershed and the liveli- tection policies, as well as management strategies hood sources of the local communities, and have to minimize nutrient loading to the lake. It is also 2 unclear from the available data whether the lake Objectives of the Study. The main objective of this has already reached a eutrophic state and if it has study is to fill an important gap in the understand- not, how far it is from a threshold level that would ing of the problem as identified by the TEDS, and threaten wildlife and result in a serious and irre- build a more comprehensive picture of the sources versible deterioration of water quality. Neverthe- of contamination. The study achieves this by exam- less, the economic and social impacts of the water- ining the entire watershed and all pollution sourc- shed’s degradation are already being felt with the es, unlike earlier studies that focused only on parts declining navigability of the San Juan River and ef- of the watershed or on a few pollution sources. An- forts to dredge the confluence of the river with the other goal of this study is to provide an overarching lake, alleged declines in fish stocks, occasional fish framework for the investment priorities defined in kills in the lake and localized water contamination. the watershed’s SAP. The study has also aimed to A strategic vision has underpinned the efforts to facilitate the dialogue across institutions and with set broad priority actions and specific policy and academic and civil society organizations by creat- investment priorities. The strategic vision for inte- ing a common platform for a technical discussion grated watershed management at the regional lev- centered on a modeling exercise. The technical el for the greater San Juan River watershed, which training and the sharing of regional experiences includes the Lake Cocibolca watershed, dates back with Colombia and Costa Rica, conducted in the to the 1992 Summit of the Presidents of Central course of this study, have demonstrated how using American Countries. This was followed by the Trans- hydrological modeling tools such as the Soil and boundary Environmental Diagnostic Study (TEDS) Water Assessment Tool (SWAT) can be used as a prepared in 1994 and 1996, and the preparation guide for identifying critical areas and can help set of the 2004 Strategic Action Program (SAP) for the priorities in watershed action plans. greater San Juan River watershed. The Govern- Audience. This study is intended primarily for Ni- ment of Nicaragua is currently identifying financ- caraguan experts and government agencies, as ing sources to proceed with the implementation well as their counterparts in Costa Rica and the of priority actions identified by the program. The region. The study is also intended to inform the government has developed a solid legal and policy lending program of the World Bank and other do- framework for the implementation of actions envis- nors. The improved understanding of drivers of aged in the SAP through such benchmark achieve- degradation in the watershed will facilitate the ments as the adoption of the 2001 National Water setting of policy and investment priorities in the Policy, the recent passage of the 2007 Water Law, watershed area while considering the relevant en- the creation of the Commission for the Sustainable vironmental, social and economic perspectives. Development of the Lake Cocibolca and San Juan River Watersheds in 2007, and the priority given to integrated water resources management by the The Study’s Methodology and 2009–2011 Updated National Human Develop- the Main Results ment Plan. Ensuring successful implementation of The study has assessed the sources and the the key elements of this comprehensive regulatory magnitude of the pressures that threaten Lake and policy framework is an important challenge Cocibolca. It was accomplished by applying a hy- and an urgent current priority. drological and land use model (SWAT) to the lake’s 3 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) watershed and by conducting additional estimates through programs that combine such measures of nutrients generated from wastewater sources as reforestation in areas with the steepest slopes, and tilapia farming. SWAT was applied by a team the adoption of conservation tillage, and improved of international and local experts, drawing on data pasture management. As estimated by this study, collected by local institutions throughout this study it is technically feasible to reduce sediment flows and the georeferenced database of the lake’s by over 80 percent, and to reduce the associated watershed assembled through the EU-supported flows of nitrogen and phosphorus by over 18 and TWINLATIN project in 2005–2009 (Box ES.1). 46 percent, respectively. Future socioeconomic Building on that database, the use of SWAT has fa- assessments, building on the priorities already de- cilitated an assessment of the rates of sedimenta- fined by the SAP, are needed to identify what share tion in the basin’s sub-watersheds and the flows of of that reduction is actually also economically feasi- nutrients from the watershed to the lake. The con- ble. The high sediment loads in the Lake Cocibolca clusions of the study are limited by important gaps watershed and the nutrients they carry have been in the scientific understanding of the ecological a major concern for local experts, and this study’s processes affecting the lake’s water quality, and by findings corroborate these concerns. the limited availability of monitoring data and agro- Most of the sediment (but not the nutrients) chemical application data. reaching the lake originates in the Costa Rican The study has confirmed that sediment loads are part of the watershed. The Costa Rican part of the very high, and has estimated their magnitude in watershed occupies only one-fifth of the entire wa- each sub-watershed. The key results of the study tershed (excluding the area of the lake), and much are the estimation of sedimentation levels in the wa- of the area is protected through formal protected ar- tershed and the identification of erosion hotspots. eas and payment for environmental services (PES) At about 13.3 tons/ha per year on average for the schemes. Nevertheless, this study estimates that watershed, sediment yields are high and compa- due to very high slopes and precipitation, around 74 rable to watersheds with well-documented sedi- to 84 percent of the total sediment load originates mentation problems such as Lake Victoria, which there. To help inform the prioritization of watershed is more than ten times the size of the Lake Coci- protection actions, this study has produced a rank- bolca watershed but has similar elevations, rainfall ing of the sub-watersheds in terms of the contri- patterns and deforestation problems. The load of bution of sediment, nitrogen and phosphorus from sediments and nutrients can be greatly reduced non-point sources per hectare. The Niño, Zapote Box ES.1. Consultations in Nicaragua and Training for Technical Experts Over the course of the study’s implementation from December, 2008 until March, 2010, the preliminary findings were discussed in a series of five workshops with the Steering Committee for the study, composed of high-level decision makers, and the Technical Working Group, involving technical experts from ten government agencies, the national water utility and research institutes, and other non-state actors. Four training events, including a one-week training at Texas A&M University in College Station, Texas, were conducted to demonstrate the use of the SWAT model in this study for an inter-institutional team of local experts on Geographic Information Systems and hydrological modeling. 4 and Sapoá sub-watersheds in Costa Rica, followed Another possible contamination source for Coci- by the Tule in Nicaragua, are the highest ranking bolca is through the Tipitapa River from the highly in terms of sediment loads; the Niño, Ochomogo, contaminated Lake Managua. Although Tipitapa is Tule, Zapote, and Sapoa in terms of phosphorus; not normally connected to Lake Cocibolca through and the El Dorado, Tipitapa and Ochomogo in Nica- surface flows, it sometimes becomes intercon- ragua, followed by the Niño in Costa Rica, in terms nected with Lake Cocibolca (for example, during of nitrogen (Figure ES.1). Wastewater flows from extreme weather events) and results in pollution coastal towns, tilapia cultivation in floating cages spills. The increasing frequency of hurricanes due off the shores of Ometepe Island, and livestock are to climate change could raise these risks. Lake additional sources of nutrients. navigation, so far not very developed, is another Figure ES.1. Pollution from Sediment and Nutrients, Coastal Towns and Tilapia Farming Note: The thickness of the streams represents the magnitude of the sediment load reaching the lake (thicker lines denote higher sediment loads). Nutrient rankings are based on Table C.1 in Annex C. Source: Own estimates based on SWAT simulations (for runoff and soil erosion) and based on other estimates (for the other sources). 5 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) source of pollution. If it ever materializes, construc- is a non-point source; pollution from point sources tion of the Húmedo Canal—an alternative to the is also easier to control than that from non-point Panama Canal—would pass through Lake Cocibol- sources. Possible further ecological risks to native ca and undoubtedly pose high environmental risks fish species, resulting from cultivation of an invasive that would need to be carefully assessed. Finally, species such as tilapia, have not been evaluated in a large area in the lake’s watershed is now under this study. Because data on the volume of livestock consideration for the development of large new ar- production in the watershed and the resulting nu- eas of irrigated agriculture. trient loads were not available for this study, future The study has also estimated the orders of mag- research will need to complement these results by nitude of nutrient contributions from agricul- including this additional nutrient source. ture/soil erosion, wastewater discharge and ti- Climate change increases the urgency of lapia production. These estimates clearly indicate strengthening the resilience of the watershed’s that runoff and soil erosion currently contribute ecosystems and livelihood sources. Changes in substantially more nutrients than do wastewater or the temperature and precipitation regimes result- tilapia production (Table ES.1). However, nutrients ing from climate change may cause additional from point sources, such as wastewater discharge stress to the watershed’s already vulnerable eco- and tilapia production, have different and likely systems. As revealed by the sensitivity analysis us- more severe local environmental effects than the ing the earlier results of the SWAT model, pollution nutrient runoff from agriculture/soil erosion, which from runoff and soil erosion is expected to become Table ES.1. Overall Nutrient Flows into Lake Cocibolca Total Nitrogen Total Phosphorus Nutrient Flows (tons/year) (tons/year) Non-point sources (runoff and soil erosion from land use)1/ - Nicaragua 3,102–6,090 225–535 - Costa Rica 2,185–3,461 139–287 Municipal wastewater discharge - Coastal towns 135–177 26–38 - Rest of the population 2/ 175–329 22–66 Tilapia farming - At production level in 2005 (350 tons/year) 20–40 1–12 - At production level in 2008 (1,388 tons/year) 3/ 75–155 4–48 Livestock/dairy farming n.a. n.a. Notes: 1/ It is assumed that 10–20 percent of soluble nitrogen in lateral flows and groundwater discharge into the lake. 2/ It is assumed that the 10 percent of the nutrient load generated by rest of the population in the watershed (approximately 600,000 people) reached the lake. 3/ OSPESCA 2005 (p. 57) documented plans that existed at that time to expand the production capacity to 3,000 tons per year in the medium term. Production levels for 2008 are reported by INPESCA (2009). Source: Own estimates based on SWAT simulations. For estimates of nutrient loading from tilapia farming, see Annex B. 6 Box ES.2. Re-running the SWAT Model in the Climate Change Scenario A comparison of 16 global circulation models (GCMs) shows that models agree on temperature projections, with nearly all models predicting an increase of average temperature in the range of 1°C and 3°C. However, the models disagree on the changes in average precipitation. An arithmetic average of the models’ projections, assuming that the projections of all of the GCMs are equally likely, indicates that precipitation would decline. Re-running the SWAT model for the watershed, with the assumptions of expected higher average temperatures and lower precipitation in the climate change scenario, has shown that the severity of pollution problems is much more sensitive to average precipitation than to temperature changes. Thus, an 18 percent reduction in average annual precipitation leads to decreases of more than 42 percent and 38 percent in mean annual runoff and sediment yield, respectively. However, regional climate models do not provide guidance on the expected changes in the monthly distribution of rainfall. If dry months become drier and wet months wetter, this change would have a greater impact on pollution than would average temperature and rainfall changes. Heavy rainfall during hurricanes and droughts, which are expected to become more frequent with climate change, would result in even heavier sediment and nutrient runoff. Taking all the effects into account, the vulnerability of the water- shed’s soils is likely to increase and peak pollution events are likely to become more frequent. less severe if the average precipitation falls (Box Impacts on Biodiversity. This study has not con- ES.2). However, soil erosion and the nutrient load- ducted an assessment of the effects of water pol- ing problems in the watershed are likely to be more lution on biodiversity. Nevertheless, it is clear that sensitive to extreme weather events than to aver- water and soil pollution from sediment and nutri- age changes in precipitation and temperature. Al- ent runoff, hotspots of contamination due to the though projections of the effects of climate change application of agrochemicals, runoff of wastewa- on rainfall are highly uncertain, climate change is ter from municipal sources, livestock and tilapia generally expected to intensify the water cycle and farming, and the degradation of the watershed’s increase the frequency of extreme weather events, wetlands translate into a loss of the watershed’s such as droughts, tropical storms and floods, in the remarkable biodiversity. The watershed is home to region. Therefore, it is expected that severe ero- bird habitats, including Nicaragua’s only endemic sion and landslides in areas with steep slopes are bird species, the Nicaraguan grackle (Quiscalus ni- likely to increase, especially where slopes are not caraguensis), and to breeding grounds for locally stabilized by forest cover. Although it has not been and globally important endemic and native fish and estimated, future research can use this study’s reptiles. SWAT model to identify areas at risk of landslides Caveats About the Results and their Interpreta- and severe erosion in the baseline and in the cli- tion. The results of the modeling effort have helped mate change scenarios. The rising uncertainty to assess the relative magnitude of sediment and about the long-term vulnerability of the population nutrient loads associated with runoff and soil ero- and ecosystems increases the urgency of shifting sion and to establish several policy priorities. The to a development path that combines sustainable model’s outputs have been compared to the avail- management of natural resources with strategies able monitoring data whenever possible, and the to increase the well-being of the watershed’s popu- local and international experts involved in the study lation. concur with the results of this study. Since the lim- 7 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) ited availability of monitoring and field data has in scientific understanding and investment, and prevented calibration of the model, the estimates helped place the series of investments identified by of pollution loads in this study are indicative mea- the SAP within a broader watershed-wide perspec- sures of magnitude rather than precise estimates, tive. Future efforts to reduce the environmental and this is reflected in the wide ranges surrounding and health risks in the watershed need to include those estimates. a range of measures to tackle health and environ- Only with a sustainable, integrated program of mental risks from municipal wastewater discharge, monitoring, watershed and lake modeling, and industrial water sources, agrochemicals, tilapia data management, shared among the relevant in- farming, and a series of investments and policies stitutions, will it be possible to achieve a better un- to promote sustainable land use practices and re- derstanding of the actual status of the lake’s water duce wetland degradation. quality and to confidently predict the impacts, both The need to identify win-win solutions with ben- positive and negative, of future socioeconomic, efits for the lake but also for people who live in technological and climate changes. However, few the watershed and/or whose livelihoods depend institutions have the responsibilities and capa- on the watershed’s natural resources. Public re- bilities to implement such an integrated program. sources are scarce; without greater certainty about With strengthened coordination mechanisms to fa- the severity of the economic, ecological and health cilitate inter-agency collaboration, the institutions impacts of environmental degradation in the water- that participated in this study could take on this shed, it is unclear what level of investments in miti- role. gation measures is justified. The scientific uncer- tainty about the impact of contamination on water quality, ecosystems and public health and on the Policy Recommendations resulting economic costs preclude even a rough It is possible to achieve the long-term vision of estimation of the needed investment in mitigation better livelihoods and sustainable use of natural solely on the basis of the benefits to the lake. Given resources in the Lake Cocibolca watershed. The the current state of knowledge, the policy agenda Government of Nicaragua has made important ef- for the watershed needs to advance on two fronts: forts and achieved significant progress in raising ascertaining the severity of environmental degra- public awareness of the watershed’s environmen- dation and its impacts, and identifying win-win op- tal problems, seeking solutions and implementing tions or policy changes and investments with signif- programs to improve sanitation systems and waste- icant local benefits apart from the benefits for the water treatment, promote sustainable agricultural lake. Many such options exist: treating wastewater practices and support the development of sustain- in areas where localized bacteriological contamina- able tourism. Prior to this study, a broad group of tion is so high that it poses risks to health and lim- stakeholders, including national and local-level its recreation and tourism; supporting sustainable government institutions and civil society organiza- land uses that raise agricultural productivity and tions of the watershed, identified the strategic vi- protect local water sources, while also reducing the sion and a long series of investments to implement sedimentation of the wetlands and the San Juan that vision in the watershed. This study has built River; reducing health and ecosystem risks from upon these efforts, identified the most critical gaps pesticide application in intensive agriculture; and 8 other options. The Government of Nicaragua is sup- strengthening of the institutional framework for porting the identification of these win-win options integrated water resources management in the by providing discussion forums and mechanisms to watershed, form the “enabling environment� to facilitate the active engagement of local communi- ensure successful implementation of the strategic ties in the formulation of the watershed action and agenda. of municipal environmental and zoning plans. Within this broad range of policy measures and in- Based on this study’s findings and the series of vestments to help shift to a more sustainable path, consultations held with state and non-state actors some measures are more urgent than others and in Nicaragua in the course of this study’s imple- some are very costly, but low-cost solutions and win- mentation, the required actions fall into four broad win measures that are good for the environment, areas: (i) supporting sustainable agriculture and for people’s livelihoods and for the lake’s ecology alternative livelihood sources, such as sustainable can also be found. The following general and more tourism; (ii) strengthening the protection of wet- specific technical conclusions have emerged from lands and integrating their management in broad- this study and can inform the setting of investment er-scale river basin management; (iii) investing in and policy priorities: wastewater treatment, water supply and hygiene;  Making Extensive and Intensive Agriculture and (iv) strengthening the regulatory framework for more Sustainable. Farming in extensive cattle environmental management and the enforcement and crop systems has led to the degradation of of key regulations (Figure ES.2). The strengthening the watershed’s forests and soils. The common of information provision, education, environmental practice of burning pastures to control weeds information and monitoring data, as well as the Figure ES.2. Range of Policies and Investments to Reduce Pressures on the Watershed Source of Pollution/Ecosystem Risks Extensive Farming Intensive Wastewater Degradation of Tilapia Farming (Crops and Cattle) Agriculture Discharge Wetlands Possible Solutions - Policies and Investments Continuous Investing in monitoring of water Implementing and Improving application wastewater quality in areas of integrated wetland Shifting to of agrochemicals treatment, adequate tilapia production management, sustainable by strengthening operation and and monitoring of restoration and agriculture and extension services, maintenance of potential risks to the protection plan intensive farming better labeling, existing systems, native fish species; in the watershed; systems and information, strengthening and thorough assessment of the alternative off-farm education, control regulation and assessment of wetlands’ ecological employment such as of the stocks ensuring compliance further expansion functions, and of the ecotourism etc. of outdated with pollution and alternative potential to develop agochemicals standards tilapia farming sustainable tourism methods 9 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) is especially damaging in the extensive pasture  In the long term, developing sustainable tour- systems, particularly in steeply sloped areas ism has significant potential to stimulate eco- with soils vulnerable to erosion. Switching to nomic growth and to provide alternative live- more sustainable land uses, such as silvopas- lihoods for the rural population and generate toral systems that combine animal farming and major benefits for the poor. The lake’s water- tree cultivation, requires an integrated approach shed is rich with cultural and ecological attrac- to help overcome barriers to their adoption: tions that can serve as the basis for tourism de- providing incentives to farmers to adopt such velopment. Experience in Latin America shows land uses, strengthening agricultural extension that development of the tourism sector not only services and environmental education, support- positively impacts economic growth, but also has ing improvements in infrastructure, strengthen- very high potential to benefit the poor because ing access to markets, and improving access of strong backward linkages with primary pro- to credit to allow farmers to make the up-front duction and the resulting large-scale multiplier investments that may be required for switching effects. Just as the benefits to the poor from eco- to more sustainable farming systems. Other op- tourism projects are not automatic, so are the tions for reducing the pressures on forests and benefits to the environment. The links between soils from extensive systems are a transition to the tourism sector and the environment can go more intensive agriculture and the expansion of in two directions: the ecological footprint of tour- opportunities for off-farm employment. Intensive ism through its potentially adverse effects; and agriculture—rice, sugarcane and cotton cultiva- the potential of nature-based tourism to stimu- tion in the watershed—has its own set of prob- late the local economy, generate jobs and ear- lems: pollution of water and soils with agrochem- mark financing for the management of protected icals and the impacts on farm workers’ health. areas. The government has an important role to Better education by scaling up the successful play in providing regulations and certification for experiences with the provision of agricultural ecotourism enterprises and in monitoring com- extension services, support for the adoption of pliance with environmental standards. Local integrated pest management practices, control- communities need to be active participants in ling stocks of outdated pesticides, and monitor- the development of regional and local ecotour- ing the actual application rates of the most pol- ism strategies, in order for these projects to be luting agrochemicals are important priorities in successful and beneficial for the local source of the watershed. This study has identified erosion nutrient pollution. hotspots in areas of extensive agriculture, and  Tilapia farming is a major source of nutrient hotspots of contamination with agrochemicals pollution of all other point sources. Tilapia cul- are known (although not monitored) in the wa- tivation in the lake near Ometepe Island has re- tershed, thus facilitating the setting of priority ar- ceived much public attention and is the subject eas that most urgently need to be addressed. An of heated debate. This study did not conduct an expansion of off-farm employment opportunities in-depth assessment of the environmental ef- is another way to promote a shift to a more sus- fects of tilapia production in the lake, but it is tainable pattern of land use in the watershed, clear that the environmental risks of increasing although in the short term the scope for this may tilapia production levels need to be regularly as- be limited. sessed both in terms of nutrient contamination 10 and in terms of risks to native and endemic fish ment. Important steps in this regard have taken species. It is important to continue the indepen- place. At national level, an institutional and regu- dent monitoring of possible impacts of tilapia latory framework has been worked out under the production on water quality through the afflu- new Water Law, but implementation still needs ence of nutrients from tilapia as well as its im- to be carried out. At municipal level, local ac- pacts on the native fish population, since tilapia tors are actively engaged in the process of plan- can be an invasive species. ning watershed protection actions. Making the  Weltand protection and the implementation of National Water Authority (ANA) and the Secre- management plans will have multiple benefits. tariat of the Cocibolca Watershed Commission Another source of pollution is the degradation operational, and establishing clear coordination of wetlands, which may be affected by the en- mechanisms among municipalities in the water- croachment of agriculture. According to the cal- shed, are the crucially needed institutional basis culations in this study, Los Guatuzos and other for watershed protection. Strengthening the re- wetlands could be playing a very important role in quired technical capacity at local level, together the