Opportunities and limits to ecosystem services governance in developing countries and indigenous territories: The case of water supply in Southern Chile

Limited evidence exists on the a priori feasibility of implementing ecosystem services (ES) governance arrangements, to simultaneously ensure nature conservation, human wellbeing, and equity. Using a multiscale institutional approach, we explore rules, property rights, and stakeholders' values and the extent to which such institutions may entail or prevent governance innovations around ES. We focus on water supply and a Southern municipality of Chile as an apt illustration. Results show that the concept of ES and ES mechanisms are exempt from formal norms (e.g., national laws). The formal institutional setting is generally weak with respect to nature conservation and a fragmented view prevails, where the management of land, water, forests and protected areas is separately handled by a myriad of agencies. The presence of highly concentrated water rights may impair benefits appropriability by ES beneficiaries, as long as any potential buyer can acquire water rights. Furthermore, incompatible values regarding nature create tensions across different stakeholders, particularly between hydroelectricity companies and indigenous communities. In this scenario of multiple rationalities, moving towards ES-based environmental governance seems problematic. In light of the evidence, it is clear that the ES approach does not necessarily fit in every local reality and seems to face obstacles, such as achieving equity and justice, particularly in contexts wherein local and indigenous knowledge systems have not been adequately considered by states within their institutional arrangements.