filtration of sediment and nutrient loads from with the use of innovative approaches, may to agricultural fields and point sources of pollution, some extent help reduce the high costs of im- but technical studies are needed to ascertain plementation and regulatory enforcement and how much pollution they filter. The watershed’s enhance adaptive capacity. Such approaches wetlands undoubtedly provide other globally and may include the use of remote sensing and sat- locally important ecological and socioeconomic ellite technologies to monitor land use and water benefits such as fish hatcheries and habitats quantity, and the promotion of public access to for endemic and native species of fish, reptiles environmental information and of community- and birds. Devising strategies that place the lo- based environmental monitoring initiatives. cal communities in the driver’s seat as the stew-  Putting in place a monitoring strategy is ur- ards of conservation will help ensure that the gent. The limited available evidence suggests management plans are effective. Sustainable that contamination from nutrients carried into sources of financing for the implementation of a the lake with sediment flows is not yet severe watershed-wide wetland management plan, well in the watershed as a whole, but action now integrated in the overall plan for the manage- may help to avoid potentially irreversible conse- ment of the lake’s watershed, may include inno- quences in the future. Although it is unclear how vative approaches such as sustainable tourism, far the lake is from reaching a critical threshold creation of environmental conservation funds at which the ecosystems would be severely or ir- for wetland protection, and payment for environ- reversibly affected, the case is strong for urgent mental services (PES) mechanisms with local policy actions in order to begin shifting to a more and international funding. sustainable future development path for this  Much progress needs to occur in enhancing important watershed. As a first step, putting in the adaptive water governance in Nicaragua place a strategy of systematic hydrometeorologi- and the Lake Cocibolca watershed, including cal and water quality monitoring with clear insti- the strengthening of the institutional and regu- tutional arrangements and sources of financing latory framework for water resources manage- is an urgent priority. Since the study has found 11 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) that most of the runoff, sediments and some nu- watershed into the core development agenda, with trients originate from the Costa Rican part of the a focus on sustainable growth, protection of the watershed, cooperation with Costa Rica at scien- watershed’s globally important ecosystems, and tific and policy levels is essential. Nicaraguan ex- improvement of livelihoods. perts cite successful experiences of cooperation with scientific laboratories in Costa Rica and Co- lombia that could be scaled up within the frame- work of the SAP implementation and joint moni- toring efforts. This study has also identified the critical parameters that need to be monitored: precipitation, water flows, agrochemical runoff from agriculture, and the nutrient content of the watershed’s soils. Some of the monitoring, such as for precipitation and stream flow, needs to oc- cur continuously while other parameters, such as soil quality, can be established through dis- crete monitoring efforts. Ensuring the financial sustainability and clear assignment of institu- tional responsibilities for a monitoring program of this nature is an essential element for its suc- cessful implementation. In the short term, financing of targeted interven- tions and the selected priorities identified by the SAP and by this study will help the transition to- ward more sustainable use of the watershed’s natural resources. In the long term, the broader economic policy and institutional change will ul- timately determine the watershed’s development pattern. The broader economic policies and institu- tional factors—such as access to markets, agricul- tural extension services, land tenure security and adequate regulation of access to water—will play a key role in determining the longer-term economic development pattern, the agricultural production structure, agrochemical use and land use in the watershed, as well as the prospects for developing the region as the country’s prime tourist destina- tion. Thus, many solutions lie within the broader policy realm and require inter-agency coordination and bringing the environmental problems of the 12 I. Introduction The Lake Cocibolca watershed is uniquely source of water for domestic use. The town of valuable, rich in biodiversity, and a catalyst for Juigalpa, in the Department of Chontales, already economic growth with high potential to benefit draws its water from the lake through a pumping the poor. Lake Nicaragua, also known as Lake station at Puerto Díaz. A similar aqueduct is being Cocibolca, is a major freshwater resource in Central built to supply water to the town of San Juan del America and the second largest lake in Latin Sur, on the Pacific coast. Several other riparian America after Lake Titicaca (Figure I.1). With its towns, including Rivas and Granada, may also draw surface area of 8,187 km2, the lake covers nearly water from the lake in the coming years. In the 15 percent of Nicaragua’s territory and is located longer term, there has been discussion of building entirely within Nicaraguan territory, although its an aqueduct to supply Managua and Masaya from watershed is shared between Nicaragua and Costa the lake. Some irrigation systems also draw water Rica.1 The lake’s watershed is very extensive, from the lake, notably the Compañía Azucarera spanning 13,707 km2 in Nicaragua (excluding del Sur, S.A. (CASUR), which uses lake water to the lake itself and its islands) and 2,577 km2 in irrigate 5,400 ha used for sugarcane production Costa Rica. With a population of around 750,000, in Potosí (Department of Rivas). Lake Cocibolca is the watershed is a major area for agricultural also increasingly used for tourism by both national production, is one of the main tourist attractions and international visitors. Current uses include in the country with its colonial city of Granada and water sports from the lake’s beaches and from Ometepe Island, and offers a habitat for many boats, boat trips to the lake’s many islands, and species. The watershed hosts three wetlands that recreational fishing. These uses are also likely to were declared wetlands of global significance by the increase over time. 1971 Ramsar Convention. Several fish varieties are Threats to Lake Cocibolca. In recent years, endemic to the lake, and the watershed’s location there have been increasing concerns about within the Mesoamerican Biological Corridor has contamination and ecological degradation of Lake made it a meeting ground for fish, bird and mammal Cocibolca. Concerns include bacteriological and species from North and South America. chemical contamination from improperly treated Uses of Lake Cocibolca. Lake Cocibolca is currently or untreated domestic and industrial wastewater, used primarily for recreation, fisheries (including leakage of pesticides and fertilizers into the lake aquaculture) and transportation. In the future, and rivers in its watershed, possible eutrophication however, the lake is expected to be an important associated with the rising levels of nutrient-rich 1 The Lake Cocibolca’s watershed is part of the greater San Juan River basin, which also includes the watersheds of Lake Managua and the San Juan River. All references to the Lake Cocibolca watershed in this report are to the area that drains directly into the lake. 13 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) sediments carried to the lake from eroded soils health of anyone, particularly children, swimming and areas of deforestation in the upper watershed, in the contaminated areas of the lake or drinking and introduction of aggressive exotic fish species its water without adequate treatment. The growth such as tilapia. This degradation may threaten of blue-green algae, detected in some studies by current and potential future uses of the lake, but its Nicaraguan research institutes and associated extent is uncertain because of a lack of systematic with increasing nutrient flows to the lake, may monitoring and important gaps in the scientific undermine the ecosystem’s health and could understanding of water quality problems. Localized double water treatment costs. Finally, deforestation bacteriological contamination near the beaches and soil degradation in the upper parts of the lake’s of Granada and other lakeshore towns may limit watershed are reducing agricultural productivity recreation opportunities and is likely to harm the and negatively affecting farmers’ livelihoods; and Figure I.1. The San Juan River Basin and Lake Cocibolca Basin Source: TWINLATIN project database based on data provided by INETER. 14 sedimentation reduces navigability of the San Juan Water Law, has already been delayed by over a River and diminishes the prospects for tourism year; and the Commission was not operational at growth in the area. Although it is unclear how far the the time of the completion of this study (June 2010). lake is from reaching a critical threshold at which A strategic vision has underpinned the efforts the ecosystems would be severely or irreversibly to set broad priority actions and specific policy affected, the case is strong for urgent policy actions and investment priorities. The strategic vision to begin shifting to a more sustainable future for integrated watershed management at regional development path for this important watershed. level for the greater San Juan River watershed, The Legal and Institutional Framework for which includes the Lake Cocibolca watershed, Water Resources Management. Nicaragua has dates back to the 1992 Summit of the Presidents recently taken significant steps to strengthen the of Central American Countries. This was followed by legal framework for the management of its water the Transboundary Diagnostic Study (Diagnóstico resources at national level and in the priority Ambiental Transfronterizo, DAT) prepared in 1994 watershed of Lake Cocibolca. The 2007 National and 1996, and the preparation of the 2004 Water Law (Law No. 620) stipulates the need Strategic Action Program (SAP) for the greater San for integrated water resources management at Juan River watershed (Box I.1). The Government of watershed and sub-watershed levels, with the overall Nicaragua is currently identifying financing sources objective of protecting drinking water sources and to proceed with the implementation of priority facilitating access to safe drinking water. The law actions identified by the program. The government specifically refers to the need to protect the Lake has developed a solid legal and policy framework Cocibolca watershed as a strategically important for the implementation of actions envisaged in the source of potable water. Subsequently, Law No. SAP through such benchmark achievements as 626 stipulated the creation of the Commission for the adoption of the 2001 National Water Policy, the Sustainable Development of the Lake Cocibolca the recent passage of the 2007 Water Law, the and San Juan River Watershed. Progress with the creation of the Commission for the Sustainable implementation of corresponding institutional Development of the Lake Cocibolca and San Juan reforms in the water sector has been slower. The River Watersheds in 2007, and the priority given creation of the National Water Authority as the to integrated water resources management by the executing agency, as stipulated by the National 2009–2011 Updated National Human Development Box I.1. Preparation of the Strategic Action Program (SAP) Preparation of the SAP was supported by the Procuenca Río San Juan Project, with GEF financing of $3.9 million, over the course of 2001–2005. The project was jointly implemented by the Ministry of Environment and Natural Resources of Nicaragua (MARENA) and the Ministry of Environment and Energy (MINAE) of Costa Rica, and was supported by the Global Environmental Facility’s (GEF) implementing agencies: United Nations Environment Programme (UNEP) and the Organization of American States (OAS). The main objectives of the SAP are (i) the creation of a well-coordinated bilateral planning process for the watershed, (ii) the strengthening a basin-wide information system and the capacity of public institutions, and (iii) the promotion of strategic actions such as sustainable agricultural production and the restoration of deforested areas. The results of the technical studies and projects implemented to date, and the resulting strategic focus areas, have been summarized in the 2004 TEDS. 15 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Plan. Ensuring successful implementation of the change is far more complicated. Modeling tools key elements of this comprehensive regulatory and are needed to carry out this analysis. This study policy framework is an important challenge and an assesses pollution from agricultural land and land urgent current priority. use change by applying a hydrological and land use Municipal-level Efforts to Protect the Lake model, the Soil and Water Assessment Tool (SWAT), Cocibolca Watershed. Promising watershed to the lake’s watershed. The model was applied by management efforts at municipal and regional a team of international and local experts, drawing levels have underpinned the important legal and on data collected by local institutions (Annex A). Use institutional changes needed at national level in of SWAT allows nutrient flows from the watershed order to prepare the bilateral SAP for Nicaragua to the lake to be assessed and the origins of and Costa Rica. The association of 32 Nicaraguan the nutrient flows to be identified. By combining municipalities in the area of the Lake Cocibolca SWAT estimates with estimates of other nutrient watershed (Association of Municipalities of the flows into the lake, their relative importance can Great Lake, AMUGRAN) has been coordinating be evaluated. The SWAT model also allows the watershed protection actions at municipal level likely impact of changes in land use and other and holding annual Cocibolca Forums. factors (including the potential impact of climate change) to be simulated. Based on this improved Objective of the Study. The main objective of this understanding, possible policy options to reduce study is to fill an important gap in the understanding threats to the lake can be examined. of the environmental problems as identified by TEDS, and to build a more comprehensive picture Process of the Study. The study was launched in of the sources of contamination. The study Managua in November 2008 with the creation of achieves this by examining the entire watershed a Technical Working Group, composed of the key and all pollution sources, unlike earlier studies that government institutions and research institutes, focused only on parts of the watershed or on a few and a Steering Committee composed of high- pollution sources. level decision makers heading those institutions (MARENA, MAGFOR, INTA, INETER, ENACAL, CIRA/ Audience. This study is intended primarily for UNAN, CIEMA and MINSA). This study builds on Nicaraguan experts and government agencies, earlier efforts by other national and international as well as their counterparts in Costa Rica and organizations, particularly the European Union- the region; the study is also intended to inform supported TWINLATIN project that had just come the lending program of the World Bank and other to completion at the start of this study.2 The donors. The improved understanding of drivers dataset of environmental data and georeferenced of degradation in the watershed will facilitate information, provided for the TWINLATIN project the setting of policy and investment priorities in by INETER, MAGFOR, MARENA, CIRA and the watershed area while considering relevant other government and research institutions in environmental, social and economic perspectives. Nicaragua, were augmented by the additional data Approach. Assessing the magnitude of the impact and incorporated into a decision-making tool. The of contamination from point sources (wastewater information on the lake’s hydrology, soil types, and tilapia farming) is relatively straightforward. land use and climate that has been incorporated Assessing non-point source pollution (sediment in the SWAT database is more easily available to and nutrients) from agricultural land and land use decision makers as an outcome of this study. This 16 study’s results will inform the Master Plan for the modeling work undertaken to quantify and assess lake’s watershed, under preparation by MARENA. these pressures, and presents the results of the The methodology and intermediate results were analysis. Section IV summarizes the research discussed with Nicaraguan scientists and relevant priorities that have emerged from the modeling government institutions in a series of workshops efforts in this study. Section V sets investment over the course of the study and corroborate many and policy priorities emerging from this study, in of the earlier findings by Nicaraguan scientists (i.e., order to address the pressures and protect the CIRA and CIEMA). lake’s ecosystems and natural resources. Although Outline of the Report. The following section this study represents a significant step forward in discusses in more detail the existing knowledge our understanding of the problems facing Lake of the lake’s condition, the pressures it faces, and Cocibolca, significant gaps remain in the scientific the consequences of Lake Cocibolca’s degradation understanding and socioeconomic assessment of on the economy, livelihoods, public health, the effects of environmental degradation and of and ecosystems. Section III then describes the their solutions. 2 The TWINLATIN Project (“Twinning European and Latin American River Basins for Research Enabling Sustainable Water Resources Management,� 2005–2009, www.twinlatin.org) was an international research project funded under the priority area “Global Change and Ecosystems� of the European Commission’s 6th Framework Programme for Research andTechnical Development. The project was executed by a consortium of research institutions and government stakeholder organizations from the water resources sector from three European and seven Latin American countries, and covered five Latin American case-study basins. The project’s main objectives were to fill in gaps in local and regional knowledge in order to enhance possibilities for the implementation of integrated basin-level water resources management plans. Activities in the Lake Cocibolca Basin were conducted by CIEMA (Center for Environmental Research and Studies of Nicaragua’s National Engineering University) and the EULA-Chile Center for Environmental Research (University of Concepción, Chile), in close collaboration with national stakeholders (INETER, in particular the Water Resources Bureau, MARENA and others) and with important support from international consortium members, especially the Swedish Environmental Research Institute (IVL), which also acted as the project’s general coordinator. A particularly important achievement in the case of the Lake Cocibolca Basin was the construction of a Georeferenced Environmental Database, which provided the basis for the work conducted under the present study. 17 II. Deterioration of the Watershed and Sources of Contamination Lake Cocibolca is relatively shallow, with an average topography, with more than 20 percent of the area depth of only 13 meters, a factor that plays an having a slope gradient greater than 30 percent; important role in the lake’s water quality and the and its rainfall characteristics, with more than 30 severity of the environmental pressures it faces. percent of the area receiving more than 3,000 Two other crucial factors of the watershed are its milliliters (mm) per year (Figure II.1 and Figure II.2). Figure II.1. Average Annual Precipitation in the Lake Cocibolca Watershed (1975–1994) Source: Map based on data provided by INETER for TWINLATIN, 2009. 19 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure II.2. Topography of the Lake Cocibolca Watershed Source: Map based on TWINLATIN database, 2009.v Resources Research (CIRA/UNAN) have generated Evidence of Contamination Problems but evidence of bacteriological contamination and of Major Knowledge and Data Gaps high levels of agrochemicals and their residues Little is known about the trends in water quality in some samples and have pointed to an ongoing because monitoring of water and sediment quality eutrophication process in Lake Cocibolca. Based on in the lake and in its watershed has not been these limited sampling data, water quality appears systematic. However, the available anecdotal to have deteriorated in the last fifteen years. evidence, such as the occurrence of fish kills in the Concerns about Eutrophication. One of the most lake, and occasional monitoring data suggest that serious longer-term water quality concerns in the lake water quality is increasingly becoming a problem. is the ongoing process of eutrophication, marked by Water sampling campaigns by the Center for Water the presence of sufficiently high levels of nutrients 20 in the water to cause algal growth, particularly species present in Lake Cocibolca are needed for of cyanophytes commonly known as blue-green a more definitive assessment of the severity of the algae.3 Problems associated with eutrophication eutrophication problems in the lake and what the include increasing cyanobacteria populations presence of those algae means for public health, and the associated potential for the production of ecosystems and water treatment. Furthermore, microbial toxins that can affect fish, wildlife and in the absence of systematic monitoring data, humans. In addition, these cyanobacteria produce calibration of hydrological models such as the one organic compounds that can cause undesirable developed under this study is not possible. One of taste and odor in the water, resulting in consumer this study’s contributions is the identification of complaints and very high water treatment costs. key areas and parameters for monitoring that are Although occasional water quality monitoring needed to enable the development and calibration campaigns have pointed to a eutrophic status in of land-water models in the future. sampled sections of the lake, existing water quality Fecal and Pesticide Contamination. The limited studies do not provide unambiguous evidence of monitoring data point to localized high levels of the severity of eutrophication problems. Monitoring bacteria indicative of human fecal contamination data also indicate a worrisome tripling of nitrogen near Granada, San Jorge, San Carlos and Rivas. (N) levels and near-doubling of phosphorus (P) Water quality near the beaches may pose public levels in sampled areas between 1994 and 2003; health risks in the hotspots of contamination nitrogen levels had reached 382 microgram per because bacteriological levels exceed the levels liter (μg/l) and phosphorus levels 47 μg/l (García et recommended for swimming and recreation, al. 2003).4 The lake’s turbidity and typically windy according to the results of the occasional monitoring conditions help slow the development of blue-green campaigns. According to recent samples of water algae and raise oxygen levels in the water, but the quality mostly near beaches, beachfront restaurants lake’s shallowness makes it more susceptible to and piers in those towns, the total fecal coliform eutrophication. count exceeded 200 most probable number (MPN) Gaps in Monitoring Data and Toxicology Studies. per 100 milliliters in 13 out of 20 sampled areas, The available occasional monitoring studies and exceeded 1,000 MPN in four samples, likely leave no doubt that water quality is a serious making it unsuitable for bathing in the areas with concern in the watershed, but it is unclear how the the worst water quality (MINSA 2009).5 In some concentration of pollutants fluctuates throughout areas the bacteriological count even exceeded the the year, how pollutants travel in the lake, and standards set by the Nicaraguan Water Supply and whether toxic algae varieties are already present Sanitary Sewage Company (ENACAL) for drinking or are becoming a threat to the lake’s water water quality prior to treatment with conventional quality. Toxicology studies focusing on algae potabilization methods. However, monitoring 3 Other symptoms include an increase in phytoplankton and chlorophyll a, and structural simplification of biological communities. 4 Studies in Florida and Brazil indicate that eutrophication of tropical shallow lakes can occur when total nitrogen reaches 2,000 µg/l and total phosphorus reaches 50–200 µg/l (Koster et al. 2009). 5 Total fecal coliform ranged between 2,800 and 5,000 MPN per 100 milliliters in three out of ten areas in the water quality monitoring sample, and the thermo-tolerant coliform count ranged from 230 to 1,100 MPN in the three samples with the worst water quality (Salvatierra Suárez and Caballero Arbizú 2006: 31). According to Canada’s 2003 water quality norms, water with total fecal coliform exceeding 1,000 MPN per 100 milliliters is not suitable for swimming and irrigation, while according to the US Environmental Protection Agency’s (US EPA) 1991 water quality guidelines, the thermo-tolerant coliform count should not exceed 200 MPN in water suitable for swimming. 21 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) data suggest that, in general, the lake’s water degradation products, have been detected in river quality is high enough to be used as a source of and lake sediments, although the levels of these drinking water with conventional water treatment contaminants in river waters were below the levels processes.6 Measurable levels of polycyclic of concern for aquatic life and drinking water.7 aromatic hydrocarbons, as well as organochlorine Since these pesticides and their residues persist and organophosphorus pesticides and their (do not degrade) for many years in soils and water, Figure II.3. The San Juan River is the Lake’s Only Outlet to the Sea Source: Data provided by INETER for TWINLATIN, 2009. 6 In 2007, ENACAL initiated a Special Water Quality Monitoring Program for Lake Cocibolca, which involves systematic monitoring of a range of parameters at 64 sites. The results to date were recently presented by ENACAL. They indicate that the lake’s water is suitable for conventional treatment to make water potable even though parameters are exceeded in some critical areas. Nicaraguan water quality standards defined by INAA specify that the total coliform count needs to fall below a monthly average of 2,000 MPN per 100 ml for water for domestic use prior to standard treatment (only disinfection) and below 10,000 MPN per 100 ml for water for more elaborate and slightly more expensive conventional treatment (ENACAL 2009). 7 The concentration of the highly persistent herbicides dieldrin, linden and the products of DDT degradation (pp-DDT) exceed Canadian- and US- recommended ambient quality norms. A highly persistent herbicide, linden, possibly used in the past or at present by agriculture and in vector control, was found in all sediment samples of the lake, with the concentration varying from 0.45 to 1.51 µg/Kg (the permissible level according to Canadian guidelines is 0.94) (CIRA/UNAN, Ciudad del Saber). 22 they will continue to be carried to the lake in runoff, of service coverage rise from the current national despite the fact that they are no longer widely used average of 80 percent. Several hydrological studies in agriculture. have concluded that, given the current efficiency Sedimentation of the San Juan River. Another of water supply, in the medium term Managua’s important concern, identified as one of the main already overexploited aquifer will be unable to environmental problems in the watershed, as meet the city’s growing water demand (JICA 1993; documented in the studies of the Procuenca ENACAL 2003, 2007).10 Lake Cocibolca and the Las project, is the high rate of sedimentation. The Canoas reservoir appear to be most viable sources San Juan River is the lake’s only outlet (Figure for additional water supplies.11 Lake Cocibolca II.3). As noted by the Procuenca study, the already provides drinking water to about 75,000 increased sedimentation in the area where the people in the city of Juigalpa, and an aqueduct is lake enters the San Juan River appears to have under construction to supply water from the lake increased difficulties for navigation since parts of to the coastal tourism town of San Juan del Sur. the river have now become impassable even for Other towns near the lake that face overexploited small boats during the dry season, and thereby aquifers and aquifer contamination with nitrates require dredging in this area (Procuenca 2004).8 and iron, including Rivas, San Jorge, Cárdenas, Bathymetric studies, measuring the lake’s depth, Boaco and San Carlos, could draw water from the have revealed that substantial sedimentation is lake in the future. Granada, Nicaragua’s fourth occurring in the eastern-southeastern parts of most populous city with about 111,000 people and the watershed, near San Carlos and the mouths one of the country’s main tourism attractions, may of the Mayales, Tepenaguasapa and Tule Rivers also resort to using the lake in the longer term.12 (Procuenca 2004). Systematic monitoring data are Although in-depth economic assessments will still required to evaluate the extent of the problem and be needed to determine whether the lake is a more estimate the rates of accumulation of sediment reliable and less expensive water supply source flows in the river’s confluence with the lake. than other alternatives such as rivers and streams in the lake’s upper watershed, and to assess the Lake Cocibolca’s Role in Domestic Water Supply. scope for the efficiency gains from improving water Lake Cocibolca is considered a major future source use from current sources, it is clear that the lake of water supply in the region. Currently exploited is a likely water supply source in the long term for water sources will be unable to meet growing demand at least some of the towns in the lake’s watershed as Nicaragua’s population grows9 and as the rates 8 This historic river was the route of famous pirates and later the stage for great colonial-period battles between the Spanish and British Crowns. It later became the route of Cornelius Vanderbilt’s interoceanic steam ship service during the California gold rush; and it was described by Mark Twain in his notebooks as “an earthly paradise.� 9 Nicaragua’s population growth rate of 1.8 percent is one of the highest in the Western Hemisphere. 10 In principle, current sources are sufficient to cover Managua’s needs through at least 2015, assuming that distribution losses can be reduced from 55 percent to 25 percent of total water produced and distributed by Managua’s water system (JICA 2005; World Bank 2008). However, this ambitious target is unlikely to be achieved. Even if it were, additional sources would be needed to meet increasing demand after 2015. 11 Las Canoas is located in the Malacatoya River watershed, which is within the Lake Cocibolca watershed. ENACAL estimates that Las Canoas could provide about 1.05 m3/s, of which 90 percent would be used by Managua (increasing total supply from current levels of 2.78 m3/s) and the rest by Titipapa (ENACAL 2008). Although this is only a small fraction of what Lake Cocibolca could provide, it could be available sooner and could be delivered to Managua largely by gravity flow. However, the Malacatoya River watershed also has its problems, as discussed below. 12 Hydrological assessments indicate that Granada’s aquifer has enough capacity to meet the city’s water needs until 2040, but contamination from nearby solid waste disposal sites may limit its use after 2022. 23 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) and possibly even for Managua.13 Using lake water water treatment costs) and data limitations is likely to be particularly important for towns near (agrochemicals). In-depth assessment of the costs the shore in small catchments, such as Rivas, San of investments in watershed and water quality Jorge, Cárdenas or San Carlos, and for towns along protection and the associated benefits are needed the Pacific coast, such as San Juan del Sur. in the contamination hotspots where humans Impact of Eutrophication on Water Treatment and the ecosystems are exposed to and may be costs. Despite the apparent deterioration in the affected by agrochemicals and bacteriological lake’s water quality over the last decade and contamination. evidence of ongoing eutrophication, conventional water treatment processes at present are generally sufficient to ensure that drinking water standards Sources of Environmental Degradation are met. With the continuing flow of nutrients and Sources of Contamination. Some pollution the associated growth of blue-green algae in the originates from point sources, such as the lake, more expensive water treatment processes discharge of domestic wastewater and sewage would be required to remove organic matter, without appropriate treatment, discharge of turbidity and odor in treated water; and to remove industrial wastewater, and intensive cultivation of other chemical compounds and metals that tilapia in some coastal areas. But many important adversely affect water quality. According to ENACAL, sources of contamination in the lake—nitrogen, if water quality were to deteriorate to such an extent phosphorus and highly persistent herbicides, that more complex water treatment processes as well as hydrocarbons—are from non-point are required, water treatment costs could double sources, particularly agricultural runoff. Previous compared to conventional treatment, from about studies have made important contributions to US$0.30 per cubic meter to US$0.67 per cubic the understanding of some of the causes of meter. In a hypothetical case that all of Granada’s environmental degradation in the watershed, or water demand were to be met by the lake, annual of contamination from multiple sources in some treatment costs would rise from US$3.6 million to areas, but no integrated quantitative assessment US$8.0 million at current water consumption rates of pollution and other environmental risks from of 0.38 m3/s. all sources across the entire watershed—a much Reduction of Health Risks and Adverse Impacts needed input for developing the Master Plan for the on Biodiversity. Other benefits from protecting watershed—has been carried out prior to this study. water quality could not be assessed in this For the first time, this study provides quantitative study because of the uncertainty about impacts estimates of pollution loads from multiple sources (eutrophication, bacteriological contamination and for the entire watershed. However, this estimate and the effects on ecosystem health, and future is limited by the available data and the scientific understanding of the problems (Figure II.4.). 13 As an example of the cost of obtaining water from Lake Cocibolca, the cost of the newly constructed aqueduct to Juigalpa was US$20.6 million. This covered the building of two pumping stations, 28 km of aqueducts to bring the water to Juigalpa, and a 1,200 m3 holding tank cost (ENACAL 2008). The Government of South Korea contributed US$17.2 million of this cost. A second phase of the project, to expand the treatment plant and improve the local distribution network, is expected to cost US$19.9 million, of which 80 percent will also be financed by South Korea. Beyond the capital costs, drawing water from the lake imposes high operating costs. The monthly energy costs arising from the Juigalpa’s system are estimated at US$60,000. 24 Figure II.4. Sources of Environmental Degradation in the Watershed and its Impacts Extensive Agriculture Intensive Agriculture: Municipal and Tilapia Farming Degradation of and Cattle Farming Agrochemicals Industrial Wastewater in the Lake Wetlands Health risks to Nutrient loading Loss of ecosystem exposed agricultural Nutrient loading Nutrient loading and from soil erosion and services (wildlife workers; ecosystem and bacteriological risk of intrusion of sediment runoff; soil habitats; water and water quality contamination invasive species productivity loss filtration function) risks Extensive cattle Loss of important farming and other Agrochemicals pose Nutrients increase Nutrients increase wildlife and migratory agricultural practices risks to the exposed the risk of the risk of bird habitats and and pasture burning agricultural works eutrophication; eutrophication; fish breeding increase soil erosion during improper bacteriological invasive species grounds especially rates; naturally application; and if contamination may may adversely affect in Guatuzos; nutrient loads to the leak into water cause health risks the ecosystems, loss of water water bodies and bodies, damage through recreational endemic species, filtration capacity; increase the rist ok water quality and the contact to vulnerable and the fishing and decreased eutrophication; local ecosystems groups industry ecotourism potential productivity loss Extensive Land use in Subsistence Crop of the watershed (Montenegro-Guillén 2005). Agriculture and Low-productivity Cattle Farming. The environmental impacts of this agricultural Agriculture and livestock are the backbone of the expansion have been great and include reductions economy within the greater San Juan River watershed, in biodiversity, increased runoff and severe with most of the area devoted to agricultural use. soil erosion. Extensive cattle farming, the most The basin produces a quarter of Nicaragua’s total common agricultural activity in the Nicaraguan part output of beans, around 16 percent of its corn and of the watershed, is a major source of nutrients. sugarcane, and one-fifth of its sorghum. However, The practice of seasonal pasture burning makes the most important land use is extensive pasture, the soils in areas with high slopes and no forest as shown in Figure II.5.14 Approximately 24 percent cover particularly prone to erosion. Eroded soil is a of the land consists of managed pastures and significant source of nitrogen and phosphorus that grasslands, and another 49 percent is covered with reach Lake Cocibolca, because the volcanic soils grasslands or grasslands with shrubs. In contrast, in the lake’s watershed are rich in these nutrients. only about 14 percent of the basin remains under Another source of nutrients is the application of forests, primarily on the eastern and southern edges fertilizers. 14 Area of tacotales (regenerating brush areas) are counted as pasture because they had previously been used often as pasture and are often so used again after a fallow period. 25 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure II.5. Land Use in the Lake Cocibolca Watershed Source: Based on data from MAGFOR and INETER collected under the TWINLATIN project and this study. The Procuenca San Juan Project emphasized this excessive soil erosion, as highlighted by the the importance of deforestation and poor Procuenca San Juan Project, included reduced agricultural practices in increasing soil erosion soil fertility, gully erosion, increased the turbidity in the basin. Agricultural practices identified by the in the rivers, erosion and sedimentation of stream project as causes of excessive soil erosion included channels, diminished recharge of aquifers and deforestation, burning crop lands and pastures subsurface return flows to streams, increased in the dry season to facilitate land preparation flows in the wet season, decreased flows in the dry and pasture regrowth at the beginning of the season, and excessive sedimentation and algae wet season, and extensive livestock production growth in the lake (Procuenca San Juan 2004). without pasture rotation, leading to localized The project identified problems with soil erosion in soil compaction by cattle and poor protection the Ochomogo, Malacatoya, Tecolostote, Mayales of the soil surface by vegetation. The impacts of and Acoyapa sub-basins in Nicaragua. In addition, 26 substantial areas with “severe� and “strong� levels area is under staple grains. In the greater Lake of soil erosion were identified in the Costa Rican Cocibolca-San Juan River watershed, small and portions of the watershed, where there are large subsistence producers represent around 88 percent areas of cattle and crop production below the of producers, but they occupy only half of the total protected areas near the top of the watershed. area under crops and pastures (Montenegro-Guillén Bathymetric studies, measuring the lake’s depth, 2005). Livestock production in the Nicaraguan part have revealed that substantial sedimentation is of the Lake Cocibolca watershed is dominated by occurring in the eastern-southeastern parts of the extensive dual-purpose cattle farming by small watershed, near San Carlos and the mouths of the farmers; in the Costa Rican part of the watershed, Mayales, Tepenaguasapa and Tule Rivers. livestock production generally specializes in higher- Studies in Nicaragua and Costa Rica have found productivity dairy or meat breeds. It is difficult to large amounts of localized soil erosion, large draw a conclusive picture because few statistics sediment loads in rivers during the wet season, and little socioeconomic information about the and sediment accumulation near the mouths population and agricultural production structure of rivers that drain the high-rainfall areas of in the Lake Cocibolca watershed are available the Lake Cocibolca watershed. The Procuenca (Procuenca San Juan 2004). San Juan Project and studies by CIRA-UNAN Although approximately 70 percent of land has have emphasized the role of soil erosion in the registered titles in Nicaragua, small and poor deterioration of water quality in Lake Cocibolca, producers until recently tended to lack formal title to and several maps representing the local magnitude land, which is often but not always associated with of different factors that influence soil erosion were insecure tenure (Table II.1) (World Bank 2003, pp. produced during the TWINLATIN project; however, 16–17). As in the rest of Nicaragua, high levels of no comprehensive studies have addressed the inequality in land distribution, high levels of tenure scale of nutrient loads associated with runoff insecurity or a lack of formal titles to land, as well as and erosion from the watershed (Procuenca San limited access to markets, credit, and investment Juan 2004 and TWINLATIN 2009). In addition, resources contribute to unsustainable land use and no quantitative estimates are available for an extensive production patterns by small subsistence evaluation of the possible impacts of agriculture farmers in the Lake Cocibolca watershed. As soils and rural development programs focused on degrade in lower-lying areas, subsistence crop promoting sustainable agricultural practices farmers move to marginal-quality soils in areas that could increase agricultural production while with steep slopes, causing soils to degrade further. reducing soil erosion and nutrient losses from the Insecure land tenure arrangements or a lack of watershed. formal titles to land, unclear conflict resolution These unsustainable land uses and production mechanisms and the absence of a modern, up-to- patterns are part of a broader rural development date cadastre pose a further challenge in dealing challenge: to improve productivity of subsistence with illegal land occupations in environmentally farmers through stronger tenure security and sensitive areas, such as the Los Guatuzos wetland. access to productive assets, and to diversify rural These challenges can only be addressed by a livelihoods. Nationally, 72 percent of all rural comprehensive rural development strategy for the households in Nicaragua own only 16 percent of watershed with an emphasis on supporting more total agricultural land and 80 percent of cultivated productive land use, improving land tenure security and the quality of the cadastre and tapping the 27 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Table II.1. Proportion of Farms Without Land Title by Region and Type of Farm (percent of farms without title) % of Farms in Each Region 2001 2005 Category in 2005 Pacific and Managua Purchased 6.1 0.0 35 Inherited 17.6 34.1 42 Agricultural reform 10.0 7.2 18 Other 70.5 53.7 4 Total 16.0 18.1 100 Central Purchased 4.7 4.3 52 Inherited 32.3 29.3 39 Agricultural reform 12.2 7.1 6 Other 69.0 61.6 3 Total 18.9 16.1 100 Source: World Bank, 2005. watershed’s high potential to develop tourism and persists in the environment. In the past decade the other types of alternative livelihoods that are likely governments of Central America and particularly to be more sustainable than the current production of Nicaragua have taken important steps to curb patterns. the use of harmful agrochemicals. Despite these Extensive agriculture is associated with land efforts, much progress is needed for pesticide degradation and pollution in the watershed, but regulation to come close to the recommendations intensive agriculture also results in environmental of the FAO Code of Conduct, the main international problems. Intensive agricultural production has guideline for their safe application. come at high human health and environmental Pesticide use in Central America has been an costs. High levels of agrochemicals in some water acute social and political issue over the past few and soil samples in the watershed detected today decades, causing large numbers of reported are to a large extent a legacy of economic policies pesticide poisonings among agricultural workers, that had encouraged their excessive application. heated debate about the need to restrict the Favorable exchange rates and negative interest use of the most toxic substances, and street rates on agricultural credit, which in fact made protests and civil unrest. Reports of pesticide- pesticides virtually free, were common during the caused illness in Central America go back to the 1980s (Hruska 1990). Production of toxaphene 1970s, when pesticides were extensively used in (camphechlor), a highly persistent toxic pesticide cotton cultivation in El Salvador, Nicaragua and that is banned in many countries, in that period has Guatemala. After the collapse of cotton cultivation, resulted in environmental contamination that still pesticide use shifted to other crops. It has been 28 estimated that around 400,000 poisonings may assessments and monitoring of the permitting have occurred in Central America each year in the and registration procedures, establishing effective late 1990s, affecting nearly two percent of the coordination mechanisms between the Ministries population over age 15 (Murray et al. 2002). Of of Agriculture and Health, and provision of particular concern are the cases of mass poisonings agricultural extension services for farmers on safe from methamidophos due to environmental or application practices of pesticides and the use residential exposure such as drifts from nearby of Integrated Pest Management (IPM) instead of agricultural fields, aerial applications or school chemical control methods are the main strategies gardens, as reported in the mass media. Most of for reducing the health and environmental the poisonings have been associated with the use risks. Curbing the leakage to markets of banned of highly toxic organophosphates, carbamates and pesticides from the existing stockpiles that have paraquat. Many pesticides currently used in Central not been destroyed poses another major challenge America are highly toxic, acknowledged animal to the regulators. carcinogens, neurotoxins, reproductive toxins As for the damage to ecosystems and adverse or endocrine disruptors that have been banned effects on water quality, it is unclear to what extent or severely restricted in industrialized countries current agricultural practices may be contributing (Wesseling et al. 2005). to high levels of agrochemical residues in some The governments of Nicaragua and Costa Rica samples. Monitoring data of agrochemicals in water have taken important steps to address the problem and soils of the watershed are very limited and by implementing the PLAGSALUD surveillance little is known about current application patterns, system ahead of other Central American countries, apart from the application levels recommended strengthening the capacity of the ministries of by MAGFOR guidelines. Systematic ambient health, banning some most harmful substances, monitoring data as well as data on actual field and improving the permitting and registration applications are needed to facilitate quantitative requirements. However, cases of pesticide assessments of risks to health and ecosystems. poisoning are thought to be severely underreported In the Nicaraguan portion of the Lake Cocibolca in the surveillance system. In Nicaragua, one watershed, agrochemicals are mainly used in rice census-based study found that only 6 percent of the and sugar cultivation, while in the Costa Rican poisonings attended in health centers appeared in portion they are mainly used in citrus plantations. It official statistics. Other studies have also found is unclear to what extent current practices contribute very high rates of underreporting (Wesseling et to soil and water contamination, because data are al. 2002). Furthermore, regulations are based on not available or not disclosed. Obtaining better the exposures estimated based on international monitoring data to establish the magnitude of the practices for which the risks have been evaluated, problem is important, as is supporting education but the use of application techniques that are not on safe agrochemical application practices. approved and evaluated in other countries, such as Nutrient and Bacteriological Contamination using plastic bags impregnated with chlorpyrifos by from Domestic and Industrial Wastewater. The banana workers in Honduras, is common in Central discharge of untreated or poorly treated industrial America. and domestic wastewater contributes to nutrient Training personnel to carry out exposure loads, thereby raising the risk of eutrophication, and 29 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) results in localized bacteriological contamination. watershed—Granada, Rivas, San Carlos, San Even in the watershed’s largest towns, Granada and Jorge, Altagracia and Moyogalpa—are important Rivas, a small share of households is connected sources of untreated or poorly treated wastewater, to a sewerage system; and even when wastewater contributing to the contamination of the watershed’s is collected through sewerage networks, it is rivers and the lake (Figure II.6). Granada is the often poorly treated. Discharge of poorly treated largest lakeshore city with a total population of or untreated wastewater is a source of nutrients 79,400 inhabitants and sewer coverage of 19 and may result in localized bacteriological percent. The wastewater treatment system is contamination. Pollution from poorly treated and deficient and some of the domestic and industrial untreated wastewater from milk processing plants, wastewater flows directly into open drainage and tanneries and a handful of other small industries in natural channels that drain into the lake. Rivas the watershed is another source of pollution that is is the second-largest town near the lake, with a not treated at all. total population of 27,000. Around one-third of its The six largest towns in the lake Cocibolca wastewater flows into the lake after pretreatment Figure II.6. Principal Sources of Municipal Wastewater Discharge Source: Data provided by INETER for the TWINLATIN project. 30 in stabilization ponds, and the rest flows through through operational improvements of the public natural channels directly into the lake without utility companies ENACAL, which is responsible for treatment. San Carlos, with 7,100 inhabitants, water and sanitation networks in urban areas, and is partially built over the lake and houses on the FISE, responsible for the rural areas. But the lack lakeshore discharge wastewater directly into the of financing is not the only culprit; sometimes the lake without treatment. The remaining towns poor operating condition of wastewater treatment near the lake’s shores—San Jorge, Altragracia and facilities is the result of coordination failures Moyogalpa—have a total population of 14,100 among municipalities that share or could share inhabitants without any sewerage coverage. and cofinance treatment facilities. Resolving Part of the reason for the disrepair of oxidation coordination failures and clarifying responsibilities ponds and other basic wastewater treatment for treatment facilities that serve more than one facilities is the lack of funding. Financing municipality may often be an effective way forward. wastewater treatment investments and operating Nutrient Runoff from Tilapia Farming and costs is a formidable challenge in low-income Possible Risks to Biodiversity from an Invasive countries. Raising water tariffs and payment Species. Tilapia production in the middle of the collection rates is often politically difficult, even lake is the subject of heated debate in Nicaragua. when such rate increases are accompanied by One view is that this is an important economic targeted social assistance programs for low- activity and source of employment, associated with income households. Other sources of financing low environmental risks. The Environmental Impact for wastewater treatment are efficiency gains Assessment (EIA) found that the project did not Box II.1. Tilapia Farming can Pose Risks to the Lake’s Biodiversity The tilapia species (Oreochromis niloticus) was accidentally introduced into Lake Cocibolca during hurricane Juana in 1988, when fish that had been cultivated in tanks for research led by the Central American University escaped into the lake. Tilapia also reached the lake during the hurricane from controlled production in the Las Canoas reservoir on the Malacatoya River. Currently, the only commercial aquaculture taking place in Lake Cocibolca is the “Tilapia Produced in Float- ing Cages� project managed by the NICANOR Company. NICANOR began tilapia production in 2003 when the government granted it a concession to develop 86.87 hectares of lake area located in the community of San Ramón on Ometepe Island. In 2003, an estimated 350 tons of tilapia were produced, most of which was sold in the international market for approximately US$677,600 (OSPESCA 2006). According to AdPesca (the Nicara- guan National Fisheries and Aquaculture Administration), NICANOR exported 56 tons of tilapia filet and 83 tons of whole fish in 2005, which resulted in a contribution of US$555,000 to the national economy. An estimated 1,388 tons of tilapia were produced in 2008. Plans by NICANOR to expand production to approximately 3,000 tons of tilapia per year have been document- ed. This expansion, if it occurs, would follow international trends, because tilapia is the second most important commercially farmed fish after carp, and is an increasingly popular food in countries around the world (FAO 2005–2009). However, the new Nicaraguan National Water Law No. 620, Article 97, prohibits the introduction and cultivation of exotic, invasive species in Lake Cocibolca. As a non-native species to the lake, intrusion of tilapia threatens biodiversity and the health of the ecosystem. Tilapia can compete with native species for food and habitat, threatening native fish species. For example, blue tilapia has displaced many native fish in the Gulf of Mexico area (GSMFC 2003). Tilapia also has the capacity to interbreed with native fish populations and form hybrids, which can place additional pressures on ecosystems (Costa-Pierce, 2003). 31 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) pose significant risks; and that the nutrient load watershed; a buffer against floods during extreme from tilapia farming at current production levels is weather events; recreational and ecotourism not a cause for concern given the lake’s hydrology. services; and filtration of nutrients, agrochemicals The opponents of that view cite risks to native and other pollutants. Wetlands cover nearly five and endemic species and advocate alternative percent of the Lake Cocibolca watershed area production methods and monitoring of water quality (Figure II.7). The two most important wetland and the possible effects on native fish species. This systems are San Miguelito and Los Guatuzos. The study does not shed light on this debate apart from Los Guatuzos Wildlife Refuge, a protected area providing a rough estimate of the nutrient load with a weaker conservation status than a national from tilapia farming at current production levels park, is part of the Mesoamerican Biological and comparing it with other sources of nutrients. Corridor and a RAMSAR site, with a long-recognized Deterioration of Wetlands and the Loss of potential for ecotourism. Its management plan Ecological Services that they Generate. Significant was jointly designed by MARENA and the NGO areas of natural wetlands exist along the shores Friends of the Earth in 1996. Nevertheless, Los of the lake, particularly along the southern shore Guatuzos is under pressure from the expansion (Figure 8). These wetlands vary substantially in size, of agricultural activities. About 400 households type, level of connectivity with the river network, that live in the refuge and are mainly occupied in and the land uses within them. For example, the subsistence fishing and farming participate actively wetlands of the Tipitapa watershed on the northern in the management plan. However, it appears that shore receive waters from large areas of rice and illegal settlers in areas zoned for conservation sorghum. Those located in the lower part of the do not participate (Friends of the Earth and Camastro/Las Piedras watershed are downstream MARENA 2003). The challenge is to include them from steep pasture lands. The wetlands in the in the conservation efforts through participatory lower parts of the Niño, Zapote and associated approaches and thereby facilitate the enforcement watersheds receive runoff from a mixture of forests of zoning regulations in this protected area. and pasture lands in both mountainous and level Other Sources of Contamination and Future lands subjected to high rainfall intensities. Some Pressures. Another possible contamination source streams, particularly on the eastern side of the lake, for Cocibolca is through the Tipitapa River from flow directly into the lake without flowing through the highly contaminated Lake Managua. Although significant wetlands. Other streams, such as those Tipitapa is not normally connected to Lake Cocibolca on the northern and southern sides, flow through by means of surface flows, at times, such as during wetlands, some of which are currently completely extreme weather events, it becomes interconnected drained during the dry season for crop and pasture with Lake Cocibolca, resulting in pollution spills. production but still flood during the rainy season. The increasing frequency of hurricanes due to Wetlands provide several important environmental climate change could raise these risks but little services and functions: important bird habitats and can be done to prevent it. Lake navigation, so far breeding grounds for commercially and ecologically not very developed, is another source of pollution. important endemic fish and reptiles in the If it ever materializes, construction of the Húmedo 32 Figure II.7. Wetlands in the Lake Cocibolca Watershed Source: TWINLATIN, 2009. Canal—an alternative to the Panama Canal—would biodiversity; emission of greenhouse gases from pass through Lake Cocibolca and undoubtedly pasture burning and deforestation; increased pose high environmental risks that would need to vulnerability to extreme weather events and be carefully assessed. Finally, a large area in the risk of landslides; the higher future costs of lake’s watershed is now under consideration for water treatment due to eutrophication; and— the development of large new areas of irrigated very importantly—maintaining navigability in the agriculture. confluence of the San Juan River with the lake The degradation of the Lake Cocibolca watershed and realizing the potential to develop sustainable may already be adversely affecting its many uses tourism in the watershed. Because no assessment and the ecosystem services it provides, and may of the impact of sedimentation on the navigability of be giving rise to a range of current and potential the San Juan River is available, it was not possible problems, including health risks from exposure to estimate the associated economic costs in this to contamination in pollution hotspots; loss of study. 33 III. Modeling Pressures on Lake Cocibolca: Results of the Study Information on the absolute and relative importance topography, soil composition, hydrological flows, of different sources of nutrient loading is needed to temperatures, precipitation and land use. These design future government environmental protection results are complemented by estimates of nutrient policies as well as management strategies to loads from other sources—domestic wastewater in minimize nutrient loading into the lake (Figure lakeshore towns and tilapia production—in order III.1). The main contribution of this study is the to provide an order-of-magnitude comparison with estimate of nutrient loads carried by runoff from the the nutrient flows from agricultural areas. Finally, watershed’s agricultural areas. This assessment the study provides an estimate of the order of requires the use of spatial hydrological models magnitude of filtration of sediment flows that that combine information on the watershed’s wetlands similar to Los Guatuzos could provide. Figure III.1. Estimating the Magnitude of Problems Affecting Lake Cocibolca Source of Pollution/Ecosystem Risks Extensive Farming Wastewater Degradation of Intensive Agriculture Tilapia Farming (Crops and Cattle) Discharge Wetlands Negative Impacts Nutrient loading Health risks to from soil erosion and Loss of ecosystem exposed agricultural Nutrient loading Nutrient loading and sediment runoff; soil services (wildlife workers; ecosystem and bacteriological risk of intrusion of productivity loss; habitats; water and water quality contamination invasive species sedimentation of filtration function) risks navigation channels Estimation Method Used in this Study Sediment load, A rough estimation impact of those soils out using information Nutrient load Wetlands not taken Nutrient load on water quality, provided by local estimated using into account in estimated using and nurient load experts. No data population estimates the SWAT model production volume estimated using was available on and wastewater due to the lack and wastewater Soil and Water field application; and generation per of information on generation per tilapia Assessment Tool scarce monitoring person wetlands’ hydrology (SWAT) data in water bodies 35 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Modeling Pressures on the Lake from Soil Tool (SWAT) was selected for this purpose, because Erosion and Agriculture Runoff. Hydrological of its capabilities and extensive experience in its modeling offers a powerful tool to estimate the application throughout the world (Box III.1), Annex nutrient flows from various sources, based on the A provides additional details on SWAT and its best available information. Hydrological models application to the Lake Cocibolca watershed. also allow simulations to be conducted of the effect Application of SWAT. Modeling was undertaken of changing land use and other factors that affect by a team of international and local scientists pressures on the lake, thus helping to identify and with support of the Technical Working Group and assess possible policy responses. Such models also the Steering Committee for the study. Since time allow the effect of changes in baseline conditions and resources were limited, World Bank staff, to be assessed, including the possible impacts of consultants and government ministry leaders climate change. The Soil and Water Assessment decided to conduct a preliminary SWAT analysis in Box III.1. The Soil and Water Assessment Tool (SWAT) The Soil and Water Assessment Tool (SWAT) is a software system designed to help scientists and decision mak- ers manage soil and water resources at watershed and river basin scales. The SWAT system was developed over the last 25 years by a team composed of engineers and scientists from the United States Department of Agriculture’s (USDA) Agricultural Research Service (ARS) and Natural Resources Conservation Service (NRCS) and from Texas A&M University, with major support from the United States Environmental Protection Agency (US EPA) and numerous local, state and international cooperators. Many engineers and scientists in the United States and around the world have contributed to the model, its databases, and interface development. The SWAT system is a multi-unctional tool that can be used to answer a wide variety of questions about the function and management of watersheds, both large and small. Its major capabilities relevant to this study include: • Hydrology: daily simulation of the surface and sub-surface hydrology of a watershed, including impacts of climate change, soil and water conservation practices, urbanization, deforestation, reforestation, brush control, and construction of ponds and reservoirs. • Land Use: the effects of changing land use on the amount and quality of water in our streams and reser- voirs, including urbanization, increase or decrease in forest cover, conversion of forest and range lands to agriculture (or the reverse), and construction of reservoirs. • Water Quality: simulation of point and non-point sources of pollution, including sediment, nutrients (nitrogen and phosphorus), chlorophyll, pesticides and bacteria. • Climate Change: the impacts of past or future climate change on the hydrology, soil erosion, water qual- ity, and agricultural production of watersheds, including management practices and infrastructure (such as ponds, reservoirs or irrigation systems) designed to adapt and mitigate the negative impacts of climate change. The SWAT system has been used successfully in many projects worldwide, which are documented in over 500 peer-reviewed scientific publications. It is used by more than 30 universities. Over the last decade, internation- al and regional meetings of SWAT users and developers have been held in the US, Netherlands, Italy, Germany, China, Korea, Thailand, Chile, Portugal, and Spain. Most of the SWAT system software, manuals, databases, and peer-reviewed literature are in the public domain and can be downloaded at . The SWAT 2005 Theoretical Documentation was translated into Spanish as part of this study and will soon be available at the same web address. 36 cooperation with a small multi-institutional team of and numerous watersheds in North America and Nicaraguan scientists and specialists who would Europe. Application of SWAT was based on available help collect available data required by SWAT and be data on topography, hydrology, land use, climate, trained to implement the model in more detailed stream flows, water quality, topography, soils, studies after the completion of this study.15 This agricultural practices, waste water loads, tilapia approach to training multi-institutional teams in the production, water quality and nutrient loading of use of SWAT to execute specific watershed projects Lake Cocibolca. An important source of information has been successful in a number of river basins in this process was the Environmental Database around the world, including the Indus, Ganges, for the Lake Cocibolca Watershed developed under Brahmaputra, Mekong, Nile, Yellow and Yangtze, the TWINLATIN project. Table III.1. Estimated Nutrient Flows into the Lake from Domestic Wastewater Discharge in Coastal Towns Population Quantity Total N Total P Town (2008) (m3/day) (tonsyear) (tons/year) Granada 83,000 6,717 71–88 14–19 Rivas 25,837 3,437 41–45 9–10 Moyogalpa 10,500 1,260 6–12 1–2.3 Altagracia 2,316 278 1–3 0.2–0.5 Potosí 4,293 515 3–5 0.3–0.9 San Jorge 7,156 859 4–8 0.5–2 Cárdenas 1,273 153 0.7–1.4 0.1–0.3 Morrito 2,757 331 1.6–3 0.2–0.6 San Miguelito 3,064 368 1.8–3.4 0.2–0.7 San Carlos 8,909 1,069 5–10 0.7–2 Coastal towns total 1/ 135–177 26–38 Non-coastal towns total 2/ 175–329 22–66 1/ Estimates make the following assumptions: (i) for Granada and Rivas, 60 and 70 percent of the population are assumed to be connected to wastewater treatment systems; (ii) discharge of wastewater from the Granada and Rivas water treatment plans is 4,061 and 2,817 m3 per day, respectively, with nutrient concentrations of 35 milligram per liter (mg/l) for nitrogen and 8 mg/l for phosphorus; these figures include nutrients from domestic and industrial wastewater sources (data provided by ENACAL based on actual monitoring data); (iii) for the population in coastal towns not connected to sewer systems, daily per capita loads of 0.008–0.015 of nitrogen and 0.001–0.003 of phosphorus are assumed; and (iv) about 20 percent of the nutrient loads under (iii) end up in the lake. 2/ For non-coastal towns, it is assumed that the 10 percent of the nutrient load generated by rest of the population in the watershed (approximately 600,000 people) reached the lake. The same per capita loads as per assumption (iii) in table above are used in the calculation. Source: Own estimation using typical nutrient loads per unit of wastewater in the Masaya wastewater treatment system as provided by ENACAL. 15 Fourshort SWAT courses were conducted: three in Managua and one in College Station, Texas. During these short courses, over 15 Nicaraguan scientists and agency specialists were trained in the use of SWAT and related software. 37 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Estimated Soil Erosion, Agriculture Runoff and streams in the northern and eastern parts of the Nutrient Flows. SWAT was used to simulate the watershed. Similar analyses have been conducted movement of different fractions of phosphorus for nutrients, resulting in a ranking of the sub- and nitrogen off the land, down streams, and watersheds in terms of nutrient loads per hectare into lakes and reservoirs, using 11 years of daily (Annex Figure C.1 and Table C.1). Somewhat weather data for a large number of weather counter-intuitively at a first glance, the rankings stations in and surrounding the watershed. Land in terms of sediment and of nutrient loads are use data were taken from maps prepared during not well correlated. An analysis was conducted to the last decade, based on satellite imagery. Figures assess the correlation between the average annual III.2a and III.2b show the estimated mean annual load of sediments and nutrients (total P and total soil erosion within the lake’s watershed and the N) by sub-watershed. The analysis reveals that the forest cover. For baseline (current) conditions, the sediment load explains between 37 and 61 percent mean annual sediment loads delivered to Lake of the nutrient loads. This result is not surprising Cocibolca are estimated to be 17.8 million tons (or after the land use patterns in the sub-watersheds 13.3 tons/ha/yr),16 while total nitrogen (N) loads with the highest nutrient load rates (El Dorado, are estimated to be 7,419 tons (or 5.55 kg/ha/yr) Ochomogo and Tipitapa) are more closely viewed. and total phosphorus (P) loads are estimated to be Apart from sediment and the nutrients associated 593 tons (or 0.44 kg/ha/yr).17 These results are with sediment particles, another factor influencing similar to previous estimates from the Procuenca nutrient loads is the direct application of fertilizers, San Juan project of total nitrogen (3,139 t/yr) which is high in areas of rice, sugarcane and corn and total phosphorus (571 t/yr) delivered to Lake cultivation (Annex A, Tables A.2 and A.3). Cocibolca from its principal sediment-contributing Nutrient Loads from Municipal and Agroindustrial tributaries. In addition, the Procuenca San Juan Waste Waters. To complement the SWAT estimates project reported very shallow water depths and of nutrient flows from the watershed, data are substantial sediment deposition near San Carlos also needed on nutrient loads from municipal and the mouths of the Mayales, Tepenaguasapa and agroindustrial waste. Few data are available and Tule Rivers in Nicaragua, each of which to estimate the amount and quality of municipal contributes more than 2.5 percent of the total wastewater generated in the Lake Cocibolca sediment deposited in the lake. watershed. In addition, much of this waste is not Origins of Sediment and Nutrient Loads. The collected in sewer systems or treated; therefore, it is principal rivers and streams that deliver sediments difficult to estimate either the nutrient or microbial to Lake Cocibolca have been ranked based on loads delivered to the lake. Based on population the results of the SWAT simulations (Annex Figure and limited monitoring data, we estimated that C.4). The greatest sediment loads are carried by approximately 26 to 38 tons of total P and 135 to streams in the southern part of the watershed, 177 tons of total N are discharged into the lake with lesser but very significant amounts carried by by lakeshore towns in the watershed (Table III.1). 16 These results suggest that at current rates of sedimentation (assuming a sediment density of 1.4 tons/m3 and no outflow of sediment from the lake), over 8,000 years would be required to completely fill the lake with sediment. 17 Equivalent mean values plus/minus one standard deviation are: for sediments, 10.3–25.3 million tons (or 7.7–18.9 tons/ha/yr); for total N, 5,290–9,550 tons (or 3.96–7.15 kg/ha/yr); and for total P, 364–822 tons (or 0.270.62 kg/ha/yr). 38 Figures III.2a. and III.2b. Mean Annual Soil Erosion in the Lake Cocibolca Watershed and Forest Cover 39 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Source: Own estimates based on SWAT simulations. These loads enter the lake as direct wastewater Nutrient Loads from Tilapia Production. Data discharges or as waste discharged into intermittent on net nutrient loads to the lake from tilapia streams throughout the year and carried into the aquaculture in cages have not previously been lake by runoff during the wet season. Previous reported; therefore, in this study estimates were studies have identified a number of tourism-based made using three methods reported in the scientific and agroindustrial sources of water pollution, literature (SUMAFISH 2003, Vista et al. 2006; many of which are assumed to produce significant Phillips et al. 1994; Boyd and Green 1998) for two nutrient loads that may contribute to the observed different rates of tilapia production: the assumed eutrophication of the lake. These include hotels actual production of 350 tons per year and a and restaurants near the lake, dairies and milk possible expansion of production to 3,000 tons per processors, coffee and citrus processors, poultry year.18 For production of 350 tons per year, net total and swine producers, slaughterhouses, sugar mills P loads were estimated to be between 1 and 12 and tanneries. Data required for making even crude tons per year and net total N loads were between estimates of the nutrient loads discharged from 19 and 39 tons per year. These estimated nutrient these tourism-based and agroindustrial sources loads are substantially less than the total loads were not available for this study. from all the cities surrounding the lake. However, 40 Table III.2. Estimated Mean Annual Nutrient Flows to Lake Cocibolca, by Source Total Nitrogen Total Phosphorus Nutrient Flows (tons/year) (tons/year) Non-point sources (runoff and soil erosion from land use)1/ - Nicaragua 3,102–6,090 225–535 - Costa Rica 2,185–3,461 139–287 Municipal wastewater discharge - Coastal towns 135–177 26–38 - Rest of the population2/ 175–329 22–66 Tilapia farming - At the level of production in 2005 (350 tons/year) 20–40 1–12 - At the level of production in 2008 (1,388 tons/year)3/ 75–155 4–48 Livestock/dairy farming n.a. n.a. Notes: 1/ It is assumed that 10–20 percent of soluble nitrogen in lateral flows and groundwater discharge into the lake. 2/ It is assumed that the 10 percent of the nutrient load generated by rest of the population in the watershed (approximately 600,000 people) reached the lake. 3/ OSPESCA 2005 (p. 57) documented plans that existed at that time to expand production capacity to 3,000 tons per year in the medium term. Sources: Based on SWAT simulations. For estimates of nutrient load from tilapia farming, see Annex B. the loads from the cities are distributed around Total Sediment and Nutrient Flows to Lake the lakeshore while tilapia production is localized Cocibolca. One of this study’s main contributions near Ometepe Island. As a result, the local effects is to estimate the relative importance of the of tilapia production may be significant. If future contribution of nutrients from agriculture/ production of the industry increased to 3,000 tons soil erosion, wastewater discharge and tilapia per year, a level discussed in government reports, production (Table III.2 and Figure III.3).20 Sediment net nutrient loads would increase to approximately and nutrient loads from eroded soils in steep parts 8 to 99 tons of total P per year and 166 to 336 of the watershed are an order of magnitude higher tons of total N per year (for details, see Annex B19). than the other two sources, according to the results The wide range of estimated nutrient loads is due of this study. The estimates of nutrient loading to the uncertainty about the quantity of feed and discussed above clearly indicate that runoff and the efficiency of nutrient absorption by the tilapia, soil erosion contribute substantially more nutrients which varies by farming conditions. to Lake Cocibolca than wastewater or tilapia 18 The production of nutrients was estimated using three methods, summarized in Annex B (source: estimates for this study produced by Debels et al., 2009 [pp. 69–71]). 19 According to OSPESCA 2005 (p. 57), there are plans to expand production capacity to 3,000 tons per year in the medium term. 20 It is important to note that the contribution of nutrients from livestock production, dairies and milk production was not estimated due to data limitations, and this would be an important extension of this study in the future. 41 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure III.3. Pollution from Sediment and Nutrients, Coastal Towns and Tilapia Farming Note: The thickness of the streams represents the magnitude of the sediment load reaching the lake (thicker lines denote higher sediment loads). See Figure C.4. Source: Own estimates based on SWAT simulations (for runoff and soil erosion) and based on other estimates (for the other sources). production, although tilapia production levels are when the nutrients are diluted with large amounts growing fast, and if expanded ten times as planned of runoff and direct rainfall onto the lake surface. In by the company,21 this production would become as contrast, nutrient loads from wastewater and tilapia large a source of nutrients as those of a mid-sized production occur throughout the year, although town in the lake’s watershed. It is also important increased loadings from untreated municipal to note that these sources are very different wastes can be carried from streams (where they geographically, temporally, and in terms of activity. may have been deposited during the dry season) The vast majority of nutrient loading associated into the lake with the first large runoff events at with runoff and erosion occurs in the wet season, the beginning of the rainy season. Nutrients from 21 OSPESCA 2006, p. 57. 42 Table III.3. Estimated Mean Annual Nutrient Flows into Lake Cocibolca by Country Nicaragua Costa Rica Item Total (percent) (percent) Watershed area 77 23 13,365 km2 (excludes the lake and islands) Sediment load1/ 16–26 84–74 10.3–25.3 million tons Nitrogen load 59–64 41–36 5,288–9,551 tons Phosphorus load 62–65 38–35 364–822 tons Note: 1/ Sediment load is on average 13.3 tons/ha, which is very high compared to other watersheds. Source: Own estimates based on SWAT simulations. municipal wastewater, dairies, cheese processing, sources per hectare. The Niño, Zapote and Sapoá confined animal production, slaughterhouses, and sub-watersheds in Costa Rica, followed by the Tule tilapia production are deposited into the lake near in Nicaragua, are the highest ranking in terms of the cities and facilities where they are produced. In sediment loads; the Niño, Ochomogo, Tule, Zapote, addition, the nitrogen and phosphorus in municipal and Sapoá in terms of phosphorus; and the El and agroindustrial wastewaters are probably more Dorado, Tipitapa and Ochomogo in Nicaragua, biologically active than organic nitrogen and both followed by the Niño in Costa Rica, in terms of organic and inorganic phosphorus attached to nitrogen (Figure III.3 and Annex C). Wastewater eroded sediments. Both of these factors increase flows from coastal towns, tilapia cultivation in the likelihood that point sources of wastewater floating cages off the shores of Ometepe Island, and tilapia production will have localized negative and livestock are additional sources of nutrients. effects on water quality, especially in the dry Sediment and Nutrient Flows from Costa Rica. season. Less than 23 percent of the Lake’s watershed is Putting All the Sources Together. Most of the in Costa Rican territory, but this study has revealed sediment (but not the nutrients) reaching the lake that it is a source of a very large share of sediment originates in the Costa Rican part of the watershed. and nutrients that flow into the lake from agricultural The Costa Rican part occupies only one-fifth of the lands (Table III.3). The three Costa Rican cantons entire watershed (excluding the area of the lake), within the watershed of the lakes—Upala, La and much of the area is protected through formal Cruz and Los Chiles—are sparsely populated and protected areas and payment for environmental relatively poor. They have a total population of about services (PES) schemes. Nevertheless, this 61,000. Half of the area is devoted to agriculture— study estimates that due to very high slopes mainly rice, oranges, pineapples, tiquizque (a and precipitation, around 74 to 84 percent of native tuber plant) and livestock—and about a the total sediment load originates there. To help third is under forests. No data are available for the inform the prioritization of watershed protection remaining area because of cloud cover (FONAFIFO actions, this study has produced a ranking of the 2005). Cultivation of rice, pineapples and tiquizque sub-watersheds in terms of the contribution of tend to result in high erosion rates in this area with sediment, nitrogen and phosphorus from non-point uneven terrain and high slopes. Despite significant 43 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Table III.4. Potential Reductions in Sediment and Nutrient Loads to Lake Cocibolca under Alternative Scenarios Reduction from Current Levels (%) Scenario Sediment Total N Total P Scenario 1: Reforest all sub-basins with mixed forest: simulation of 99 45 87 conditions with greater forest cover than in precolonial times. Scenario 2: Reforest all areas with mean annual rainfall greater than 1,500 mm: simulation of extensive rural development, creation of protected areas 97 35 74 and/or agroforestry in high-rainfall areas. Scenario 3: Reforest areas with mean slopes greater than 8 percent, install small flood control dams and other erosion control structures: simulation of 90 45 87 extensive rural development, creation of protected areas and/or agroforestry on steep lands. Scenario 4: Reforest areas with slopes greater than 15 percent, convert cropland to zero tillage, fertilize pastures: simulation of extensive rural 88 18 46 development emphasizing reforestation, soil conservation and improved agricultural practices. Source: Own estimates based on SWAT simulations. watershed protection efforts—around 22,000 sediment eroded from croplands, grazing lands and hectares are under conservation—erosion appears stream channels. SWAT can be used to estimate to be very high. According to the estimates from the likely impact of changing land uses in the this study using the SWAT model, 74-84 percent of watersheds on the average sediment and nutrient the total sediment load and about 35-41 percent flows reaching the lake. SWAT was used to simulate of the associated nutrient loads originate in the four demonstration scenarios to determine how Costa Rican part of the watershed (Table III.3). much sediment and associated nutrient loads Application of agrochemicals in areas of intensive to the lake could potentially be reduced through agriculture, particularly in citrus plantations, is a programs, policies and technologies designed further source of contamination but the extent of to protect the watershed and foster sustainable this problem is not clear and requires further study agricultural production. The results of these and monitoring. The Los Guatuzos wetland could scenarios, which have been defined in consultation potentially trap most or even the entire nutrient with the Technical Working Group for the study, load from the Costa Rican section. should be interpreted as being indicative of the Reducing Sediment and Nutrient Flows to the magnitudes of the pollution reductions that may Lake: SWAT Scenarios. The largest sources of be expected rather than as a recommended or nutrients entering Lake Cocibolca are nitrogen and even possible course of action. An ecological and phosphorus dissolved in runoff water and organic socioeconomic assessment would need to be and inorganic forms of these nutrients attached to carried out to define a set of realistic programs. 44 Table III.4 presents the simulated percentage several rivers within the Lake Cocibolca watershed reductions in sediment, total nitrogen and total flow through wetlands located near the lake shore. phosphorus loads reaching Lake Cocibolca The Guatuzos may play a major role in filtering and resulting from the implementation of nutrient- and agrochemical-rich flows from the four conservation scenarios. The results of Costa Rican part of the watershed. Although SWAT simulations indicate that these nutrient this study makes an important contribution by sources can be reduced by at least half through estimating the volume of sediment that could be reforestation or establishment of agroforestry filtered by a wetland like Guatuzos, the lack of systems on highly erodible lands, especially in information about the wetland’s hydrology and the high rainfall areas; implementation of farming and river flows prevents an accurate assessment of grazing management practices that protect the soil filtration capacity and estimation of the value of and reduce runoff and erosion; and installation this important eco-service. of structural practices such as terracing, runoff Sensitivity Analysis of the Results in Terms of retarding/sediment trapping structures, and small the Effects of Climate Change. Climate change reservoirs to harvest water during the wet season is expected to have major effects on many for use in the dry season. INTA and MAGFOR have ecosystems worldwide during the course of the 21st the necessary technology to accomplish these century. Projections for changes in mean annual goals; however, long-term rural economic and temperature and precipitation over the Cocibolca environmental development programs are required watershed by 2050 (derived from the results in order to provide incentives and training for of 16 general circulation models for 6 climate farmers to implement the necessary practices. change scenarios) give a mean temperature Successfully implementing such programs will increase of 1.64o C and a mean decrease in annual likely require the cooperative efforts of local precipitation of approximately eight percent. nongovernmental organizations, local and national Alhough the projections for temperature change governments, and the donor community. produced by the 16 models are similar (almost all Using Wetlands as Filters. Both natural and between 1o C and 3o C increase), the projections constructed wetlands can remove significant for precipitation changes vary greatly among the amounts of sediment and dissolved nutrients different models (from approximately -50 percent from the waters that flow through them and enter to +20 percent). into Lake Cocibolca. Processes responsible for Climate Projections Concur that Higher this removal include sedimentation, nutrient Temperatures will Produce Substantially Greater uptake by plants, and denitrification in anaerobic Evaporation from the Lake and its Watershed. sediments. In the case of the Cocibolca watershed, This may be exacerbated by reduced annual at present little is known about the nutrient filtering precipitation rates, which are projected by the capacity of its existing natural wetlands, which also majority of the models. However, an increase in support many plants and animal species, and their precipitation could mitigate or even reverse the potential in improving the lake water quality if they effects of increased temperatures on the general are restored and/or rehabilitated. What is known water balance. Other important uncertainties are is that the great majority of annual sediment and the effects of climate change on the length and nutrient loads to Lake Cocibolca are carried by intensity of wet and dry seasons, as well as the high stream flows during the wet season and that 45 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) future frequency and magnitude of extreme events a decrease in precipitation. This study has found such as tropical storms and hurricanes. Despite that the flow of sediment and the associated these uncertainties about the future climate, nutrient load are far more sensitive to precipitation SWAT was used to analyze the sensitivity of several than temperature changes. Global climate models climate change scenarios on hydrology, soil erosion diverge in their regional predictions of how and nutrient loads for the Cocibolca watershed. precipitation patterns would change in the area of Figure III.4 shows the estimated changes in the watershed, ranging from a 20 percent increase sediment and nutrient loads into Lake Cocibolca to a 50 percent reduction. Even though most under four climate change scenarios. The analysis models concur on a reduction in precipitation, it suggests that the probable effects on runoff and is unclear how the seasonal rainfall pattern would sediment yield of a 1.64°C increase in temperature change. Understanding how the distribution of combined with no change in precipitation are small rainfall would shift throughout a year with climate in comparison with the effects of the temperature change—whether rainy months would become increase combined with a decrease in precipitation; even rainier or whether only dry months would a reduction of 18 percent in annual precipitation receive more rain and vice versa—is what matters leads to decreases of more than 42 percent and for understanding what would happen to the water 38 percent in mean annual runoff and sediment balance and contamination impacts. Extreme yield, respectively. weather events, which are likely to increase in their Climate change could significantly affect the water frequency and severity, may further compound balance and severity of the sedimentation problem the sedimentation problem of the watershed’s for the lake. Regional climate models predict an fragile soils and increase the risk of landslides in increase in temperature and either an increase or degraded areas. Figure III.4. Estimated Impacts of Climate Change on Flows into Lake Cocibolca 15% 5% Change from Baseline -5% -15% -25% Surface runoff Sediment load -35% -45% 3% 0% -4% -18% Precipitation Change Note: All scenarios assume a 1.64o C temperature rise. Source: Own estimates based on SWAT simulations. 46 In the absence of scientific certainty, the future precipitation scenarios. A wiser decision precautionary principle would suggest that might be to implement programs that will enhance the possibly adverse future impacts of climate resilience and adaptive capacity, and mitigate change on the watershed’s sustainability increase the effects of both probable climate change and the urgency to identify win-win solutions and existing weather variability, such as droughts, understand and implement wetland protection tropical storms and hurricanes. Such programs measures. In view of the great differences among could promote soil and water conservation on climate change models with regard to predicted agricultural lands and reforestation of steep lands future precipitation, it would be difficult for decision and stream corridors to minimize erosion and makers to implement programs based on specific stream bank degradation. 47 IV. Setting Research Priorities This study has built upon the results of previous substantial uncertainty in the amounts of efforts, including the TWINLATIN and Procuenca phosphorus (and to a lesser extent, nitrogen) in San Juan projects, has trained a multi-institutional eroded sediments. This is of concern because team of experts, and has implemented the SWAT many of the soils, especially in steep landscapes, model for the current baseline and several future are highly erodible and of volcanic origin, and land use, soil conservation and climate change volcanic soils are quite variable in phosphorus scenarios. As a result, future analysis of other content. scenarios, more detailed studies of specific sub- • No data were available on pesticide use, and basins, and improvements in natural resource data time was insufficient to conduct adequate can be implemented quickly and cost-effectively. assessments of pesticide losses from rice and This section describes the research priorities that other intensive agricultural systems. have emerged from the modeling efforts and • Lack of detailed information concerning stream dialogue with local and international experts in the interactions with wetlands prevented any course of this study. attempt to simulate the effects of natural or Limitations of this Study. It is important to point constructed wetlands on nutrient loads to the out several shortcomings of the analysis so that lake. A preliminary assessment of the ability they can be addressed in future analytical efforts. In of wetlands to reduce sediment and nutrient spite of these limitations, the study has contributed loads would be feasible if data were available to a better understanding of the watershed’s that describe the size, depth and hydrological environmental pressures and of the key gaps in connectivity of these wetland sites. the monitoring data that would permit much more • Attempts to predict the impacts of climate change robust modeling and a better understanding of the on hydrology and water quality in the watershed watershed’s environmental pressures in the future were limited by uncertainties about the effects of (Table IV.1). global climate change on regional precipitation • Limited hydrometeorological and stream water patterns and intensities. However, the results quality monitoring data do not allow for adequate show how SWAT can be used to estimate the model input and for calibration and validation of likely interactions of land use and soil and water model results. For this reason, expert judgment conservation practices for different climate was used with limited stream water quality data change scenarios, thereby helping decision to evaluate and improve model performance. makers design programs to mitigate the negative • The available representation (GIS layers) of land effects of a range of possible climate conditions. use/land cover for the Lake Cocibolca watershed Despite these limitations, the general conclusions could not be verified with ground truthing data of this analysis are thought to be reliable. In addition, during the limited time available for the study. nearly all these limitations can be addressed in In addition, the different land use classification more detailed studies by the team of Nicaraguan schemes used in Nicaragua and Costa Rica made SWAT specialists trained during the study, assisted data integration and interpretation difficult. as necessary by consultants with experience using • The soil characterization data available for the SWAT in other parts of the world. modeling exercise were very limited, causing 49 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Table IV.1. Key Technical Findings of the Study, the Extent of Certainty and Future Research Degree of certainty of the finding, Contribution of the study and Finding in this study given the scientific required follow-up research understanding and data availability Water quality monitoring is the most important A systematic monitoring strategy strategic priority because much better data are with clear funding sources and High essential for assessing water quality trends and institutional arrangements is building a lake model to assess how contaminants urgently needed move through the lake. This was well known before this study but there were Sediment production in the High no consistent estimates for all sub-watersheds using watershed is very high the same methodology. Most sediment originates in the High This understanding is a key contribution of this study. Costa Rican part of the watershed Most nutrients originate in the Soil studies are needed to ascertain nutrient loads in Medium Nicaraguan part of the watershed sediment runoff. Limnological (algae) studies are needed to improve understanding of whether the lake is eutrophic and Lake is becoming eutrophic High systematic monitoring is needed to assess current and future trends. Water treatment costs could double, but other Eutrophication will result in high alternative sources of water supply and the scope water treatment costs in the Low for efficiency gains using current sources need to be future assessed. Bacteriological contamination in some areas poses health risks Systematic water quality monitoring data and from direct contact in recreation Low assessment of exposure channels and health for vulnerable populations (e.g., statistics for the exposed population are needed. swimming for children) Agrochemical application in Data on field application of pesticides (no data on intensive agriculture (rice and actual application practices are available apart from sugarcane farming) causes Uncertain the amounts recommended by MAGFOR and INTA) localized contamination in the lake are needed, as is systematic water quality monitoring and affects its ecosystems to assess leakage from fields to water bodies. Wetlands filter some of the load of nutrients and Protection of key wetlands (Los agrochemicals and could potentially filter the entire Guatuzos) mitigates contamination load from the Costa Rican part of the watershed, but with nutrients and agrochemicals, Medium hydrological assessment of water circulation in the and has additional benefits wetland area is needed to estimate the magnitude of (wildlife habitats, ecotourism, etc.) filtration potential and devise wetland management strategies. 50 • Monitoring Needs. Several previous studies and lake modeling and data management will have emphasized the need for an adequate we be able to achieve a better understanding hydrometeorological monitoring network and of the actual status of lake water quality and consistent long-term lake and stream water confidently predict the impacts, both positive and quality monitoring. In addition, this study negative, of future socioeconomic, technological emphasizes the importance of accurate and climate changes. However, few institutions information about soils, land use and agricultural have the responsibilities and capabilities to practices. Adequate input data sets on these implement such an integrated program. Working basic environmental parameters, including time together, the institutions that participated series data on past changes in land use and in this study have such capacity. CIRA-UNAN agricultural practices, are essential for realistic has a long history of water quality monitoring simulation of the different processes influencing and related limnologic research, and it has hydrology and water quality. However, when such recently begun calibration of the PC-Lake lake data are available and the SWAT model has been water quality model for Lake Cocibolca. CIEMA calibrated and validated, the user will be able to was the host of the TWINLATIN project that confidently predict the environmental effects of collected and systematized much of the data possible future technologies and policies. used in this project. INTA and MAGFOR have an • Future research involving systematic monitoring excellent understanding of agricultural and soil of water quality, studies focusing on blue-green conservation practices. INETER has responsibility algae growth and the associated toxicity levels, for the generation and administration of much bathymetric studies, and modeling of water (and of the natural resource data needed for both contaminant) movement throughout the lake research and policy development. MARENA is are needed for definitive conclusions about the responsible for implementation of environmental severity of current and future eutrophication policies, and MINSA and ENACAL are keys to levels. promoting public health. A team of specialists from these organizations, working together with • Modeling Needs. In addition, any long-term their counterparts in Costa Rica and supported effort to understand and manage Lake Cocibolca by donor agencies, can provide decision makers requires the implementation of a lake model with the information needed to wisely manage with the capability of simulating spatial and Lake Cocibolca and its watershed. temporal dynamics in water quantity and quality, including mixing, nutrient cycling, chlorophyll • Certainty about the extent of the impacts concentrations, and (eventually) microbial and estimated in this study and the associated fish population dynamics. Data from stream economic costs varies depending on scientific and lake monitoring programs and watershed certainty and the available data. The results of the models such as SWAT will be needed to provide modeling effort have helped advance scientific inputs required by the lake model, which can be understanding and establish some priorities, but used to simulate both past and possible future precise estimates need to be interpreted with changes in lake water balance, hydrodynamics significant caution because the model has not and water quality. been calibrated. The model’s outputs have been compared to the scarce available monitoring • Institutional Responsibilities. Only with an data whenever possible and the international integrated program of monitoring, watershed 51 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) and local experts involved in the study concur models such as SWAT will be needed to provide with the results, but the limited data availability inputs required by the lake model, which can be has prevented calibration of the model and used to simulate both past and possible future estimates of pollution loads need to be taken as changes in lake water balance, hydrodynamics and indicative measures of magnitude rather than water quality. Only with an integrated program of as precise estimates. Furthermore, the degree monitoring, watershed and lake modeling and data of certainty with respect to the technical findings management will it be possible to achieve a better from this study varies depending on the extent of understanding of the actual status of lake water the scientific understanding and data availability quality and confidently predict the impacts, both to assess the severity of the environmental positive and negative, of future socioeconomic, problems and their likely social, environmental technological and climate changes. Implementation and economic impacts. Table 8 summarizes the of a long-term monitoring plan, which includes areas of greater and lesser certainty. both Nicaragua and Costa Rica, and which involves Filling the Critical Knowledge Gaps. Any long- both the lake and its watershed, would need term effort to understand and manage Lake to begin now in order to generate the baseline Cocibolca requires the implementation of a lake data for future assessments of the watershed’s model with the capability of simulating spatial and health. As a follow-up to this study, efforts have temporal dynamics in water quantity and quality, begun to prepare an atlas of the Lake Cocibolca including mixing, nutrient cycling, chlorophyll watershed and the environmental database, concentrations, and (eventually) microbial and collected through the TWINLATIN project and this fish population dynamics. Data from stream and study, in a format that would be easily accessible lake monitoring programs and from watershed by Nicaraguan experts and decision makers. 52 V. Setting Policy and Investment Priorities This section describes the priorities in a policy and on the potential to develop off-farm employment investment agenda that has emerged from this through sustainable tourism in some parts of the study. In the broad array of policy measures and watershed. In addition to the land use changes investments in protection of the Lake Cocibolca discussed here, there is also a need to reduce the watershed, investments in win-win options with inflow of untreated effluents and agrochemicals high benefits apart from reducing the risk of and, to a lesser degree, manage nutrient flows eutrophication are a priority. Figure V.1 details some from aquaculture in tilapia production of tilapia. of the priority policy measures and investments to Protection of Los Guatuzos and other wetlands in tackle the watershed’s environmental pressures. the watershed appears as another major win-win We focus in this section on the approaches to reduce option with global and local environmental benefits, the pressure from extensive farming, primarily by and with local developmental benefits. providing incentives for changes in land use, and Figure V.1. A Range of Solutions to Reduce Pressure on the Watershed Source of Pollution/Ecosystem Risks Extensive Farming Intensive Wastewater Degradation of Tilapia Farming (Crops and Cattle) Agriculture Discharge Wetlands Possible Solutions - Policies and Investments Shifting to sustainable Investing in Continuous agriculture and wastewater monitoring of water Implementing and Improving application intensive farming treatment, adequate quality in areas of integrated wetland of agrochemicals systems by operation and tilapia production management, by strengthening addressing credit maintenance of by MARENA and/or restoration and extension services, constraints, improving existing systems, independent parties; protection plan better labeling, access to markets, ensuring financial monitoring of potential in the watershed; information, infrastructure, sustainability risks to the native assessment of the education, control providing incentives, of the systems; fish species; and wetlands’ ecological of the stocks and developing strengthening thorough assessment functions, and of the of outdated alternative regulation and of further expansion potential to develop agochemicals employment such as coordination among and alternative tilapia sustainable tourism ecotourism etc. municipalities farming methods 53 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) nutrients to the lake. Extensive pastures are even Supporting Sustainable Land Uses: more prevalent than in the rest of the watershed. Payment for Environmental Services Previous experiences with efforts to induce Investment in wide-scale soil conservation and farmers to change their land uses, in Nicaragua reforestation is unlikely to be justified solely and elsewhere in the region, have often proved to on the basis of the benefits from water quality be disappointing (Pagiola 2003). Such efforts have improvement. Given the uncertainty about the often resulted either in limited adoption of the extent to which eutrophication may be occurring, recommended land uses, or in adoption followed the uncertainty about the use of the lake as a by abandonment. As long as damaging land uses source of drinking water, and the scarcity of public remain the most profitable for farmers, any effort funding, investments in wide-scale soil and forest to induce changes in land use will encounter conservation measures are not likely to be justified considerable resistance. Regulations that either solely by the benefits from reduced nutrient flows. ban damaging land uses or force the use of benign The balance may tilt in favor of watershed protection land uses are common but have proved to be investments in the presence of additional benefits largely unenforceable. For example. such as the improvement of agricultural productivity New Instruments. Recent efforts have shown that from soil conservation measures, health benefits inducing sustainable land use changes is possible from the protection of local drinking water supplies with the right combination of incentives. The through the establishment of conservation areas, experience of the Regional Integrated Silvopastoral or benefits to ecosystems. The balance may also Ecosystem Management Project, which was shift in favor of conservation if high shares of the financed by the GEF and implemented by the World total nutrient load can be abated at a relatively low Bank from 2003 to 2008 in the Matiguás-Río cost, and are deemed by the public and decision Blanco area,22 is particularly instructive (Pagiola makers to be worth paying solely to reduce the risk et al. 2007). The Silvopastoral Project used PES to of eutrophication. induce the adoption of silvopastoral practices in Challenges to Inducing Land Use Change. degraded pasture areas. In four years, nearly half Appropriate land use changes within the lake’s of the total area at the project site experienced watershed could result in substantial reductions in some form of land use change, ranging from minor sediment and nutrient flows to the lake. However, changes such as the sowing of improved grasses land use is easier to change in a model than on in degraded pastures to very substantial changes the ground. Although many land use practices that such as the planting of high-density tree stands or could substantially reduce pressure on the lake the establishment of fodder banks. The degraded exist, they have been adopted only to a very limited pasture area fell by over 80 percent, as did the extent. The scale of the challenge is illustrated natural pasture area without trees. The greatest in Figure V.2 which shows the land uses in the increase was in the pasture area with high tree watershed that contribute the most sediments and density. The fodder bank area also increased 22 This site is outside the Lake Cocibolca watershed, but its agroecological and socioeconomic conditions are very similar to those found in many parts of the watershed, particularly on the eastern side of the lake. 54 Figure V.2. Land Uses in the Watersheds that Contribute the Most Sediments and Nutrients to Lake Cocibolca Forest Pastures 1,2000 Tree crops Irrigated crops 1,000 Annual crops 800 Hectares 600 400 200 0 s o es pa e a no te te re og l po Tu po ta al za Ni lo m Sa os ay Za na Do ho ol M ua e/ c Oc Te eg at Oy p Te Source: Based on data from MAGFOR and INETER collected during the TWINLATIN project and this study. sharply, as did the extent of live fencing.23 In used by the project only succeeded in inducing the addition to bringing on-site benefits such as adoption of practices that had high long-term on- improved milk production, these are all changes site benefits for farmers. Many land uses that would that would significantly reduce pressure on the lake have provided significant environmental benefits, by reducing erosion and water contamination.24 such as riparian forests, were only adopted to a Refining the PES Approach. Although the PES very limited extent, or not at all. Second, even short- approach as implemented by the Silvopastoral term PES are only possible if there is a suitable Project in Matiguás-Río Blanco has proved to be funding source. Based on this experience, the very successful, it also faces some significant possible land use changes that would help protect limitations. First, the short-term PES approach the lake can be divided into three groups, as shown in Figure V.3.25 23 Similar results were observed at the other project sites in Colombia and Costa Rica. 24 Measurements made at the project’s Colombia site showed a rapid drop in turbidity, biological oxygen demand (BOD) and coliform counts when riverbanks are reforested and protected from livestock entry, as well as the return of invertebrates indicative of unpolluted water. 25 Identifying the specific practices that fall within each group will require further work. Because of differences in local soils, climate conditions and other factors that affect productivity, and in access to markets and other factors that affect returns, the list may vary in different parts of the watershed. Manuals of improved land use practices developed by INTA in collaboration with PASOLAC provide a good starting point, as do data collected by the Silvopastoral Project. 55 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure V.3. Possible Patterns of Returns to Farmers from Adopting Land Uses that Protect Lake Cocibolca Note: C$/ha denotes Cordobas per hectare, and “t� denotes time. Source: Pagiola (2009). • Win-win practices that are sufficiently profitable A Three-pronged Strategy. These results suggest a for farmers26 so that they are likely to adopt them three-pronged strategy to interventions designed to even without external support (alternative A). protect Lake Cocibolca, targeting each of the broad Adoption of these practices can be accelerated alternatives.27 by providing access to credit and to technical • Win-win land uses. A strategy to encourage the assistance (TA). adoption of win-win agricultural practices could • Practices that, once established, are profitable be implemented watershed-wide by making for farmers but are unattractive to farmers credit and TA available. This would be a “no because of their high initial investment costs regrets� strategy, in that the on-site benefits (alternative B). Adoption of these practices can alone would justify it, even if the benefits to the be induced with short-term PES as used in the lake are low. Silvopastoral Project. • Short-term PES. Adoption of practices that, • Practices that are not profitable for farmers, even once established, are profitable to farmers can once established (alternative C). Farmers will not be induced with a short-term PES program. adopt these practices on a long-term basis even if The challenge to this part of the strategy is to they receive an annual compensation for doing so. secure financing to make the necessary short- 26 Profitability here is measured relative to the most profitable alternative, not in absolute terms. 27 Similar strategies are being adopted in the World Bank- and GEF-financed Brazil Espírito Santo Biodiversity and Watershed Conservation and Restoration Project and Colombia Mainstreaming Sustainable Cattle Ranching Project. 56 term payments.28 Because many of the same water supplies from surface and ground water practices also generate substantial biodiversity sources that later flow into the lake. These water and carbon sequestration benefits, it may be users could finance long-term PES mechanisms possible to secure at least partial financing from aimed at conserving their individual water supply GEF or from sales of carbon credits. Because areas. the payments required are only short term, such Box 4 gives an example of such water users a program could also be financed with donor and of what would be involved. This would bring support. The program should be targeted to the them direct benefits by preserving or improving watersheds that have been identified as being their water supplies, and also contribute to particularly significant sources of sediments and protecting the lake by reducing at least some of nutrients discharged into the lake. the sources of contamination. Nicaragua already • Long-term PES. Land uses that, because of their has considerable experience in developing such nature or location, are particularly valuable for local PES mechanisms, with active mechanisms protecting the lake, such as riparian forests,29 in San Pedro del Norte (Chinandega), Regadío, but that provide low returns to farmers require San Luis de los Andes (Estelí), and Quilalí (Nueva a long-term PES program. Financing such a Segovia) (Marín et al. 2006; Obando 2007). To program is particularly challenging because assess the potential for such mechanisms in the the required payments to farmers would have Lake Cocibolca watershed, a partial inventory was to last indefinitely. Therefore, this program conducted in three of the sub-watersheds that flow could not rely on funding from donors, because into the lake: Ochomogo, Malacatoya and Mayales. such funding is always of limited duration. The Table 7 shows the principal water users that have obvious source of financing would be those who been identified in these watersheds. Of these, one stand to benefit from these protective actions, town (Juigalpa) and two irrigation systems in the namely the users of Lake Cocibolca. Because Mayales watershed obtain their water from the these users would receive a stream of benefits, lake. All the other users are potential candidates in the form of lower water treatment costs, from for local PES mechanisms that would protect their a lake in good condition, they could provide a water sources. Such local interventions would not stream of financing. However, because the most by themselves solve the problem, but they would important uses are potential future ones, it will contribute to doing so, together with the other be difficult to secure funding in the short and prongs of the strategy. medium terms. Linkages to Poverty. Many of the priority Local PES Mechanisms. In the meantime, watersheds for interventions have high poverty however, many individual water users within the rates. As shown Figure V.4, poverty rates are high Lake Cocibolca watershed currently obtain their 28 The experience of the Silvopastoral Project suggests that payments of US$30 to US$80/ha for two to four years may be needed. 29 In principle, land users are required by law to maintain forest cover within 50 m on either side of a river or stream. However, this law has proved to be unenforceable. Moreover, if the law were enforced it could cause significant hardship to small farmers who might lose the use of large portions of their land. It is worth noting that many PES programs, such as those in Costa Rica and Mexico, are paying land users to maintain forest cover even though deforestation is illegal. 57 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Box V.1. Protecting Santa Lucía’s Water Source The community of Santa Lucía, which has a population of about 19,000, currently obtains its water from two nearby wells, but this source is insufficient for its needs. With the support of Japanese funding, it has built a small dam on the Sarco River, some 3 km away, and an aqueduct to bring water by gravity flow to the town. However, the community has been unable to use this water because it has high levels of bacteriological contamination resulting from livestock production along the Sarco River: livestock come directly to the riverbanks to drink. Improving water quality would require ensuring that livestock are kept away from the river. This could be achieved by simply fencing off a riparian corridor of suitable width and allowing natural vegetation to regenerate, and building watering points outside it for livestock to use. The area that would need to be protected in this way is between 10 and 50 ha, depending on the desired width of the riparian corridor and how far upstream it needs to extend. Assuming that an annual payment of about US$100/ha is needed to compensate land holders for the opportunity cost of the lost grazing areas, the annual cost to the town would be about US$1,000–5,000, or about US$0.05–0.20 per inhabitant. Because the Sarco River is a tributary of the Malacatoya River, its water ultimately flows into Lake Cocibolca. By improving water quality in the SarcoRiver, therefore, a local PES mechanism in Santa Lucía would contribute to improving water quality in both the Las Canoas dam and Lake Cocibolca. Table V.1. Principal Water Users in Selected Sub-watersheds of the Lake Cocibolca Watershed Watershed Water User Ochomogo Malacatoya Mayales Townsa Population 1,000–5,000 2 6 2 Population 5,000–10,0000 0 Population >10,000 1 1b 1 Population with water service 28,000 41,000 21,000 Irrigation Number of systems 2 1 2b Total area irrigated (ha) 890 3,500 1,140 Hydroelectric power plants Number 1 Installed capacity mega-watts (MW) 1.8 Notes: a. Total population and population with water service according to 2005 census b. Pumped water from Lake Cocibolca Source: Preliminary inventory of water users in Lake Cocibolca watershed. 58 throughout the watershed, reaching as high as and providing an additional income stream, the 90 percent in some areas. With the exception of proposed strategy could thus help alleviate poverty Mayales, all the watersheds that contribute the in these areas. Although there has often been most sediments and nutrients to the lake have concern over the ability of poorer households to poverty rates above 50 percent. In fact, all but two participate in PES programs, the experience of have extreme poverty rates above 50 percent. No the Silvopastoral Project in Matiguás-Río Blanco corresponding estimates have been carried out for suggests that poorer households are in fact able to the Costa Rican portion of the watershed. However, participate (Pagiola and others, 2008). Indeed, by most of the area in the Costa Rican portion of the some measures poorer households participated in watershed scores very low on the country’s Social PES to a greater degree than better-off households. Development Index (�ndice de Desarrollo Social, Changing Land Use on the Costa Rican Side. IDS). By increasing their on-farm productivity Because a significant proportion of the sediment Figure V.4. Extreme Poverty Rates in the Lake Cocibolca Watershed Source: Based on 2005 poverty mapping data reported in World Bank Poverty Assessment for Nicaragua, 2009. 59 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) and nutrient flow to the lake comes from the Costa River, as one of the best opportunities to develop Rican portion of the watershed, land use changes ecotourism (Barany et al. 2001). Increasing off- are also necessary there. Nearly all of the area in farm rural employment through the development the Costa Rican portion of the watershed is eligible of ecotourism, cultural tourism and other forms of for payments under the country’s PES program. sustainable tourism can help protect the natural At present, about 22,000 hectares are under resource base by reducing the pressure on soils, PES conservation contracts in this area. However, forests, biodiversity and water resources. because the Costa Rican program focuses The tourism sector has grown rapidly in Latin primarily on forest conservation, it can help avoid American countries over the last decade and has further damage but is poorly suited to reverse become an important source of foreign exchange existing damage. The reforestation contract that it and an impetus for overall economic growth. offers has never been very attractive to land users, Tourist arrivals rose by about 68 percent worldwide and the newer agroforestry contract has also had over the 1995–2007 period and by about 50 limited uptake (Pagiola 2008). A map overlay percent in Latin American countries (Fayissa et shows that many of the hotspots of soil erosion al. 2009). In Nicaragua, tourist arrivals more than are already within protected areas or areas under doubled from 1995 to 2007, and nearly tripled PES schemes (Annex Figure C.2). Therefore, a in Costa Rica. In 2008, tourist arrivals reached special effort may be needed for the PES program 858,000 in Nicaragua and 2.3 million in Costa to contribute significantly to reducing pressures on Rica. The tourism sector makes an increasingly Lake Cocibolca. large contribution to the overall economy and foreign exchange earnings. Nicaragua’s receipts from the tourism sector grew nearly fourfold in Supporting Off-Farm Employment: absolute terms from 1995 to 2008, rising from 3.2 Realizing the Watershed’s Potential for to 5.6 percent of GDP. The 2008 tourism receipts Sustainable Tourism in Nicaragua reached US$276 million, or nearly 12 percent of total exports (INTUR 2008; World Bank The provision of direct economic incentives through 2008). In comparison, the 2008 tourism receipts PES programs and investments that help intensify in Costa Rica of US$2.1 billion were more than agricultural production in the watershed are two seven times higher than those in Nicaragua and ways to help reduce the pressure from extensive constituted around 18 percent of the country’s crop and cattle farming. Another way to help total exports. achieve more sustainable use of natural resources is by supporting the growth of environmentally Recent studies show that growth of the tourism sustainable off-farm activities. The Lake Cocibolca sector has contributed to overall economic watershed is part of the corridor that passes growth and development in Latin American from Lake Managua south to the San Juan River, countries. A cross-country econometric study which was recognized as the best opportunity in of the determinants of economic growth in 17 the country for ecotourism development (Aviles Latin American countries over the 1995–2004 2000). The Ministry of Tourism (INTUR) has period found that a 10 percent increase in the acknowledged ecotourism projects in the Lake spending of international tourists leads to a 0.4 Cocibolca watershed, including Ometepe Island, percent increase in GDP per capita (Fayissa et al. the Solentiname Islands, and the San Juan 2009: 13). Another study examined the growth 60 performance of Nicaragua and found that of the et al. 2001). According to the results of a 2008 three sectors, including agriculture, manufacture, survey of tourists, half of the tourists arrive mainly and tourism, the latter offered the largest potential for recreation, and around one-third may engage in to generate foreign exchange earnings, increases nature-based activities, although the survey results in job creation, increases in economic expansion may be biased (INTUR 2008).30 As part of the and impacts on income distribution (Vanegas and overall growth strategy that seeks to maximize the Croes 2007). The coffee and manufacturing sectors benefits from the tourism sector, ecotourism holds have also played an important role in the country’s the promise of delivering environmental benefits, overall growth, but the impact of the tourism sector in addition to well-documented economic and was found to be higher. The findings of this study important social benefits. The passage of legislation have also suggested that a five percent increase in in 1999 that allowed the establishment of private tourism receipts leads to a 3.1 percent decrease wildlife reserves in Nicaragua has facilitated in poverty in Nicaragua. Other studies have found domestic and foreign investment in ecotourism- high potential benefits to the poor associated with based enterprises. The Domitila Private Wildlife an increase in tourism spending (Box V.2). Thus, Reserve in the Lake Cocibolca watershed has the tourism sector can become a powerful driver become Nicaragua’s first legally recognized private of pro-poor growth in Nicaragua and elsewhere reserve. Because public resources for financing because of its strong potential to create jobs and and management of protected areas are severely stimulate agricultural production in marginal areas, constrained in Nicaragua, the development of a the traditional sector (handicrafts and souvenirs) well-functioning network of private reserves can and transport services. play an important role (Barany et al. 2001). Ecotourism is thought to be the fastest-growing Just as the benefits to the poor from ecotourism segment of the Nicaraguan tourism industry (Barany projects are not automatic, neither are the Box V.2. High Multiplier Effects and Potential Benefits to the Poor from the Tourism Sector A recent study has assessed the effects of tourism spending on the incomes of the poor in Panama, using the data from 2007–2008 tourism surveys and a household income and expenditure survey. The study found that growth of the tourism sector has had the highest multiplier effect on the overall economic growth than any other sector, even including the Panama Canal and the Colón free economic zone sectors. This is explained by the tourism sector’s strong reliance on inputs from the primary production sector and from other service sectors. The share of income earned by the rural poor and indigenous groups was found to be highest in areas where they constitute the largest share of the labor force. Thus, the poor may benefit from the growth of the tourism sector, but these benefits cannot be assumed because they are not automatic. Survey data at the level of tourist destinations and enterprises are needed to ascertain the share of the benefits that reach the poor in each particular case. Source: Klytchnikova and Dorosh (2009). 30 Of the 12,454 tourists interviewed in 2008, 50 percent responded that vacation/recreation was the purpose of their trip. Of the 4,193 survey respondents who answered the question about the activities they undertook during the trip, 33 percent replied that they went hiking, 25 percent went surfing, 18 percent climbed volcanoes, 9 percent went kayaking, 6 percent went cycling, and 8 percent engaged in other activities. It is unclear whether the answers of the other respondents are missing and therefore affected by the non-response bias, or whether respondents did not engage in these activities (INTUR 2008). 61 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) benefits to the environment. The links between wastewater discharge standards and providing the tourism sector and the environment can go in economic incentives and technical assistance to two directions: the ecological footprint of tourism facilitate compliance. ENACAL is the main entity through its potential adverse effects, and the in charge of developing wastewater projects in the potential of nature-based tourism to stimulate Lake Cocibolca watershed. ENACAL’s 2008–2012 the local economy, generate jobs and earmark Institutional Development Plan—the company’s financing for the management of protected investment plan—has prioritized the extension of areas. The government has an important role the sewerage system and the upgrading of the to play in providing regulations and certification wastewater treatment plant in Granada, with a total for ecotourism enterprises and in monitoring investment cost of around US$20 million. Financing compliance with environmental standards. Local sources for half of the necessary investment have communities need to be active participants in been identified. ENACAL is also jointly working the development of regional and local ecotourism with an NGO and MARENA to provide sewerage strategies, in order for these projects to be and wastewater treatment for the town of San successful and beneficial for the local populations. Carlos. MARENA is currently developing a strategy to enforce industrial enterprises’ compliance with Reducing Pressures from Point Sources wastewater discharge standards. of Pollution Through Improvement in International experiences, such as the mandatory Wastewater Treatment and Through disclosure of enterprises’ air and water pollution data in Indonesia and the publication Stronger Environmental Regulation of information on the status of environmental Reducing contamination from point sources, such as licenses in Mexico, show that public disclosure of industrial and municipal wastewater sources, is an environmental information can be very effective in urgent priority where contamination has high health strengthening enforcement and creating a culture and environmental costs. The solution is threefold: of compliance (Box V.3). In Nicaragua, public (i) extending access to sewerage, (ii) improving the disclosure is likely to be particularly effective maintenance of wastewater treatment facilities, because of the strong support by national- and and (iii) reducing industrial pollution by enforcing local-level decision makers and community Box V.3. Public Disclosure can be an Effective Way to Strengthen Compliance Mechanisms to disseminate information in an easily interpretable manner can allow communities to function as informal regulators. Such mechanisms also promote accountability on the part of those being regulated. An example is the pioneering public disclosure scheme in Indonesia (PROPER), which encouraged firms to clean up their air and water pollution. In a second phase of the program, the government made the disclosure program compulsory. Other examples of accountability mechanisms include actions implemented by the government in the Mexico Programmatic Environment Development Policy Loan. These include public disclosure of funds returned to municipalities for water treatment investment programs to encourage greater scrutiny and accountability on the part of the public and the requirement to post on the Internet the processing status of all environmental licenses. The requirement is intended to improve the transparency of government procedures, thereby reducing nontransparent practices. A transparency law that was passed in 2001 greatly facilitated these actions (Ahmed and Sánchez-Triana, 2008). 62 leaders for environmental education, and to be an An investment and policy agenda for the lake’s opportunity to mobilize grassroots environmental watershed will need to include the following key monitoring initiatives through better provision of elements: (i) institutional strengthening, including environmental information. Legal environmental the establishment of the institutional framework, actions tend to be effective in countries with strong a sustainable and ongoing monitoring program for legal frameworks and enforcement mechanisms, water quality and quantity, and the strengthening such as the experience with the public prosecutors of environmental regulation and public access model in Brazil, and less effective in countries to environmental information and education; (ii) that face serious enforcement challenges. introduction of measures to support a shift to more sustainable agriculture in extensive and intensive farming systems; (iii) a comprehensive wetland Strengthening Water Resources Governance management plan as part of the overall framework and Institutions for integrated water resources management in Much progress needs to occur in enhancing the watershed; and (iv) investment in wastewater adaptive water governance in Nicaragua and in treatment, with an emphasis on financial particular the Lake Cocibolca watershed, including sustainability and on overcoming coordination the strengthening of the institutional and regulatory challenges among neighboring municipalities to framework for water resources management. ensure adequate maintenance of the system. Many Important steps in this regard have taken place. of the priority measures—in particular, reducing At national level, an institutional and regulatory the degradation of the watershed’s soils through framework has been worked out under the new improved pasture management and agroforestry Water Law, but implementation still needs to be or afforestation programs—have great potential carried out. At the municipal level, local actors to store carbon in soils and trees, apart from the are actively engaged in the process of planning potential increases in agricultural productivity. The watershed protection actions. Making the National large scope to reduce carbon emissions, the local Water Authority (ANA) and the Secretariat of the benefits to farmers, and environmental benefits to Cocibolca Watershed Commission operational, the lake make it a potentially large source of win- and establishing clear coordination mechanisms win-win options with these three types of benefits. among municipalities in the watershed, are the The lake’s watershed is uniquely suited to become crucially needed institutional bases for watershed a pilot region for pushing the envelope on innovative protection. A good foundation for integrated water carbon finance mechanisms for carbon storage in resources management exists in Nicaragua and soils. several institutions at different levels are taking actions in this regard (Table V.2). 63 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Table V.2. Institutional Profile of Water Resources Management in Nicaragua Agency Relevance to the Management of the Lake Cocibolca Watershed Implementation of environmental policies and regulations, Ministry of Environment including the enforcement of wastewater discharge standards, the MARENA and Natural Resources management of protected areas including the wetlands, and the Environmental Impact Assessment process. Nicaraguan Institute of MAGFOR Support for a range of programs, extension services and education Agricultural Technology campaigns on sustainable agriculture, pasture management and soil Ministry of Agriculture, conservation practices; guidelines for the agrochemical application. INTA Livestock and Forestry Collection and analysis of meteorological, geological and other Nicaraguan Institute of INETER environmental data; and, jointly with MARENA, provision of zoning Territorial Studies guidelines to municipalities. Applied research on water resources, water quality monitoring and Center for Water CIRA-UNAN related limnologic (algae) research; calibration of the PC-Lake water Resources Research quality model for Lake Cocibolca recently began. Center for Environmental Applied research on water resources; host to the TWINLATIN program CIEMA Research and Studies that collected and systemized much of the data used in this study. Nicaraguan Water Supply ENACAL and Sanitary Sewage Provision of water and sanitation in most urban areas. Company Nicaraguan Emergency FISE Provision of water and sanitation in rural areas. Social Investment Fund Association of Coordination of local development programs for Nicaragua’s 68 AMUNIC Nicaraguan municipalities, including the coordination of local-level environmental Municipalities planning. Association of Nicaraguan Coordination of watershed protection actions at municipal level and AMUGRAN Municipalities of the organization of annual Cocibolca Forums. Great Lake Nicaraguan Institute of Preparation of tourism sector strategies, including tourism planning INTUR Tourism in the Lake Cocibolca watershed. Development, approval, and facilitation of the implementation of the Commission for the action plan and a zoning plan for the watershed, and coordination Sustainable Development of donor support and management of the corresponding financial The Lake of the Lake Cocibolca resources. The commission includes the Water and Sanitation Commission and San Juan River Institute (INAA), ENACAL, INTUR, MAGFOR, ANA, CIRA-UNAN, Watersheds (created by representatives of municipalities and other agencies. The Law 626 of 2007) Commission’s Secretariat has been created but does not have an operating budget. Agency created by the 2007 Water Law (Law 620) and responsible ANA National Water Authority for integrated water resources management and was not operational at the time of the completion of this study. 64 VI. Conclusions and Policy Implications It is possible to achieve the long-term vision of implement this vision in the watershed (Box VI.1). better livelihoods and sustainable use of natural This study has built upon these efforts, identified resources in the Lake Cocibolca watershed. The the most critical gaps in scientific understanding Government of Nicaragua has made important and investment, and helped place the series of efforts and achieved significant progress in raising investments identified by the SAP within a broader public awareness of the environmental problems of watershed-wide perspective. Future efforts to the watershed, seeking solutions and implementing reduce environmental and health risks in the programs to improve sanitation systems and watershed need to include a range of measures wastewater treatment, promote sustainable to tackle health and environmental risks from agricultural practices and support the development municipal wastewater discharge, industrial water of sustainable tourism. Prior to this study, a broad sources, agrochemicals, tilapia farming, as well group of stakeholders, including national- and as a series of investments and policies to promote local-level government institutions and civil society sustainable land use practices and reduce wetland organizations of the watershed, identified the degradation. strategic vision and a long series of investments to Box VI.1. Project Profiles Defined in the 2004 Strategic Action Program The SAP developed project profiles in the greater San Juan River watershed that would support the Procuenca Project’s broad “Eco-management vision, Tourism and Rural Development,� including: • Agroecological zoning to support integrated watershed and farm management • Implementation of zoning plans in the watershed’s urban areas • Financing of investments in wastewater treatment systems in selected municipalities • Strengthening of the participation of civil society organizations in the integrated watershed management process • Environmental education to improve the sustainability of the use of natural resources in the watershed • Water quality monitoring and strengthening of meteorological data provision • Integrated management of the Malacatoya and other prioritized sub-watersheds • Conservation of the biological corridor’s ecosystems, the coastal zone and other biodiversity hotspots • Management plans for the prioritized Nicaraguan and transboundary wildlife refuges • Payment for environmental services in several prioritized areas of the watershed • Support for sustainable fishing activities and agro- and ecotourism. 65 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) The need to identify win-win solutions with agriculture and alternative livelihood sources, such benefits for the lake but also for people who live in as sustainable tourism, (ii) strengthening wetland the watershed and/or whose livelihoods depend protection and integrating wetland management on the watershed’s natural resources. Public in broader-scale river basin management, (iii) resources are scarce; without greater certainty investing in wastewater treatment, water supply about the severity of the economic, ecological, and and hygiene, and (iv) strengthening the regulatory health impacts of environmental degradation in the framework for environmental management and the watershed, it is unclear what level of investment enforcement of key regulations (Figure V.1). The in mitigation measures is justified. The scientific strengthening of information provision, education, uncertainty about the impact of contamination environmental information, monitoring data, and on water quality, ecosystems and public health, the institutional framework for integrated water and on the resulting economic costs preclude resources management in the watershed are the even a rough estimate of the investment needed “enabling environment� to ensure successful in mitigation solely on the basis of the benefits to implementation of the strategic agenda. the lake. Given the current state of knowledge, the Within this broad range of policy measures and policy agenda for the watershed needs to advance investments to help shift to a more sustainable on two fronts: ascertaining the severity of the path, some measures are more urgent than others environmental degradation and its impacts, and and some are very costly, but low-cost solutions identifying win-win options or policy changes and and win-win measures that are good for the investments with significant local benefits apart environment, for people’s livelihoods, and for the from the benefits for the lake. Many such options lake’s ecology can also be found. The following exist: treating wastewater in areas where localized general and more specific technical conclusions bacteriological contamination is so high that it have emerged from this study and can inform the poses risks to health and limits recreation and setting of the investment and policy priorities: tourism; supporting sustainable land uses that raise • Making extensive and intensive agriculture agricultural productivity and protect local water more sustainable. Extensive cattle and crop sources while also reducing the sedimentation of farming systems have led to the degradation of wetlands and the San Juan River; reducing health the watershed’s forests and soils. The common and ecosystem risks from pesticide application in practice of burning pastures to control weeds intensive agriculture; and other options. The GoN is especially damaging in extensive pasture is supporting the identification of these win-win systems, especially in steeply sloped areas with options by providing the discussion forums and soils vulnerable to erosion. Switching to more mechanisms to facilitate the active engagement sustainable land uses, such as silvopastoral of local communities in the formulation of the systems that combine animal farming and tree action plan for the watershed, and of the municipal cultivation, requires an integrated approach to environmental and zoning plans. help overcome barriers to their adoption: providing Based on the findings of this study and the incentives to farmers to adopt such land uses, series of consultations held with state and non- strengthening agricultural extension services state actors in Nicaragua in the course of this and environmental education, supporting study’s implementation, the required actions fall improvements in infrastructure, strengthening into four broad areas: (i) supporting sustainable access to markets, and improving access to 66 credit to allow farmers to make the up-front with primary production and the resulting large- investments that may be required for switching scale multiplier effects. Just as the benefits to the to more sustainable farming systems. Other poor from ecotourism projects are not automatic, options for reducing the pressures on forests so are the benefits to the environment. The links and soils from extensive systems are a transition between the tourism sector and the environment to more intensive agriculture and an expansion can go in two directions—the ecological footprint of opportunities for off-farm employment. of tourism through its potential adverse effects, Intensive agriculture—rice, sugarcane and and the potential of nature-based tourism to cotton cultivation in the watershed—has its own stimulate the local economy, generate jobs set of problems: pollution of water and soils and earmark financing for the management with agrochemicals and the impacts on farm of protected areas. The government has an workers’ health. Better education by scaling up important role to play in providing the regulations the successful experiences with the provision and certification for ecotourism enterprises and of agricultural extension services, support for in monitoring compliance with environmental the adoption of integrated pest management standards. Local communities need to be active practices, controlling stocks of outdated participants in the development of regional and pesticides, and monitoring the actual application local ecotourism strategies, in order for these rates of the most polluting agrochemicals are projects to be successful and beneficial for important priorities in the watershed. This the local source of nutrient pollution. Tilapia study has identified erosion hotspots in the cultivation in the lake near Ometepe Island areas of extensive agriculture, and the hotspots has received much public attention and is the of contamination with agrochemicals in the subject of heated debate. This study did not watershed are known (but not monitored), thus conduct out an in-depth assessment of the facilitating the setting of priority areas to be environmental effects of tilapia production in the addressed most urgently. An expansion of off- lake, but it is clear that the environmental risks farm employment opportunities is another way of increasing tilapia production levels need to to promote a shift to a more sustainable pattern be regularly assessed both in terms of nutrient of land use in the watershed, although in the contamination and in terms of risks to native and short term the scope for this may be limited. endemic fish species. It is important to continue • In the long term, the development of the independent monitoring of possible impacts sustainable tourism has significant potential of tilapia production on water quality through to stimulate economic growth, provide the affluence of nutrients from tilapia as well as alternative livelihoods for the rural population its impacts on the native fish population, since and generate major benefits for the poor. tilapia can be an invasive species. The lake’s watershed is rich with cultural and • Weltand protection and the implementation of ecological attractions that can serve as the basis management plans will have multiple benefits. for tourism development. Experience in Latin Another source of pollution is the degradation America shows that development of the tourism of wetlands, which may be affected by the sector not only positively impacts economic encroachment of agriculture. According to the growth, but also has very high potential to benefit calculations in this study, Los Guatuzos and other the poor because of strong backward linkages wetlands could be playing a very important role in 67 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) the filtration of sediment and nutrient loads from approaches may to some extent help to reduce agricultural fields and point sources of pollution, the high costs of implementation and regulatory but technical studies are needed to ascertain enforcement and to enhance adaptive capacity. how much pollution they filter. The watershed’s Such approaches may include the use of remote wetlands undoubtedly provide other globally and sensing and satellite technologies to monitor locally important ecological and socioeconomic land use and water quantity, and the promotion of benefits such as fish hatcheries and habitats public access to environmental information and for endemic and native species of fish, reptiles of community-based environmental monitoring and birds. Devising strategies that place the initiatives. local communities in the driver’s seat as the • Putting a Monitoring Strategy in Place is stewards of conservation will help ensure that Urgent. The limited available evidence suggests management plans are effective. Sustainable that contamination from nutrients carried into the sources of financing for the implementation of a lake with sediment flows is not yet severe in the watershed-wide wetland management plan, well watershed as a whole, but action now may help integrated in the overall plan for the management to avoid potentially irreversible consequences of the lake’s watershed, may include innovative in the future. Although it is unclear how far the approaches such as sustainable tourism, lake is from reaching a critical threshold at which creation of environmental conservation funds the ecosystems would be severely or irreversibly for wetland protection, and payment for affected, the case is strong for urgent policy environmental services (PES) mechanisms with actions to begin shifting to a more sustainable local and international funding. future development path for this important • Much progress needs to take place in enhancing watershed. As a first step, putting in place a adaptive water governance in Nicaragua and strategy of systematic hydrometeorological and the Lake Cocibolca watershed; this includes water quality monitoring with clear institutional the strengthening of the institutional and arrangements and sources of financing is regulatory framework for water resources an urgent priority. Since the study has found management. Important steps in this regard have that most of the runoff, sediments and some taken place. At national level, an institutional nutrients originate from the Costa Rican part and regulatory framework has been worked out of the watershed, cooperation with Costa under the new Water Law, but implementation Rica at scientific and policy levels is essential. still needs to be carried out. At municipal level, Nicaraguan experts cite successful experiences local actors are actively engaged in the process of cooperation with scientific laboratories in of planning the watershed protection actions. Costa Rica and Colombia that could be scaled up Making the National Water Authority (ANA) and within the framework of the SAP implementation the Secretariat of the Cocibolca Watershed and joint monitoring efforts. This study has also Commission operational, and establishing clear identified the critical parameters that need coordination mechanisms among municipalities to be monitored: precipitation, water flows, in the watershed, are the crucially needed agrochemical runoff from agriculture, and the institutional bases for watershed protection. nutrient content of the watershed’s soils. Some Strengthening the required technical capacity of the monitoring, such as for precipitation and at local level together with the use of innovative stream flow, needs to occur continuously while 68 other parameters, such as soil quality, can be to markets, agricultural extension services, land established through discrete monitoring efforts. tenure security and adequate regulation of access Ensuring the financial sustainability and clear to water, will play a key role in determining the assignment of institutional responsibilities for a longer-term pattern of economic development, monitoring program of this nature is an essential agricultural production structure, agrochemical element for its successful implementation. use and land use in the watershed, as well as In the short term, financing of targeted the prospects for developing the region as the interventions and the selected priorities country’s prime tourist destination. Thus, many identified by the SAP and by this study will help solutions lie within the broader policy realm and the transition toward more sustainable use of the require inter-agency coordination and bringing watershed’s natural resources. In the long term, the environmental problems of the watershed into the broader economic policy and institutional the core development agenda, with a focus on change will ultimately determine the watershed’s sustainable growth, protection of the watershed’s development pattern. The broader economic globally important ecosystems, and improvement policies and institutional factors, such as access of livelihoods. 69 Annex A. Technical Description of the SWAT Modeling of the Lake Cocibolca Watershed This annex describes the hydrological modeling of divides the watershed into multiple sub-basins the Lake Cocibolca watershed, using the Soil and that act as outlets. This division can be based on Water Assessment Tool (SWAT) tool. It describes the configuration of tributaries in the river and the procedures followed in setting up the model, combined with the hand-selection of additional as well as the data sources used. In addition, it points (e.g., limnigraph stations). The sub-basins provides a brief description of the approach used are then further sub-divided into hydrological to assess the potential impacts of climate change response units (HRUs), which are assumed to be scenarios in the watershed. homogeneous with respect to their hydrological Modeling Approach features. HRUs are semi-automatically derived In order to quantify the water quality impacts of by SWAT based on soil type, land use/cover, point and non-point pollution sources in the Lake topographic characteristics and other user-defined Cocibolca watershed and to assess the possible criteria. The water balance for HRU is computed by effects of specific land use changes, the study SWAT on a daily time step. made use of the SWAT tool. This tool is a long- SWAT requires a geo-database, which contains the term hydrological and water quality simulation coefficients or parameters related to physical and model that operated on a daily time step and is chemical characteristics of the different available able to assess the impacts of alternative land soil types, land cover/plant growth, inorganic use management options on water, sediment and and organic fertilizers, pesticides, tillage, urban agrochemical yield. SWAT takes into account the land, and weather stations. These coefficients or following data: topography, soil type, land use and parameters are used in the several formulations climate. (e.g., Hargreaves equation, Soil Conservation SWAT is a generic, freely downloadable package, Service (SCS) Curve Number method, nitrogen and with good user documentation and graphic user phosphorus loading equations, Manning equation, interfaces for widely used geographic information etc.) performed by SWAT to achieve a successful system (GIS) software, e.g., ArcView, ArcGIS 9.x, simulation. etc. It includes a stochastic weather generation Data Sources module, and makes it possible to assess how The hydrological model for the Cocibolca watershed climate change might impact the basin hydrology. was mostly built using information from a geo- SWAT is subject to ongoing improvements and database developed under the EU-funded Twinning has been successfully applied in many developing European and Latin American River Basins for countries throughout the world. Research Enabling Sustainable Water Resources A distributed rainfall-runoff model such as SWAT Management (commonly known as the TWINLATIN makes it possible to route water, sediments and Project). In the case of Nicaragua, TWINLATIN contaminants from individual sub-basins through worked closely with the Centro de Investigación the entire watershed. In order to do so, SWAT y Estudios de Medio Ambiente (CIEMA) and the Instituto Nicaragüense de Estudios Territoriales 71 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) (INETER). model (DEM), land use/cover information, soil-type Table A.1 below provides a brief description of classification and climate data (daily rainfall and the input data used for the hydrological model of temperature). Data sets were obtained for areas the Lake Cocibolca watershed: digital elevation of Nicaragua and Costa Rica inside the watershed boundaries. Table A.1. SWAT Input Data Parameter Description Source Topography Digital elevation model (DEM), 90 meters, Original source: Hydrosheds (USGS/WWF), created from Shuttle Radar Topography shift-corrected and made available through Mission (SRTM) data the TWINLATIN Project Hydrography Digitized shapefile of the river network Shapefile prepared under the TWINLATIN based on 1:50,000 topographic maps Project, based on the 1:50.000 topographic maps from INETER and the Instituto Geográfico Nacional de Costa Rica (IGNCR) Land Use For Nicaragua, shapefile prepared Collected under the TWINLATIN Project from remote sensing imagery (Landsat from the Ministerio Agropecuario y Forestal images, 2000). Input from local experts (MAGFOR) and Ministerio del Ambiente y los was also taken into account to update Recursos Naturales (MARENA) land use. For Costa Rica, shapefiles were obtained from the Procuenca Project Soil Types FAO data set of soil type layers at a scale Original source: Zobler, L. 1999. Global 1:5M scale Soil Types, 1-Degree Grid (Zobler). Data set available online [http://www.daac.ornl. gov] from Oak Ridge National Laboratory Distributed Active Archive Center, Oak Ridge, Tennessee, USA Precipitation Daily time series of 62 stations for For Nicaragua, collected under TWINLATIN 1996–2006 Project from INETER For Costa Rica, collected from the Instituto Meteorológico Nacional de Costa Rica Discharges Daily time series of 2 limnigraph stations Collected under TWINLATIN Project from for 1996–2006 INETER Additional information on irrigation practices, and assessment of sedimentation rates. Data pesticides and fertilizer types and their application, on agricultural practices and the application of crop management practices, and location and a pesticides and fertilizers were provided by experts technical description of water reservoirs, lakes and from MAGFOR, CIEMA, MARENA and other agencies wetlands have been incorporated to develop such during the stakeholder workshops conducted as calculations as water quality processes, modeling part of the study. scenarios for irrigation system improvement, 72 Land Use and Slope Profile as Modeled by SWAT presented in Tables A.2 and A.3. The area under Land use is a key input into SWAT. The land use each slope class in each sub-basin is presented in areas and per sub-basin as entered into SWAT are Table A.4. Table A.2. Land Use Areas per Class in Nicaragua’s and Costa Rica’s Sub-basins (%) Other sub-basins Tepeguanazapa in Nicaragua Malacatoya Tecolostote Ochomogo Land Use Areas per Class Camastro Ojocuapa Mayales Tipitapa Dorado Oyate Tule Water 0 0 1 0 0 0 0 0 0 0 0 0 Flooded land/wetlands 0 0 0 0 0 0 1 0 0 0 0 0 Maize/beans 1 13 1 0 12 0 1 0 3 0 0 0 Sorghum/annual crops 0 0 2 0 0 0 0 0 0 0 29 0 Sugarcane 0 10 0 0 3 0 3 0 0 0 0 0 Orchard 0 0 0 0 0 0 2 0 0 0 0 0 Rice 0 0 3 0 0 0 5 0 2 3 35 0 Forest-deciduous 7 0 1 0 0 3 5 7 0 3 0 9 Forest-mixed 0 1 1 0 0 0 1 0 1 0 0 0 Forest-evergreen 0 0 0 0 0 0 0 0 0 0 0 0 Forest plantation 0 0 0 0 0 0 0 0 0 0 1 0 Range 0 0 8 0 3 1 1 0 0 0 0 0 Permanent crops/shade coffee 0 17 0 0 0 0 1 0 0 0 0 0 Range-grasses-trees 55 0 13 18 5 28 18 31 17 50 2 55 Range-brush 17 44 56 48 58 59 36 46 45 20 21 17 Managed pastures 20 16 15 33 20 9 26 16 31 24 11 19 Soil without vegetation 0 0 0 0 0 0 0 0 0 0 0 0 73 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Hydrological Model Setup Table A.3. Land Use Areas per Class in Costa Rica’s Sub-basins (%) After the required and additional data were collected, the process of delineation of basins, Other sub-basins sub-basins, stream network and outlets began. in Costa Rica SWAT automatically generated two maps from the Land Use Areas per Class digital elevation model: the flow direction map and Zapote Sapoá the flow accumulation map. In addition, a raster Niño mask, which represents the delineation of the Lake Cocibolca watershed, was created to limit the area Water 1 1 0 0 where sub-basins and stream network would be Flooded land/wetlands 12 1 0 8 located. Maize/beans 1 1 0 0 The sub-basins were delineated using standard Sorghum/annual crops 2 1 1 1 routings included in the SWAT software. In very flat Sugarcane 0 0 0 0 areas near the lakeshore, some minor adjustments Orchard 0 0 0 0 were made to overcome errors in the digital Rice 0 0 0 0 elevation model. Similarly, a few corrections were Forest-deciduous 24 15 13 44 made in the land use/land cover database to Forest-mixed 17 36 11 11 correct obvious errors. Then, a minimum drainage Forest-evergreen 3 0 0 2 area of 640 km2 was selected to divide the Lake Cocibolca watershed in 1,240 sub-basins. Up to Forest plantation 0 0 0 0 four classes of slope were derived from the DEM, Range 0 0 0 0 with the last class being greater or equal to 10. Permanent crops/shade 4 3 0 0 coffee The land use/cover map and the soil-type map within each sub-basin boundary were then used Range-grasses-trees 3 0 0 0 to generate the HRUs. In this case, the following Range-brush 2 0 8 1 thresholds were used for the generation of the Managed pastures 32 41 67 33 HRUs: 20 for soil type and 10 for land use/cover. Soil without vegetation 0 1 0 0 For the 1,240 sub-basins, a total of 15,920 HRUs were derived for the Lake Cocibolca watershed. and southern parts of the watershed. In addition, Next, the weather data was incorporated. For the time period for each station varies significantly. the hydrological modeling of the Lake Cocibolca Even though the time period of measured watershed, daily temperature and rainfall were precipitation data for the Nicaragua stations was used as parameters of weather data. Consequently, available from 1970s to the present, the Costa Rica the Hargreaves evapotranspiration equation was precipitation data were available only from 1996 to utilized to calculate the potential evaporation. The 2006. As a result, a common period of SWAT model daily rainfall data were collected from 62 stations: simulation was constrained to those 11 years. 52 stations located in Nicaragua and 10 stations SWAT allows one precipitation station per sub- located in Costa Rica. As shown in Figure A.1, these basin. There are 1,240 sub-basins in the Lake stations were not evenly distributed for the entire Cocibolca watershed. Since the spatial distribution watershed, especially the eastern, south eastern of the rainfall is not even, the ArcSWAT interface 74 Table A.4. Slope Profile by Sub-basin as Percentage of Total Areas Area per Slope Class (%) Max slope Sub-Basin < 3% 3–12% > 12% (%) Costa Rica Niño 43 40 17 44 Sapoá 58 35 7 43 Zapote 71 20 9 50 Nicaragua Malacotoya 37 42 21 50 Tipitapa 100 0 0 26 Tecolostote 27 44 29 46 Mayales 40 41 19 47 Ochomogo 75 23 2 24 Oyate/Dolores 59 30 11 40 Tepeguanazapa 67 30 3 27 Camastro 64 34 4 22 Tule 59 37 4 30 El Dorado 84 15 1 37 Ojocuapa 52 37 11 36 automatically assigns the closest precipitation raster maps were produced. Once the daily rainfall station to each sub-basin based on the distance from point data were interpolated and gridded, the sub- the centroid of the sub-basin to the precipitation basin map was overlaid to create a pseudo weather stations. Due to the poor distribution of rainfall station for each sub-basin by aggregating all the stations within the watershed, the daily available cells within the sub-basin from the interpolated precipitation records were interpolated using the surface. The pseudo weather station used by SWAT, inverse distance weighting (IDW) technique. This containing daily rainfall from 1996 to 2006 at the is a standard interpolation algorithm available in centroid of each sub-basin, is shown in Figure A.2. ArcGIS. As a result, a 1 km x 1 km grid for each Since only six weather stations with daily temperature day along the 11 years was created and 4,018 data for long-term records were available,31 a 75 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure A.1. Actual Rainfall Stations model called WPXM3020 was used to generate With regard to the information on irrigation weather coefficients. The weather coefficients practices, pesticides and fertilizers (types), crop were used by the weather generator sub-model management practices, these data were set up in within SWAT to generate non-precipitation weather- the edit SWAT input process at the watershed level. related parameters from these six weather stations After that, SWAT starts with the simulation process for different places inside the Lake Cocibolca of evapotranspiration, rainfall, soil moisture watershed. Figure A.2 shows the location of the retention, rainfall, sediment loading, surface weather generator stations. runoff, water yield, and nitrogen and phosphorous concentrations for the baseline. 31 The 10 weather stations of Costa Rica also contained temperature data, but the data became available towards the end of the study, so could not be used in the modeling. 76 Figure A.2. Pseudo Weather Stations for Precipitation Used in SWAT 77 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure A.3. Location of Weather Generator Stations 78 Figure A.4 below shows the simulated average monthly precipitation per sub-basin for the analyzed period. Figure A.4: Simulated Average Monthly Precipitation per Sub-basin (in Millimeters per Month) 79 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Definition of Climate Change Scenarios Outputs of 16 Global Circulation Models (GCMs) For the analysis of the potential impacts of climate and 6 marker scenarios (A1FI, A1T, A1B, A2, B2 change on the water balance and severity of and B1) from the Special Report on Emissions soil erosion and pollution problems in the Lake Scenarios (SRES) were used to obtain change Cocibolca watershed, climate change signals signals for mean annual temperature and mean (absolute and percentage changes) with regard to annual precipitation for a future 30-year window the baseline period of 1981–1999 were generated centered on the year 2050. Figures A.5 and A.6 by applying MAGICC/SCENGEN 5.3v2 tool to two below show the mean annual changes relative to cells: the Pacific cell, 87º30’–85º W |10º–12º30’N, the baseline scenario (1981–1999) from MAGICC/ and the Atlantic cell, 85º–82º30’ W |10º–12º30’N. SCENGEN for the Pacific and Atlantic cells. Figure A.5. Precipitation and Temperature Changes for the Pacific Cell 80 Figure A.6. Precipitation and Temperature Changes for the Atlantic Cell 108. Table A.5 shows the 25th, 50th and 75th precipitation for the basin in 1981–1999 and percentile climate signals for the Pacific Cell, which 1996–2006 are very close. covers most of the Lake Cocibolca watershed. Modeling of Climate Change Scenarios Four climate change scenarios were selected for SWAT includes an option that allows the application in SWAT, based on an analysis of the applyication of change factors directly to the input total variability in change factors contained in the time series of precipitation and temperature, and previous table. Due to the small variation in change as such facilitates the analysis of climate change signals for temperature, and in order to facilitate impacts. This rather simple methodology was used the comparison of the effects of different change to evaluate the hydrological and sedimentation factors for precipitation, a single mean change impacts of future climate scenarios, and consisted factor for temperature has been used for all SWAT of adjusting the time series with the following impact scenarios. The selected scenarios for the equations: simulations are presented in Table A.6. It should be noted that annual average temperature and 81 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Table A.5. Changes Relative to the Baseline for the Pacific Cell Δ T (C°) Δ P (%) SRE scenario 25 th 50 th 75 th 25 th 50th 75th A1FI, A1T, A1B, A2, B2 and B1 1.4 1.7 1.9 -15.1 -6.5 2.3 A1B 1.6 1.8 2.0 -17.8 -8.7 -0.4 A2 1.5 1.7 1.8 -17.5 -7.9 1.0 B2 1.3 1.5 1.6 -11.4 -3.9 2.8 A1B, A2 and B2 1.5 1.6 1.8 -17.4 -6.8 2.4 Table A.6. Selected Climate Change Scenarios Scenario Δ T (C°) Δ P (%) Scenario 1 +1.64 C o 0 Scenario 2 +1.64 C o -17.8 Scenario 3 +1.64 C o -3.9 Scenario 4 +1.64 C o +2.8 Where Pday is the precipitation that falls in a the Edit SWAT Sub-basin parameters dialog. Once particular location on a given day, and changepcp is these changes were introduced, SWAT was able to the percentage of estimated change for the rainfall. simulate the sediment loading and surface runoff, considering climate change until 2050. SWAT includes an option that makes it possible to apply changes in mean temperature and precipitation in degrees (°C) and percentages (%) directly to the input time series. This option is found Where Tmax is the daily maximum temperature, Tmin in the sub-basin data of the Edit SWAT Input menu. is the minimum daily temperature and changetmp Once these changes are introduced, SWAT is able is the estimated change in temperature. In this to project the sediment loading, water quality and particular case, the change terms are annual. surface runoff to 2050 with regard to the baseline Although it is possible to estimate the changes (1996–2006). Carbon dioxide (CO2) projected from month to month so seasonal variation can to 2050 is also implemented in the hydrological be taken into account, this was not done given modeling. the mismatch in the spatial resolution of MAGICC/ Hydrological Modeling Evaluation SCENGEN and the spatial resolution of the pseudo Simple evaluation procedures were run to evaluate weather stations. the hydrological performance of the model. Two sub- The abovementioned changes in temperature and basins inside the Lake Cocibolca watershed were precipitation, in addition to the corresponding selected for the evaluation: the Mayales sub-basin changes in carbon dioxide (CO2), were added in and the Oyate/Dolores sub-basin. Their location is 82 Figure A.7. Location of Mayales and Oyate/Dolores Sub-basins shown in Figure A.7. Both sub-basins are located to evaluate the performance of the model were in the northeastern part of the watershed. The first the coefficient of determination (R2), the model sub-basin has an extension of 1,200 km2 and all efficiency or Nash-Sutcliffe (NS), and the percentage the surface and lateral runoff and groundwater flow bias (PBIAS). The measures were applied to into Lake Cocibolca. The second sub-basin extends continuous monthly time series of stream flows over an area of about 870 km2 and its surface with more than 12 values during the overall period runoff and groundwater also flow into the lake. The from January 1996 to December 2005. monthly simulated flows were compared with the In accordance with Moriasi et al. (2007), the monthly observed discharges from two limnigraph following criteria were used to interpret the statistical stations located at the sub-basin outlets. measures: (a) R2 values greater than 0.5 are To determine how well the observed discharges considered acceptable and indicate a good degree from the two limnigraph stations are reproduced of linear association between the simulated and by the model, a visual comparison and statistical observed values; (b) NS values greater than 0.75 measures were used. The statistical criteria used are considered “very good,� values between 0.65 83 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) and 0.75 are considered “good,� values between From the results shown in Table A.7 and a closer 0.50 and 0.65 are considered satisfactory and look at Figure A.8, it can be seen that the model values below 0.50 are considered “unsatisfactory;� tends to represent relatively well the intra- and and (c) absolute values of PBIAS of less than +/- 10 inter-annual variability of stream flow values for are considered “very good,� values between +/- 10 October 1996–October 1998 in the Mayales sub- and +/- 15 are considered “good,�,values between basin. Poorer results are obtained for the other +/- 15 and +/- 25 are considered “satisfactory� two periods: July 1999–September 2000 and and those greater than +/- 25 are considered July 2001–September 2003. Large discrepancies “unsatisfactory.� are observed in some individual years. Possible Graphical results of the average monthly stream explanations for the observed discrepancies are: flows generated by SWAT and the observed stream inadequate representation of spatial precipitation flow data in both locations are presented in Figures by the model, limited number of measurements A.8 and A.9. The figures also show the monthly at high flows affecting the derivation of the rating average precipitation from the nearest weather curves, no changes in the rating curves after peak station to the limnigraph station in each sub-basin. flow events that affect the cross-section geometry Figure A.8. Monthly Flow and Precipitation in Mayales Sub-basin 84 Figure A.9. Monthly Flow and Precipitation in Oyate/Dolores Sub-basin Table A.7. Statistical Indicators of Model Performance in Two Sub-basins Sub-Basin/Period R2 EF PBIAS Mayales Sub-Basin - Oct’96-Oct’98 (25) 0.68 0.67 17.1 - Jul’99-Sep’00 (15) 0.20 0.06 54.2 - Jul’01- Sept’03 (23) 0.36 -1.43 109.4 Oyate/Dolores Sub-Basin - Dec’96-Dec’98 (25) 0.68 0.33 -67.9 - Oct’03-Oct’04 (13) 0.83 -0.64 -156.2 Note: Number in parenthesis indicates the size of the sample. 85 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) of the river, among others. lack of data, rating curves not properly calibrated, On the other hand, from the results in Table A.7 and etc. A more detailed look at Figure A.8 shows Figure A.9, it can be seen that the model tends to that the limnigraph station at Oyate/Dolores is overestimate stream flows. However, a high degree not recording the increased flow during the storm of collinearity is observed between simulated events that took place in February 1998, March and observed data. Possible explanations for the 2000, February 2003 and March 2005. differences between the simulated and observed Although a detailed calibration and validation flows are: the presence of upstream hydraulic process could improve the results of the model, in structures (for example, dam/reservoir) or this study such a process could not be performed diversions upstream from the limnigraph station, due to the lack of a sufficiently long time series of which may not be represented by SWAT due to observed flows, at sufficient locations in space. 86 Annex B. Estimation of Nutrient Load from Tilapia Farming in Lake Cocibolca On Lake Cocibolca, near Ometepe Island, there 27.3 and 3.7 tons/year respectively. Obviously, an is a commercial project dedicated to harvesting important part is eliminated with the harvesting of tilapia in floating cages. Several stakeholders in adult tilapia. Nicaraguan perceive a strong negative impact In another study on nutrient loads and the efficiency associated with this activity on the quality of the of tilapia farming in floating cages in the Philippines Lake Cocibolca ecosystem. For this reason, and in (Vista, Norris, Lupi and Bernsten 2006), the authors the context of the overall quantification of nutrient applied a factor for nutrient loss of 76.56 percent loads to the lake, we considered it relevant to and 85 percent for N and P, respectively, using data quantify the nutrient loads of this particular activity. from Beveridge and Phillips (1993) and Phillips et Tilapia are aquaculture is fed a high-protein diet, al. (1994). When these factors are applied to the around 28 to 30 percent of the total food weight study case of Lake Cocibolca, we obtain a net (Al Hafedh 1999). Nitrogen (N) accounts for 4.5 nutrient load of 20.9 Tm of N and 3.1 tons of P, for to 5.8 percent of this diet. The phosphorous (P) a hypothetical annual yield of 3,000 tons of tilapia requirement is lower than 0.9 percent in the diet (this figure is based on current projections from the of Oreochromis niloticus, and usually ranges from company, as mentioned in the OSPESCA report).32 0.5 to 0.8 percent (Watanabe, Takeuchi, Murakami According to estimates by Boyd and Green (1998), and Ogino 1980) (Boyd C. 2005). tilapia produce 26.5 percent of dry matter; of this According to OSPESCA (2006), tilapia raised in this dry matter 8.5 percent is N and 3.0 percent is P. fish farm on Lake Cocibolca exhibit a conversion Using this information, it is possible to calculate factor of 1.5, meaning that during the feeding the proportion of N and P nutrients introduced in phase 1.5 kg of fish food is required to produce the ecosystem that are removed through tilapia a 1 kg increment in tilapia biomass. This value is harvesting (Boyd 2005): An annual yield of 350 within the ranges of the average values found in tons would remove 7.9 and 2.8 tons of N and specialized literature (e.g., Boyd C. 2005) and it P, respectively, through the tilapia biomass. In corresponds to the use of a high-yield food source. this case, the annual net load of nutrients in the If we assume an annual production of 350 tons ecosystem would be 19.4 and 0.9 tons of N and of tilapia (OSPESCA 2006), with a feeding factor P, respectively. In the case of an annual tilapia of 1.5, this activity is releasing about 525 tons of production of 3,000 tons, these values would food per year into the aquatic system. Assuming increase to 166.4 tons of N and 7.7 tons of P. this food has an estimated 5.2 percent of N and In another study, and using a different method 0.7 percent of P, the net load of nutrients N and (SUMAFISH 2003), the author estimated a net P released into the aquatic ecosystem would be nutrient load in the ecosystem of 112 kg N and 32 It is worthwhile to mention that, more recently, article 97 of the new General Law of National Waters bans the introduction and farming of invasive exotic species in Lake Cocibolca. 87 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Table B.1. Estimate of the Net Load of Nutrients Released into the Lake Cocibolca Ecosystem as a Result of Tilapia Farming in Floating Cages Total Load of Nutrients Net Load of Nutrients Tilapia Amount of Discharged into the Discharged into the Method Used for Production Food Used Ecosystem Ecosystem Estimation N P N P Note: All the values in the table are in tons/year - - 39.2 11.6 SUMAFISH 2003 Vista et al. 2006; 350 525 20.9 3.1 Phillips et al. 1994 27.3 3.7 19.4 0.9 Boyd 2005 - - 336.0 99.0 SUMAFISH 2003 Vista et al. 2006; 3,000 4,500 179.2 26.8 Phillips et al. 1994 234.0 31.5 166.4 7.7 Boyd 2005 33 Kg of P for each ton of red tilapia harvested in released by point sources (urban and industrial floating cages in Thailand. If this method is used waste water) and non-point sources (agriculture, to provide an alternative estimate of the potential cattle ranching) in the watershed. nutrient load of total N and P in Lake Cocibolca, we It is important to mention that in this study we are obtain a net load of 39.2 tons of N and 11.6 tons of only assessing the effect of tilapia farming as a P, for a production of 350 tons of tilapia reported in source of nutrients discharged into the lake; we 2005, and a net load of 336.0 tons of N and 99.0 are not making any reference to other potential tons of P in the case of an annual production of impacts in the ecosystem (at the local and overall 3,000 tons of tilapia. level) resulting from this activity or to other aspects Results of this analysis are summarized in Table associated with this activity, nor do we provide a B.1. This table provides an initial estimate, under detailed analysis of the socioeconomic effects in different production scenarios, of the magnitude of the population. In this context, it is important to N and P loads discharged into Lake Cocibolca as a remember that Article 97 of the Water Law (Law result of tilapia farming in floating cages. Although 620) bans the introduction and harvesting of different values were obtained depending of the invasive exotic species in Lake Cocibolca. method used, these values in general are quite consistent in magnitude, and can easily be used to estimate the relative importance of this activity as a source of N and P by comparing it with other loads 88 Annex C. Additional Figures and Tables Table C.1. Ranking of Sub-basins by Sediment and Nutrient Load Rates In Terms of Total Loads (tons) Rank Sediment Nitrogen Phosphorus 1 = highest Nino Other sub-basins in NI Other sub-basins in NI 2 Other sub-basins in CR Other sub-basins in CR Other sub-basins in CR 3 Zapote Tipitapa Nino 4 Other sub-basins in NI Nino Tule 5 Sapoa Tepeguanazapa Mayales 6 Tule Zapote Tepeguanazapa 7 Tepeguanazapa Malacatoya Zapote 8 Mayales Tule Tecolostote 9 Oyate Dorado Sapoa 10 Tecolostote Mayales Oyate 11 Ojocuapa Oyate Malacatoya 12 Ochomogo Ochomogo Ochomogo 13 Malacatoya Sapoa Ojocuapa 14 Camastro Ojocuapa Dorado 15 Tipitapa Tecolostote Camastro 16 = lowest Dorado Camastro Tipitapa In Terms of Load Rates (ton/ha) Rank Sediment Nitrogen Phosphorus 1 = highest Nino Dorado Nino 2 Zapote Tipitapa Ochomogo 3 Other sub-basins in CR Ochomogo Other sub-basins in CR 4 Sapoa Nino Tule 5 Tule Other sub-basins in CR Zapote 6 Mayales Other sub-basins in NI Sapoa 7 Ochomogo Zapote Dorado 8 Tepeguanazapa Sapoa Tecolostote 9 Oyate Tule Other sub-basins in NI 10 Other sub-basins in NI Tepeguanazapa Mayales 11 Tecolostote Ojocuapa Tepeguanazapa 12 Ojocuapa Camastro Camastro 13 Camastro Tecolostote Ojocuapa 14 Malacatoya Mayales Oyate 15 Dorado Oyate Tipitapa 16 = lowest Tipitapa Malacatoya Malacatoya Note: Rankings of sub-basins by sediment, phosphorus and nitrogen contribution levels from land use are indicative and are based on the results of SWAT model. Two rankings are presented: from highest to lowest total load contribution, and from highest to lowest total loads per hectare. It should be noted that not all sediment loads or nutrient loads end up in the lake. For the estimated amounts of sediments and nutrients reaching the lake refer to Table C.2. Smaller sub-basins have been aggregated into “Other sub-basins in CR� and “Other sub-basins in NI� categories. Sub- basins located in the Costa Rican part of the watershed are shown in bold. Source: Own estimates based on SWAT simulations. 89 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Table C.2: Sediment and Nutrient Loads from Non-point Sources Flowing into Lake Cocibolca Total Total Total Total Total Total Sediments Sediments Sub-basin Nitrogen Phosphorus Nitrogen Phosphorus (tons/ (tons/y) (tons/y) (kg/ha/y) (kg/ha/y) (‘000 tons/y) ha/y) Nicaragua Camastro 51–128 129–227 9–16 1.2–3.1 3.1–5.5 0.2–0.4 Dorado 9–14 168–234 12–18 0.4–0.6 6.6–9.2 0.5–0.7 Malacatoya 25–174 79–415 6–30 0.2–1.2 0.6–2.9 0.0–0.2 Mayales 174–1,007 215–611 21–71 1.6–9.5 2–5.8 0.2–0.7 Ochomogo 43–223 135–239 12–23 1.7–8.9 5.4–9.6 0.5–0.9 Ojocuapa 43–224 104–326 6–28 0.7–3.7 1.7–5.5 0.1–0.5 Other 1/ 503–1,588 952–1,508 68–135 2.3–7.2 4.3–6.8 0.3–0.6 Oyate 221–715 286–428 16–29 2.2–7.3 2.9–4.3 0.2–0.3 Tecolostote 7–444 95–409 11–49 0.1–7.3 1.6–6.7 0.2–0.8 Tepeguanazapa 267–1,015 418–696 28–56 2.2–8.2 3.4–5.6 0.2–0.5 Tipitapa 3–21 112–237 3–13 0.1–0.4 2.2–4.6 0.1–0.2 Tule 338–1,057 409–761 33–67 4.3–13.4 5.2–9.7 0.4–0.8 Total Nicaragua 1,683-6,611 3,102–6,090 225–535 1.6–6.4 3.0–5.9 0.2–0.5 Costa Rica Niño 3,806–7,613 673–1,023 44–90 49–98 8.7–13.2 0.6–1.2 Other 1/ 2,276–5,784 866–1,408 56–111 18.4–46.8 7.0–11.4 0.4–0.9 Sapoá 360–1,237 195–351 13–32 9.5–32.7 5.2–9.3 0.4–0.9 Zapote 2,194–4,061 451–678 25–54 34–62.9 7.0–10.5 0.4–0.8 Total Costa Rica 8,636–18,694 2,185–3,461 139–287 28.4–61.5 7.2–11.4 0.5–0.9 Note: 1/ The category “other� includes all minor sub-watersheds in Nicaragua and in Costa Rica, respectively, which are not already listed in this table. Source: Own estimates based on SWAT simulations. 90 Figure C.1. Indicative Ranking of Sub-watersheds by Sediment and Nutrient Load Rates Sediment Ranking by Sub-Basin Source: Own estimates based on SWAT simulations. 91 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Total N Ranking by Sub-Basin Source: Own estimates based on SWAT simulations. 92 Phosphorus Ranking by Sub-Basin Source: Own estimates based on SWAT simulations. 93 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure C.2. Protected Areas in Nicaragua Source: MARENA 2009. 94 Figure C.3. Overlay of Erosion Hotspots, Protected Areas and PES Areas in Costa Rica Source: Own estimates based on SWAT simulations. 95 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) Figure C.4. Mean Annual Sediment Loads Carried by Streams in the Lake Cocibolca Watershed Note: This figure visually represents sediment carried by the streams in terms of varying stream widths. Source: Own estimates based on SWAT simulations. 96 References Arnold, J.G., R. Srinivasan, R.S. Muttiah, and J.R. Williams. GSMFC (Gulf States Marine Fisheries Commission) 2003. Fact 1998. “Large area hydrologic modeling and assessment, Sheet for Oreochromis aureus. November 21, 2003. http:// Part I: Model development.� Journal of the Amercian Water nis.gsmfc.org/nis_factsheet.php?toc_id=194. Accessed: Resources Association, 34(1), pp. 73–89. October 19, 2009. Boyd, C.E., and B. Green. 1998. “Dry matter, ash, and Hruska, A. 1990. “Government Pesticide Policy in Nicaragua elemental composition of pond-cultured tilapia (Oreochromis 1985–1989.� Global Pesticide Monitor, 1(2), May 1990. aureus and O. niloticus).� Journal of the World Aquaculture Society, 29, pp. 125–128. JICA. 1993. “Estudio sobre el proyecto de abastecimiento de agua en Managua.� Managua: JICA. CIRA/UNAN. 2009. “Recursos Hídricos de Nicaragua una Visión Estratégica.� Presentación en cuarta reunión de JICA. 2005. “El estudio para el desarrollo para el programa de agua de la red interamericana de academias de abastecimiento de agua potable a mediano y largo plazo de ciencia. la ciudad de Managua. Informe Final. VI: Informe Principal.� Managua: JICA. Costa-Pierce, Barry. 2003. Rapid evolution of an established feral tilapia (Oreochromis spp.): the need to incorporate Koster, Sarian; A. Kamarainen; E. Jeppesen; E. van Nes; E. invasion science into regulatory structures. Biological Invasions Peeters; N. Masseo; L. Sass; J. Hauxwell; N. Hansel-Welch; T. 5: 71–84. Cited from Massachusetts Institute of Technology Lauridsen; M. Søndergaard; R. Bachmann; G. Lacerot and M. 2006. Tilapia Fact Sheet. June 28, 2006. http://massbay.mit. Scheffer. 2009. “Climate-related differences in the dominance edu/seafood/tilapia.pdf. Accessed: 20 October 2009. of submerged macrophytes in shallow lakes.� Global Change Biology, 15(10), pp. 2503–2517. Do Monte, Marecos, H., Angelakis, A. and Asano, T. (1996). Necessity and basis for establishment of European guidelines Marín, X., M. Ogier, C. Pérez, and M.A. Martínez. 2007. for reclaimed wastewater in the Mediterranean region. Wat. “Elementos metodológicos para la implementación de Sci. Tech., 33 (10–11), 303–316. pagos por servicios ambientales hídricos a nivel municipal en Centroamerica.� Serie Técnica No. 2/2006. Tegucigalpa: Di Bernardo, L .1995. “Algas e suas Influências na Qualidade PASOLAC. das Aguas e nas Tecnologias de Tratamiento.� Montenegro-Guillén, Salvador. 2005. “Lake Cocibolca/ ENACAL. 2009. “Nicaragua, Cocibolca, agua, vida, calidad de Nicaragua: Experience and Lessons Learned Brief.� Managing vida.� Presentación del Primer Foro de Agua y Saneamiento. Lakes and Their Basin for Sustainable Use: A Report for Lake Basin Managers and Stakeholders. International Lake FAO. 2005–2009. Cultured Aquatic Species Information Environment Committee Foundation: Kasatsu, Japan. Programme. Oreochromis niloticus. Cultured Aquatic Species Information Programme. Text by Rakocy, J. E. In: FAO Fisheries Moriasi, D.N., J.G. Arnold, M.W. Van Liew, R.L. Bingner, R.D. and Aquaculture Department [online]. Rome. Updated May Harmel, and T.L. Veith. 2007. “Model evaluation guidelines 19, 2006. http://www.fao.org/fishery/culturedspecies/ for systematic quantification of accuracy in watershed Oreochromis_niloticus/en. Accessed: October 20, 2009. simulations.� American Society of Agricultural and Biological Engineers, 50 (3), pp. 885–900. FUNDAR-MARENA (2003). Plan de Manejo del Refugio de Vida Silvestre Los Guatuzos. Período 2003–2008. Proyecto Murray, D., C. Wesseling, and M. Keifer. 2002. “Surveillance of Gestión Ambiental Amigos de la Tierra España – Cooperación Pesticide-Relatd Illness in the Developing World,� International Española, Managua, Nicaragua. Journal of Occupancy Environment Health. Vol 8, pp. 243– 248. García Galán, R., and S. Hernández. 2004. “Evolución trófica del Lago Cocibolca: Indicadores de desarrollo sostenible de Obando Espinoza, M. 2007. “Evolución de la experiencia de los la gestión empresarial. Serie 1: Sector lácteo, planificación, PSA hídricos en Nicaragua: El caso de la micro cuenca Paso de pesca, bebidas, frutas y vegetales y cerámica de barro.� los Caballos, Municipio de San Pedro del Norte, Chinandega.� Managua: MARENA, Embajada Real de los Países Bajos, UNI, Serie Técnica No. 2/2007. Tegucigalpa: PASOLAC. CPML, SINIA. 97 Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) OSPESCA, 2006. Caracterización del Cuadrante Suroeste Stehr A., P. Debels, F. Romero, and H. Alcalaga. 2008. del Lago Cocibolca con Énfasis en la Pesca y la Acuicultura. “Hydrological modelling with SWAT under conditions of limited Octubre 2005–Marzo 2006. Proyecto “Plan Regional de Pesca data availability: Evaluation of results from a Chilean case y Acuicultura Continental� – PREPAC (OSPESCA/TAIWAN/ study.� Journal des Sciences Hydrologiques, 53(3), pp. 588– OIRSA). Organización del Sector Pesquero y Acuícola del Istmo 600 Centroamericano, Sistema de la Integración Centroamericana SICA. SUMAFISH. (2003). “Strategies for sustainable management of fisheries resources in the Pasak Jolasid Reservoir, Thailand, Pagiola, S. 2003. “Farmer responses to land degradation.� through ecological and socioeconomic assessment.� PLACE: In: K.D. Wiebe, ed., Land Quality, Agricultural Productivity, and ASEAN Regional Center for Biodiversity and the European Food Security: Biophysical Processes and Economic Choices at Commission. Local, Regional, and Global Levels. Cheltenham: Edward Elgar Publishing. TWINLATIN Twinning European and Latin American River Basins for Research Enabling Sustainable Water Resources Pagiola, S. 2008. “Payments for environmental services in Management. Final Reports [Report]. 2009. Costa Rica.� Ecological Economics, 65(4), pp. 712–724. Vista, A., P. Norris, and F.A. Lupi. 2006. “Nutrient loading and Pagiola, S., A. Rios, and A. Arcenas. 2008. “Can the poor efficiency of tilapia cage culture in Taal Lake, Philippines.� The participate in payments for environmental services? Lessons Philippine Agricultural Scientist, 89(1), pp. 48–57. from the Silvopastoral Project in Nicaragua.� Environment and Development Economics, 13(3), pp. 299–325. Wesseling, Corriols; and M. Bravo. 2005. “Acute Pesticide Poisoning and Pesticide Registration in Central America.� Pagiola, S., E. Ramírez, J. Gobbi, C. de Haan, M. Ibrahim, E. Toxicol Appl Pharmacol. 207, pp. 697–705. Review. Murgueitio, and J.P. Ruíz. 2007. “Paying for the environmental services of silvopastoral practices in Nicaragua.� Ecological Winchell, M., R. Srinivasan, M. Di Luzio, and J.G. Arnold. 2009. Economics, 64, pp. 374–385. “Arc SWAT interface for SWAT2005 – User’s guide.� Temple: Blackland Research Center, Texas Agricultural Experiment Phillips, G., R. Jackson, C. Bennett, and A. Chilvers. 1994. “The Station and Grassland, Soil and Water Research Laboratory, importance of sediment phosphorus release in the restoration USDA Agricultural Research Service. of very shallow lakes (The Norfolk Broads, England) and implications for biomanipulation.� Hydrobiologia, 275/276, World Bank. 2003. Nicaragua Land Policy and Administration: pp. 445–456. Toward a More Secure Property Rights Regime. Report No. 26683-NI. Washington, D.C. Salvatierra Suárez, Thelma and Yader Caballero Arbizú (2006). “Calidad del agua del Lago de Nicaragua (Cocibolca) en el World Bank. 2005. Living Standards Measurement Survey for área de influencia municipal del sur de la Isla de Ometepe. Nicaragua. Washington, D.C. Un aporte de información científico-técnica para el desarrollo de una estrategia de gestión integral para la cuenca del Gran Lago de Nicaragua.� Report prepared for CIRA/UNAN. Schuol, J., K.C. Abbaspour, H. Yang, and R. Srinivasan. 2008. “Modeling blue and green water availability in Africa.� Water Resource Research, 44: w07046. 98 Publications from the LCSEN Occasional Paper Series Environment & Water Resources n Empowering Women in Irrigation Management: The Sierra in Peru (2013) n Environmental Health in Nicaragua: Addressing Key Environmental Challenges (Originally Published in 2010, Republished in 2013) (Available in Spanish and English) n Expanding Financing for Biodiversity Conservation: Experiences from Latin America and the Caribbean (Available in English (2012) and Spanish (2013)) n Overcoming Institutional and Governance Challenges in Environmental Management. Case Studies from Latin America and the Caribbean Region (2013) n Policy and Investment Priorities to Reduce Environmental Degradation of the Lake Nicaragua Watershed (Cocibolca) (Originally Published in 2010, Republished in 2013) (Available in Spanish and English) n Uncertain Future, Robust Decisions; The Case of Climate Change Adaptation in Campeche, Mexico (2013) To find copies of these publications, please visit our website: www.worldbank.org/lac 99 Latin America & Caribbean Region Environment & Water Resources Occasional Paper Series